What I’m going to say to your parents "Your son/daughter is failing. They cannot graduate unless they pass all their classes” - Reasons why failing: Participation? Completes work? Test scores?" How to check grades How they can bring up their grade (no, it isn't too late).“ Whether or not they signed up to fix grade

Test on Monday Federal debt and deficit (how to calculate, approximate numbers where they stand) Progressive taxation (how to calculate) Tax deductions & tax credits (more calculation) Major items on our government’s budget Major differences between national vs state & local spending Discretionary vs. Mandatory spending Capital gains tax Vocabulary List #4

Productivity and the Demand for Labor Mr. Way, Economics, 3/15/ Discuss wage differences among jobs and professions, using the laws of demand and supply and the concept of productivity.

Labor Markets As with anything bought and sold, there is a market for labor. “Producers” of labor are people who are paid to do work. “Consumers” of labor are people who hire others to do work. The price of labor is found by seeing where supply and demand for labor meet.

What determines demand for labor? Employers face a fairly simple equation when deciding whether to hire people: “Will they generate as much as or more money than they are paid?” The value of the services you provide is called your “productivity.” If your productivity is greater than your compensation, an employer will hire you.

Factors that affect productivity Personal characteristics (Hard worker? Fast learner? Critical thinker? Skills (vocational school, education) Capital resources Social value of whatever you produce (fastest snot-ornament maker in the world isn’t very “productive”)

Compensation for Labor “Compensation” is another word for “pay” Compensation comes in many forms: –Wage (amount paid by the hour) –Salary (set yearly income) –Benefits (added “perks” like health coverage) –Commission (bonus pay per unit produced) –Stock options (own a part of company, share in profits)

Income Differentials The difference between income levels for different people/groups is called an income differential (or wage differential) There are two main reasons why some individuals are paid more than others: –They are more “productive,” i.e. they produce something of much higher value –There is a very limited supply of people who can produce what they do.

Income Differentials Buying 8 hours of labor from a guy flippin’ burgers would cost about $60, because the value of burgers is low and anybody could do it. Buying 8 hours of legal advice could easily cost more than $8000, because a business or wealthy person could save tens of thousands or more by winning or avoiding a lawsuit, and few people have the legal knowledge to compete. i.e. A lawyer is much more “productive” and “scarce” than the guy in the McDonalds kitchen.

Conclusion You are paid based on how much you are worth to employers. If you want to be paid a lot, you have to produce something people will pay a lot of money for. Additionally, you need to produce something somewhat unique.

Writing prompts: Answer all of the following in paragraph form: 1.Why are some people paid more than others for the same amount of time working? 2.Do you believe it is fair for some professions to make more money than others? 3.Do you think people should have the option to be paid in cash instead of “benefits?”