Workers

The primary reason people work is to earn an income, which is a wage or salary exchanged for their labour. This income allows them to purchase goods and services to satisfy their needs and wants. However, money is not the only factor. People make career choices based on a combination of wage and non-wage factors. Non-wage factors are the non-monetary benefits or drawbacks of a job. These can include working hours, holiday entitlement, job security, promotion prospects, the quality of the working environment, and the level of job satisfaction. Individuals will weigh up all these aspects, a concept known as considering the 'net advantages' of a particular occupation.

The wage rate is the price of labour. In a free market, it is determined by the interaction of the demand for and supply of labour. The demand for labour comes from firms wanting to produce goods and services. It is a 'derived demand' because it depends on the demand for the final product the worker helps to create. The supply of labour comes from individuals willing and able to work. It is influenced by factors like the number of qualified people, the non-wage benefits of the job, and the wages available in alternative jobs. The point where the demand for labour equals the supply of labour determines the equilibrium wage rate and the level of employment.

Wage differentials exist between different occupations and individuals for several reasons. 1. Skill, Education and Training: Jobs that require a high level of skill and long periods of training (e.g., doctor, pilot) have a limited supply of qualified workers, which drives up their wages compared to unskilled jobs with a large supply of labour. 2. Experience: Workers with more experience are often more productive and can command higher wages. 3. Compensating Differentials: Some jobs are risky, dirty, or have unsociable hours (e.g., oil rig worker, night shift security). They may offer higher wages to compensate workers for these poor non-wage factors. 4. Industry Type: Workers in profitable, growing industries often earn more than those in declining industries. 5. Talent: In some fields like sports and entertainment, unique, innate talent is scarce, leading to exceptionally high earnings for 'superstars'.

A trade union is an organisation of workers that joins together to protect its members' rights and improve their pay and working conditions. The primary method unions use is collective bargaining, where union representatives negotiate with employers on behalf of all the members in a workplace. This gives workers more bargaining power than they would have as individuals. If negotiations fail, a union may organise industrial action to put pressure on the employer. Forms of industrial action include: a strike (refusing to work), a work-to-rule (doing the bare minimum required by the contract), or an overtime ban (refusing to work more than normal hours). There are several types of union, including craft unions (for a specific skill), industrial unions (for an entire industry), general unions (for workers across many industries), and white-collar unions (for professional or office-based staff).

A worker's patterns of spending, saving, and borrowing are heavily influenced by their age, income, and life stage. A younger, often unskilled or junior, worker typically has a relatively low income. They are likely to spend a high proportion of this income on necessities and social activities, leaving little for saving. They may also be a net borrower, taking on loans for education, a car, or a deposit on a home. In contrast, an older, skilled worker is likely to be at the peak of their earning potential with a much higher disposable income. They may have already paid off major debts like a mortgage. Their spending may include more luxury goods, but they are also likely to save a much larger proportion of their income, often to build a fund for retirement. Their accumulated wealth is also much higher.