Grade 10 Unit 2 Economy System in Today's World 4

Unit 2  Economic System in Today's World

Labor Markets, Price Mechanism and Wage Rates in Thai Society

Learner's objectives

1. Identify the factors that decides the wage and salary rates

2. Determine how this factors affect production, prices and wage

3. Discuss wage rates in Thailand

Open Ended

What is market?

Open Ended

What is labor market?

What is a labor market?

Labor market –is the market for labor , where employers provide the demand and employees the supply.

•In return for their services or labor, the employers pay wages to the laborers or suppliers of labor.

Open Ended

What are the factors that decides the

rates of wages and income?

1. The Role of Productivity

• The value of output that a worker produces per unit of labor input.

​https://www.youtube.com/watch?v=WXhyXx-1UuU

Factors that affect Productivity:

1. The emergence of new technology

2. Improved techniques

3. Advanced capital equipment

4. Better managerial and organizational skills

5. Improved skills of workforce

​2. The Role of Human Capital

Human capital – is the measure of economic value of a worker’s skills and knowledge, which influences their productive capacity and income.

• An improvement in human capital directly affects the economic growth of a nation by increasing the average productivity of labor.

Open Ended

What is/are the contribution of  human

capital to labor market?

Functions of Labor Unions:

1. Acting as intermediaries between workers and employers.

2. Ensuring every worker receives an official contract that states the terms and conditions of employment.

3. Ensuring regular wages and safe work environment for workers.

4. Negotiating wages with employers and ensuring that workers do not receive a compensation that is lower than the minimum wage.

Labor Union-refers to an association of workers that aims to take care of their interests related to work and the workspace.

3. The Role of Labor Unions

Open Ended

What advantage does a

worker get from joining labor unions?

Demographics- is the study of a population based on age, race and sex.

• The defining factors to consider in demographics include births, deaths and migrations

• Deaths and migrations–decrease the population of the country.

• Births and immigrations increase the population of the country.

*In case of population increase, there is a prospective increase in quantity of labor available. But it doesn’t mean that it is an increase in REAL Quantity Labor because a part of that population could be made up of people below or above working age.

4. Role of Demographics

Open Ended

20 persons arrived in Chiang Mai. 10 are children, 2 are

65 years old and above. How many person can be possibly hired to work?

​5. The Role of Government Policies

Government policies have a huge impact on fixing wage and income rates

Example: When the government of an economy sets a minimum wage, no firm in the economy can a pay a wage that is below that wage.

§Suppose the equilibrium wage rate of workers is 20 baht per hour and the minimum wage set by the government is 40 baht per hour, then the number of workers who would want  the job will be greater than the number of workers demanded by the firms.

• ​An increase in minimum wage reduces employment and creates involuntary unemployment.

• A decrease in minimum wage will result in the demand for workers will increase and more workers will be employed.

Open Ended

What if the minimum wage is set below the equilibrium wage rate,

like 10 baht per hour? What do you think will the company owner do?

​Wage Rates in Thailand

​Wage Rates in Thailand

​Wage Rates in Thailand

Any question?

What can you say about this lesson?