Business Activity: Wages & Wage Rate, The Efficiency of Labour and The Concept of Unemployment by @swaylee

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Greetings Entrepreneurs and business moguls, I am Rasheed and today's business lecture would be about 3 "not too distant" topics as seen in the title, they are wages, unemployment and the efficiency of labour. These topics are no rocket science as they are things we experience everyday in our places of work whether we might know or not. I would be sure to talk at length about these topics but I would be brief in order to avoid beating around the bush. Let's get started. Shall we?

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Wages

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In business, the Reward for labour is wages. Wages is simply the payment given to labour or human resources for the services they render. It is the compensation usually monetary which is given by the employer to people working under them (employees) for the time, effort or resources they put into the company, business environment or production process. It could be paid hourly, daily, weekly while salary is usually monthly or even annually. The wages talked about in this context encompasses both wages and salaries.

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Types of Wages

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Everyone has their classification of types of labour but as for me, there are two main types of wages which includes

✓ Nominal Wage
This can also be called money wage. It is the total amount of money paid to labour for it's resources during a particular period of time.

✓ Real Wage
It is like an adjusted wage usually determined with the rate of inflation and the rise in prices of goods. It's wages paid in terms of amount of goods and services that the money can buy.

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Wage Rate

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This is simply defined as the rate at which labour is paid for the services it renders in the production process. It is usually determined by the amount of services rendered/ amount of productivity put in or the amount of time/ hours put in the production process. The wage rate of any labour put in is usually agreed and discussed between the employer and the employee before the services are rendered.

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Types of Wage Rate

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✓ Time Rate System
This are wages paid on the basis of the time put into the production process. For example, in America most employees are paid hourly so if you happen to earn $10 for each hour of work you put in then you are utilizing a time rate system.

✓ Piece Rate System
These are wages paid on the basis of the units of goods produced or amount of products or services rendered. For example, you are working at a factor where you make toys and you are to be $5 for every unit of the toy made. If you make 10 toys you would be paid $50 then that's the piece rate system.

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Unemployment & What might cause it?

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Unemployment is a situation where a person who is willing and able to work and searching for employment isn't able to find one. Someone of working age and has the physical capability to work might not actually be interested in working and hence he or she is actually not unemployed this is because they are not willing to work or seeking for work.

Unemployment may be caused by various factors like over population as there would be too many people available for employment and not as much employment opportunities to match the population.

Failure on the part of the government is another cause of employment as the government is to provide employment opportunities through building of social infrastructure and industries to take some people of the unemployment line.

Illiteracy is another key contributor to unemployment as the minimum criteria for most jobs is a learned person.

State of the economy is another contributing factor because when an economy is in recession, employers would be trying to maximize the little they earn so would employ few people.

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Types of Unemployment

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source

Structural Unemployment
This kind of unemployment is caused by a change in the demand pattern of the consumers. For instance, Volkswagen cars were in high demand so the company employed more people to match the demand but people start buying more of Ford motors and the demand for Volkswagen reduced greatly and they had to sack their excess staff.

Seasonal Unemployment
This kind of unemployment is caused when the products follow seasonal changes. For instance, a company which produces Christmas toys would have to halt production after the Christmas period hence their works would stay unemployed for the time being.

Frictional Unemployment
This is simply unemployment caused by changes in a companies technique of production. For instance a mass producing toy company were to switch from manual production methods to technological methods, a lot of staff would be laid off and become unemployed.

Residual Unemployment
This kind of unemployment is caused by physical or mental disability. For instance, a worker who works at the convenience store becomes bed ridden, he would have to lose his job because he is unfit to continue for the time being.

Casual Unemployment
This is caused by temporary jobs or jobs that have a short life span. For instance, a brick layer who works until the house is built then once that time reaches, they would have to stay unemployed until they find another person who needs their services.

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The Efficiency of Labour

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This is the ability of labour to increase its output and productivity without necessarily increasing the number of workers employed. This was supposed to be in my previous labour market post but I wrote to my fill and decided to postpone it. For example, in a toy company 50 men produce 200 toys a day and the manager decides to increase their salary, this could boost their morale and make them increase productivity hence those 50 workers would now make 250 toys a day. From this example we can see that the same number of labourers increased their productivity.

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Factors affecting the Efficiency of Labour

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Job Security
When one is working and they aren't sure if they have a Tomorrow in that job, it would reduce their morale and productivity when working but if you are assured that you won't just get sacked out of the blues and that your job is intact, you would definitely working harder.

Attractive Wages
Just like the example I gave earlier, ones salary increases their productivity. If one was working as an art curator on Steemit and they got paid 25 steem, they wouldn't work as hard as a curator who gets paid 90 steem for doing the same work so an attractive wage would boost their morale and make them more productive.

Personal skill and specialization
If I were to employ complete newbies to work at a manufacturing company, they wouldn't be as productive as someone who has gotten experience and specialization when it comes to manufacturing. So ones personal skill, experience and specialization can have a positive impact in production hence increasing productivity.

The workers state of health
When some workers are ill or are suffering from one disease or the other, they wouldn't be as productive as they were when they were fully healthy so the state of health has an impact on the workers productivity.

Effective Management
The capabilities and experience of the co-ordinating factor (the managers) also play a vital role in labour efficiency. A capable and well versed manager would bring the best out of the workers hence increasing productivity than in a situation where the manager isn't well versed.

Some other factors include weather conditions and the efficiency of other factors of production like capital and land etc.

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Conclusion

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I hope you all enjoyed this special edition lecture as I fit 3 different topics in one post as a bonus for the weekend. Anyone reading this must atleast learn something new and thank you for having me. See you all next time. I appreciate my readers for the support.

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Post Name:	Business Activity: Wages & Wage Rate, The Efficiency of Labour and The Concept of Unemployment by @swaylee
Owner's name :	@swaylee
Business Address	Barnawa, Kaduna, Nigeria
About us	Link

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