Question

answer in essay form 500 words

How are wages determined in the U.S.? What are the most significant trends in wages over the past five years? Your answer should address the following:

1. Demand for labor
2. Minimum Wage legislation
3. Role of Unions
4. Outsourcing of jobs

Answer 1

In the United States, there's no way that wages are determined. By general, wages are dictated by supply and demand, but a wide range of factors can affect them, including the cost of living in a given region, the existence of a union and the existing minimum wage. Pay rates also vary according to workforce gender , race, educational level and skill level.

The fundamental rule of supply and demand governs US wages. Individual employers, however, may set wages depending on how much money a specific job can bring. Added to this is the fact this applicants also receive a wage based on specific credentials of their own. Another complicating factor in any pay dispute is the existence of unions in some industries. While the strength of the unions in the U.S. has diminished in recent years, in some places unions still exist, and this has an impact on wages. The federal minimum wage can also create something called a market balance which helps stabilize pay.

a. Generally speaking, wages are dictated by supply and demand, and if you live in a region with more employment available than workers, pay is likely to increase as the area's employers compete for the same small talent pool. Conversely, pay will go down in an area with an overabundance of workers as fewer posts become available. Supply and demand also correlate directly with the type of job somebody does. In recent years, the workforce shortage has moved to areas such as home health care and hospitality, as more graduates are graduating from college in other fields. This means that employers have to pay more to fill those vacancies, driving wages up naturally.

b. Any time economists analyze how wages are calculated in labor markets, the debate enters with minimum wages. The government mandates, with minimum wage, that no employer can pay less than a set hourly figure. The federal minimum wage as of publication is $7.25 but 29 states and D.C. Have your own minimum wages, exceeding that amount. The term, market equilibrium, refers to the point where wages are equal to the current rate employers want to pay and workers are willing to accept. When the government raises the minimum wage, it upsets that balance, because the minimum rate employers have to pay exceeds what they are paying at the moment. This also results in a reduction in jobs, which in turn causes at least a temporary rise in unemployment.

c. In situations where workers are protected by unions, owing to something called collective bargaining, wages can be increased. When someone acts on behalf of a larger group, an employer is pressured to listen so as to avoid a strike-like situation. Studies have shown that workers represented by trade unions continue to gain more and, on average, have better benefits than equally skilled workers not represented by trade unions.

There are also arguments on whether unions harm or benefit workers as analysts examine how wages are decided on the labor markets. Higher-skilled workers are more likely to be represented by a union which in some areas could create a wage gap. When a organization is unionized, employees who choose not to join the union will also create a salary difference, which may make some employees feel forced to join in order to receive the same pay as their peers.

d. Job outsourcing helps U.S. businesses make the global economy more competitive. It helps them to sell overseas branches to international markets. They keep the labor costs low by hiring on lower living standards in emerging markets. That lowers the prices of the products that they ship back to the USA.

Outsourcing's principal negative effect is that it increases U.S. unemployment. The 14.3 million outsourced jobs are more than double America's 5.9 million unemployed. If all those workers returned, recruiting the 4.3 million who work part-time but would prefer full-time employment would still be enough.