Question

Average Weekly Earnings (2011)
• Mining, oil, and gas $1,737
• Utilities $1,644
• Professional, scientific, technical services $1,213
• Public administration $1,114
• Construction $1,091
• Finance and insurance $1,064
• Manufacturing $982
• Logging and forestry $974
• Education and related services $956
• Transportation and warehousing $919
• Health and social services $809
• Arts, entertainment, and recreation $551
• Retail trade $513
• Accommodation/food/beverage services $357

1. Examine the list of industries and pay rates above. Provide two possible reasons WHY each
industry has the relative pay level that it does.
Compensating differential
• Seasonal employment
• Cost of living
• Poor working conditions
• Poor industry reputation
2. Based on the concept of “compensating differentials,” develop a list of job/organizational
characteristics that would make you willing to work for less money. Then develop a list of
job/organizational characteristics that would cause you to want more money to accept a
given job.

Answer 1

Compensating difference is the difference between money paid for jobs in different industries or at different loactions. It is basically difference may arise due to risk involved in job or due to working environment, desrirability of job, location, amenities and utilities provided etc. The difference also arise due to paying more money for undesired jobs so that people view money as a motivation to work. One of the factor is minimum wages of different countries, states are different and even gender gap is also one of the reasons of compensating difference in money payout. It is additional money paid to a person to make the undesirable job a pleasant job.

Answer -1

As per the given list of industries and their pay rate,each industry has the relative pay level that it does because of following reasons -

The pay-out in mining, oil and gas is high due to risk of safety involved and location is unattractive. These industries have high demand of products but are dangerous in terms of safety (ex landslide of mining areas, bursting and leaking of oil and gas). So, these industries need to pay high pay packages to their employees.

Accommodation/food/beverage services requires paying less pay beacuse these industries runs in high scale during seasons. These industries provides seasonal employment and deploys daily wage workers in high scale.

Professional, scientific and technical industries basically pay to persons who are highly skilled and expertise. Therefore, pay rate of skilled professional are high. The knowldege of professionals cannot be replaced by hiring semi or unskilled employees, therefore these industries pay high rate to take services from professionals and technical people.

Manufacturing Industries employs different kinds of people involving skilled , unskilled as well as semi skilled people. So the payout in these industries comes out to be average. Also, the plant of manufacturing industries are generally in most of the cases are situated in outskirts of the cities.Some of the manufacturing plants have very poor working culture.For this they have to pay high amount to hire people.

Education and health -The major payout in these basically pays to teachers, professors, principal and other staff. The location of these industries are good, generally located within main areas of cities. These industries also provides various aminities and utilities to its employee. The working environment in these industries are also good.So these industries are not required to pay a very high money to employ people for their jobs.

Construction - Construction sites involves risk of injuiry, risk of safety. Accidents are often in construction sites. Also, people are expected to work long hours.

Arts, entertainment and recreation - The reputation of these industries as well as reputation of people working in these industries is quite good. Most of the people dream to get work in these industries. Some people work in these industries out of passion and hobbies.

Finance and insurance -This sectors includes professionals, well qualified, educated, accountants. So there salaries are higher than as in other sectors. It involves high skill employees and employee turnover is high in this sector. The salary in these industries is less in comparison to mining sector beacuse of location, safety in job.

Transportation and warehousing - In these sector salary is high because of high labour turnover ratio and such organisation are in cluster. The work environment in these sector are not so good.

Public administration - These industries requires responsible and expertise people who can perform their work with intregity. These industries also requires job in unattractive work locations, outer areas of cities, and thus requires high pay. Thes industries are highly reputated.

Logging and forestry - This sector is labour oriented and invloves work in forest and unfavourable geographical area. It also involves safety issues for ex - at logging and forestry any wild animal can attack. so it involves safety risks.

Health and Social Service - These industries do not require very high pay because of high aminities and utilities provided to the employees.

Utilities - Salary in utility sector is high because technical manpower is high in compare to daily wage labour. Location are un attractive. Therefore, people demand high pays to work in these industries.

Answer 2

List of jobs/organizational charateristics that would make willing to work for less money -

1	Good Exposure	The work profile is desriable and is according to expertise.
2	Cost of Living is low	One of the important factors is working at a location where cost of living is low. This would increase the savings and expenses would be easily managed with even lesser money.
3	Attractive Location	The geographical location of the work is attractive and well connected with road and rails.
4	Highly Reputed Company	If the company is highly reputed, even if it paying less money the people would like to join the job.
5	Amenities	The area with high amenities is preferred over areas with lower amenities
6	Job is not risky	Where the job is not risky, anyone is ready to work for less money
7	Future growth	If a job provides future growth in long - run but paying less money would still be attractive to work.

List of jobs/organizational charateristics that would require more money for work/Job

1	Undesirable Job	The job is undesirable so more money would be required to accept job proposals
2	Cost of Living is high	One of the important factors is working at a location where cost of living is high. It would be difficult to save and bear high expenses, so higher money is required
3	Location is not attractive	The geographical location of the work is not attractive and well connectivity is poor.
4	Less Reputed Company	If the company is having poor reputation, more money will only be the factor to accept job proposal
5	Poor utilities	The area with poor utiities will be an issue and would be preferred if more money is being paid.
6	Job is risky	Where the job is risky, no one will be interested in these jobs.
7	Poor work environment	Work environment matters alot. It work environment is poor, it makes the job acceptation less attractive
8	Risk of injury, risk of being unsafe	Where the work location or profile involves risk of injury or risk of being unsafe (ex- earthquake prone areas, terrorist areas, mining jobs etc.) would required higher money compensation to accept the job.