ECONOMICS Johnson Hsu. Economics of work and leisure 1. Nature of work and leisure and trends in employment and earnings 2. Market Structures and competitive.

ECONOMICSECONOMICS

Johnson HsuJohnson Hsu

Economics of work and Economics of work and leisureleisure

1.1.Nature of work and leisure and Nature of work and leisure and trends in employment and earningstrends in employment and earnings

2.2. Market Structures and competitive Market Structures and competitive behavior in leisure marketsbehavior in leisure markets

3.3. Labour demand, supply and wage Labour demand, supply and wage determinationdetermination

4.4. Market failure and the role of the Market failure and the role of the government and union in the labour government and union in the labour marketmarket

Definition- Definition- EconomicsEconomics

is the is the social science that studies economic activity to gain an understanding of the processes that govern the production, distribution and consumption of goods and services in an exchange economy

Microeconomics examines the behavior of basic examines the behavior of basic

elements in the economy, elements in the economy, including individual agents and including individual agents and markets, their interactions, and the markets, their interactions, and the outcomes of interactions. outcomes of interactions. Individual agents may include, for Individual agents may include, for example, households, firms, example, households, firms, buyers, and sellers.buyers, and sellers.

Macroeconomics analyzes the entire economy

(meaning aggregated production, consumption, savings, and investment) and issues affecting it, including unemployment of resources (labor, capital, and land), inflation, economic growth, and the public policies that address these issues (monetary, fiscal, and other policies).

Other broad distinctions within Other broad distinctions within economics include those between economics include those between positive economics, describing "what is," and normative economics, advocating "what ought to be"; between economic theory and applied economics; between rational and behavioral economics;

Macroeconomics

and between and between mainstream economics (more "orthodox" and dealing with the "rationality-individualism-equilibrium nexus") and heterodox economics (more "radical" and dealing with the "institutions-history-social structure nexus").

Macroeconomics

Work and leisure are closely concerned.

What is main reasons people work for?

Ans: To earn money

The Structure of earnings

are defined as wages, plus are defined as wages, plus overtime pay, bonuses and overtime pay, bonuses and commission. commission.

Earnings change as a result of Earnings change as a result of a change in wage rates, a change in wage rates, bonuses or commission paid. bonuses or commission paid.

The Structure of earnings

On an annual basis, earnings On an annual basis, earnings have risen steadily in recent have risen steadily in recent years. years.

Rises, levels and composition of Rises, levels and composition of earnings vary between industries earnings vary between industries and occupations. and occupations.

Earnings in the hotel and Earnings in the hotel and restaurant industry were lowest. restaurant industry were lowest.

Why December to April show the largest increase in earnings?

Ans: these are the months in which bonus payments are highest.

Employment Employment The structure of employment has The structure of employment has

changed in recent years and changed in recent years and continues to change.continues to change.

The labour force includes both the employed and the unemployed.

The labour force would be larger if those who were economically inactive were a part of it.

From 1978 to 2005, Why the manufacturing decline nearly 4 million jobs?

Ans: Because there was a significant rise in financing and business services.

Economically inactive Economically inactive - working age people - working age people who are neither in employment, who are neither in employment,

nor unemployed, and so are not nor unemployed, and so are not part of the labour force. part of the labour force.

In the UK, while the economic In the UK, while the economic activity of women has risen, that activity of women has risen, that of men has fallen. of men has fallen.

Labour force participLabour force participation rateation rate

The proportion of working age The proportion of working age people who are economically people who are economically activeactive

Why a worker may no longer be employed in the same job?

Ans: This was resulted from Job Separation. A worker may voluntarily leave a job to enter higher education or to be a homemaker.

What is the interesting feature of job separations in the UK?

Ans: One is that younger workers experien

ce more job separation than older ones.

Another is that women’s job separations tend to be voluntary, whereas men’s job separation are more likely to be involuntary.

Discouraged Discouraged workers workers

or the 'work shy', are people who or the 'work shy', are people who have given up seeking have given up seeking employment since they believe employment since they believe they will not be able to find work. they will not be able to find work.

The government is attempting to The government is attempting to increase the employment rate, increase the employment rate, setting itself the target of 80% of setting itself the target of 80% of working age people in work. working age people in work.

Recent trends in employment

Workers in the public sector differ from those in the private sector in a number of ways.

Part-time employment has also grown in absolute terms.

The number of self-employed workers in increasing. (Small Office Home Office)

Employment rate Employment rate the proportion of working age the proportion of working age

people who are in work. people who are in work.

In 2005, the UK had an In 2005, the UK had an employment rate of 74.7% employment rate of 74.7% (males 79.1%, females 70%), (males 79.1%, females 70%), compared with an EU compared with an EU employment rate of 64% (males employment rate of 64% (males 71.5%, females 56.6%). 71.5%, females 56.6%).

Part-time workersPart-time workers People working less than 30 People working less than 30

hours a week.hours a week.

Why part-time employment is increasing during 1996 to 2006?

Ans: Because the unavailability of a full-time job has become less important in the last decade.

TeleworkingTeleworking Working using a telephone and a Working using a telephone and a

computer at home, in an internet computer at home, in an internet café, or a train or planecafé, or a train or plane

Temporary workTemporary work Casual work, seasonal work, Casual work, seasonal work,

working for employment working for employment agencies, fixed-period contract agencies, fixed-period contract workwork

Why people undertake temporary work?

Ans: because they are unable to find a permanent job.

HomeworkingHomeworking Working either at home or in Working either at home or in

different places away from the different places away from the central office, production or central office, production or distribution facilities, using the distribution facilities, using the home as a basehome as a base

Advantages for homeworkers: More control over when they work, w

hich helps with family commitment and may reduce stress.

Employers benefit from lower office costs.

Access to a greater pool of workers Lower rates of sickness and highly pro

ductiity.

Disadvantages of homeworker Workers may feel more isolated

and may receive less training.

Recent trends in earnings

The earnings workers receive are influenced by a number of factors:

educational qualifications Skills Which area they work in The industry they work in Their age Gender Occupation

Age

Age population in EU Italy Germany Ireland Slovakie

What is the advantage of the change job less frequently from older workers

Ans: Reduce firms’ turnover costs, inclu

ding recruitment and initial training costs.

What are the reasons women are participating in the labour force more?Ans: Increase opportunity for women Increase pay changing social attitude Increased expectations of higher living st

andare

Occupation Occupation segregationsegregation

The domination of an The domination of an occupation by one genderoccupation by one gender

Why the pattern of employment of women and men is different?

Ans:The difference in the pattern of empl

oyment is sometimes referred to as occupational segregation.

Why, on average, women are less well paid than men?

Ans:In order to find jobs that allows them to sp

end time with their children, one third of all corporate managers have to switch to lower-skill job.

Almost half give up their managerial responsibilities and become assistant etc., (occupational downgrading)

Primary sectorPrimary sector The first stage of production, The first stage of production,

including industries such as including industries such as agriculture, fishing, forestry agriculture, fishing, forestry and mining, involved I the and mining, involved I the extraction and collection of raw extraction and collection of raw materials.materials.

Secondary sectorSecondary sector The second stage of The second stage of

production, which involves the production, which involves the processing of raw materials processing of raw materials into semi-finished ad finished into semi-finished ad finished goods. It includes goods. It includes manufacturing constructionmanufacturing construction

Tertiary sectorTertiary sector The third stage of production, The third stage of production,

which covers industries which covers industries production services including production services including education, financial services, education, financial services, health care and tourismhealth care and tourism

What are the reasons of the relatively poor performance of UK against USA and some EU countries?

Ans: Lower level of capital per worker Educational shortcomings Insufficient innovation Inefficient transport system

Wage wedge The gap between what employers The gap between what employers

pay for labour and what receive in pay for labour and what receive in disposable incomedisposable income

OutsourcingOutsourcing Subcontracting part of the Subcontracting part of the

production process to another production process to another firm firm

OffshoringOffshoring Transferring part of the Transferring part of the

process to another country. process to another country. The production may be The production may be outsourced or may be outsourced or may be undertaken by the firm but in undertaken by the firm but in another countryanother country

LeisureLeisure

People’s time can be divided People’s time can be divided into three main categoriesinto three main categories work/educationwork/education Maintenance timeMaintenance time leisureleisure

Forms of leisureForms of leisure Home-based activities: such as reaHome-based activities: such as rea

ding, accessing Facebook and gardding, accessing Facebook and gardeningening

Out-of-home activities: such as eatiOut-of-home activities: such as eating out, visiting a club and going to ng out, visiting a club and going to the cinema.the cinema.

The supply of The supply of leisureleisure

The private sectorThe private sector The public sectorThe public sector The voluntary sectorThe voluntary sector

Factors influencing demand for a particular leisure activity The price of the activity The price of complementary goods and

services The price substitutes Tastes Age composition Gender composition Advertising Major events Exchange rate

Changes in the leisure market

A rise in the proportion of home-based leisure activities.

A rise in gambling. A rise in expenditure on leisure

activities An increase in the influence of the

USA

The growth of tourism An increase in disposable income A reduction in working hours A fall in the real cost of travel Early retirement People living longer A reduction in time spent on domestic

tasks Improved transport Increased advertising Increased awareness of the benefits

The effects of tourism

Income and employment The balance of payment Culture Enviornment

Tourism income Tourism income multipliermultiplier

The extent to which a change in The extent to which a change in income from tourism causes income from tourism causes GDP to changeGDP to change

MonopolyMonopoly A single sellerA single seller

Market Market concentration concentration

ratioratio The percentage share of the The percentage share of the

market of a given number of market of a given number of firmsfirms

Employment and Employment and unemployment rates by age unemployment rates by age group, 1992~2012group, 1992~2012

How much do you How much do you earn each year?earn each year?

Unemployment Rate Unemployment Rate By GenderBy Gender

The gender pay gapThe gender pay gap

Comparison of Comparison of minimum wages across minimum wages across Asia and the United Asia and the United StatesStates**

EURO AREA:UNIT EURO AREA:UNIT LABOUR COSTSLABOUR COSTS

Economies of ScaleEconomies of Scale

Diseconomies of Diseconomies of scale scale

Relationship between Relationship between the SRAC and the the SRAC and the LRAC curvesLRAC curves