Ch by accinent


									          Ch.8 Wages, Rent, Profit, and Interest (pgs 206-41)
 - includes salaries and other forms of payment for labour

Wage Determinants
         1. labour productivity – most important
         2. education > ^ human capital – income earning potential
         3. experience > seniority rights – privileges
         4. job conditions > garbage collectors
         5. regional disparities > Nfld. vs. Ont.
         6. market power > labour unions – wages, benefits, working conditions
         7. discrimination > job and segregation

  - effect wages, working hours, workplace standards and employment > W ^ but Empl.

Types of Unions
   1. industrial – all workers in an industry
   2. craft – particular occupation (eg. plumbers)

Structure of Unions
    1. locals
           a) closed shop – must be member
           b) union shop – must be member after a certain time
           c) open shop – membership not compulsory
    2. national and international unions
    3. federations and congresses – provide collective voice for unions – lobby gov’t

Collective Bargaining
   - union reps negotiating with employers over wages, benefits, working conditions &
job security
    1. mediation and arbitration – an outside party helps the two sides come to an
        agreement, but in the case of arbitration ruling is binding
    2. work to rule – slowing work down by doing the just the minimum required
    3. strikes – union members stop working to force their employers to agree to union
        - while striking union members will show they’re on strike by making signs and
        picketing their workplace
    4. lockouts and replacement workers – employers lock employees out of the
        to force them to agree to employer’s demands
        - employers may hire replacement workers (scabs) for striking workers

Unions and the Canadian Economy
  -1930s 20% of Cdn. workers were unionized whereas today it is 40%
  - nonunionized workers get paid 10-25% less than unionized workers

Unions and the Canadian Economy (cont’d)
   - nonunionized workers crowd into certain occupations causing the pay to be lower
because ^ Ss.

     Rent = Total Revenue – Total Costs
        - rent goes to landowner for the use of his fixed (perfectly inelastic) supply
            of land
        - total costs include implicit costs like farmer’s normal profit
        - pop. ^ > wheat prices ^ > rent ^
        - opposed Corn Laws which kept wheat prices high

           -   TR – TC
                         1. Return on Risk-Taking
                         2. Measure of Effectiveness
                         3. Source of Funds

        -   payment made for the use of money
        -   calculated based upon a % of the principal (amount of money being
   1. Loan Funds Market
         - market for all monies available to lenders by borrowers
         - contracts detailing the terms of borrowing money are called bonds

2. Range of Interest Rates
      a) credit risk         c) collateral
      b) loan period         d) size of loan

     a) wages & salaries 75.3%                 c) proprietor’s income/rent   8.0%
     b) interest income  10.0%                 d) corporate profits          6.6%

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