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Wages and Me

Key Economic Concepts:

• Demand
• Human Capital
• Income
• Investment
• Supply

Description:

Students explore the reasons for differences in the wages for several occupations. Then students are guided through the Bureau of Labor Statistics website to find information about their potential careers and wage rates nationally and in their own states.

Lesson Objectives:

Students will:

• Explain that supply and demand are the primary factors in determining wages.
• Identify several specific factors that affect wage rates.
• Explore wage rates in their potential careers.
• Analyze why wage rates in their states may differ from the national average wage for their career.

Introduction:

Would you like to earn a high income? How can you go about achieving that goal? Many factors differentiate wages in a variety of occupations, as well as within the same occupation in different areas of the country. Knowing those factors can give you the information you need to find careers with the income levels you want. Let's find the wage rates in the career you are considering.

Resources:

• "Bureau of Labor Statistics": This website gives students access to wage information for a variety of careers.
www.stats.bls.gov/oes/2000/oes_nat.htm ^[1]

•"Bureau of Labor Statistics": This website gives students access to wage and career information for their own state or US territory, enabling them to make comparisons with the national averages.
www.stats.bls.gov/oes/2000/oessrcst.htm ^[2]

Process:

Several factors influence wages, including the supply of and demand for labor, the value of the products workers produce, and worker productivity. Workers who are productive and who produce highly-valued products will tend to earn higher wages. One of the most important factors in determining wages is the worker’s level of education. The higher the level of education, the more productive the worker tends to be. For this reason, many employers will invest in education and training of their employees, thus raising output and productivity for the firm, and increasing wages and the standard of living for workers.

A number of other factors also affect the wages of workers. Those with natural ability, such as concert musicians and professional athletes, can command a higher wage because of the low supply of workers with this level of ability. Employers will often pay higher wages to entice workers to accept positions with unpleasant aspects, such as midnight shifts, dangerous work, or jobs which require workers to move frequently around the country or world. Wages will often differ based on the cost of living in different regions; for example, the cost of living in California is higher than the cost of living in Indiana, so wages in general in California will be higher than those in Indiana. Derived demand can also affect wages, as the demand for the product will affect the demand for labor and the wages paid to those workers.

Let’s find out about the demand and wages for the career you are considering. If you have not yet chosen a career, look at a career that is interesting to you.

1. Click on the following link to open the official web site of the Federal Bureau of Labor Statistics: www.stats.bls.gov/oes/2000/oes_nat.htm ^[1]

2. Click on the link that contains the occupational area you have chosen or are considering.

3. Scroll down through the occupational titles to find the career that most closely matches the career you are considering.

4. Click on the “SOC Code Number”, Standard Occupational Classification (SOC), to the left of the name of the occupation. Use the information on that page to answer the questions below.

Note:

The SOC is the Standard Occupational Classification System. Federal agencies use this system to classify workers into occupations with similar job duties and education levels.

Standard Occupational Classification (SOC) system

This system will be used by all Federal statistical agencies to classify workers into occupational categories for the purpose of collecting, calculating, or disseminating data. All workers are classified into one of over 820 occupations according to their occupational definition. To facilitate classification, occupations are combined to form 23 major groups, 96 minor groups, and 449 broad occupations. Each broad occupation includes detailed occupation(s) requiring similar job duties, skills, education, or experience

Some careers are surprisingly missing from the statistics. Others may be listed in categories students may not expect. Some careers, while listed in the national data, may not be listed in state data because too few state residents work in that occupation, or for other reasons. Help students who have difficulty finding data to look under other categories or to choose occupations similar to those actually desired by the students.

Conclusion:

The forces of supply and demand are key to determining wage rates in our society. By learning how these and other factors affect the wages in your potential career, you can make wise choices regarding your education, skill development, and location, to maximize your potential income.

Links Used:

1. ^{^ ^} "http://stats.bls.gov/oes/2000/oes_nat.htm" - (stats.bls.gov)
2. ^{^} "http://stats.bls.gov/oes/2000/oessrcst.htm" - (stats.bls.gov)

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