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.
In this lesson you will explain that supply and demand are the primary factors in determining wages. You will also, identify several specific factors that affect wage rates and explore wage rates in your potential career. Lastly, you will analyze why wage rates in your state may differ from the national average wage for your career.
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 .
2. Click on the link that contains the occupational area you have chosen or are considering. You can also search by state by clicking here .
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.
What occupation did you choose?
Was the job description listed for your chosen profession?
About how many Americans are employed in that occupation?
What is the mean annual wage for that occupation?
What is the annual wage rate for the lowest-paid ten percent of workers in that occupation?
What is the annual wage rate for the highest-paid ten percent of workers in that occupation?
Visit this website: [EEL-link id='3432' title='bls.gov/oes/current/oessrcst.htm' ] and find the mean annual income for that occupation for residents from your state.
How does your state's mean annual income for your occupation compare to the national mean annual income for that occupation?
If there is a difference, what do you think is the primary reason for that difference?
- Will you stay in your state for your career, or do you think you will move away? Why?
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.