<p> Ch.8 Wages, Rent, Profit, and Interest (pgs 206-41)</p><p>WAGES - includes salaries and other forms of payment for labour</p><p>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</p><p>LABOUR UNIONS - effect wages, working hours, workplace standards and employment > W ^ but Empl.</p><p>Types of Unions 1. industrial – all workers in an industry 2. craft – particular occupation (eg. plumbers)</p><p>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</p><p>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 demands - 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</p><p>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 -2-</p><p>Unions and the Canadian Economy (cont’d) - nonunionized workers crowd into certain occupations causing the pay to be lower because ^ Ss.</p><p>DAVID RICARDO & THE THEORY OF RENT 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</p><p>PROFIT - TR – TC 1. Return on Risk-Taking 2. Measure of Effectiveness 3. Source of Funds</p><p>INTEREST - payment made for the use of money - calculated based upon a % of the principal (amount of money being borrowed) 1. Loan Funds Market - market for all monies available to lenders by borrowers - contracts detailing the terms of borrowing money are called bonds</p><p>2. Range of Interest Rates a) credit risk c) collateral b) loan period d) size of loan</p><p>SHARES OF TOTAL INCOME a) wages & salaries 75.3% c) proprietor’s income/rent 8.0% b) interest income 10.0% d) corporate profits 6.6%</p>