Macro Economics For downloading this contact- bikashkumar.bk100@gmail.com Prepared by Students of University of Rajshahi Group - Galaxy Bikash Kumar Rahid Hassan Uttam Kumar Md. Tarikul Islam Tarif Md. Rajib Hossain

1. Submitted By Submitted TO
Group Name: GALAXY
Group No. : 19
DEPARTMENT OF ACCOUNTING & INFORMATION SYSTEMS
UNIVERSITY OF RAJSHAHI
ON
Course Name: Micro Economics
Course No:110

2. DEFINITIONOFWAGES
The term ‘wages’ means payments made for
the services of LABOUR . A Wages is a price,
which paid by the employer to the worker on
account of labour performed.
“A wages may be defined as a sum of money
paid under contract by an employer to a worker
for services rendered” - Benham

3. Labour
COMMODITY?
•PECULIARITIES.
*DIFFERENCE FROM OTHER COMMODITY.
*PROTESTS AGAINST BEING DESCRIBED.

4. Types of WAGES
Main concepts:
1. NOMINAL WAGES: Nominal/Money wages are wages paid
or received in terms of money.
2. REAL WAGES: Real wages mean translation of money
wages into real terms or in terms of commodities and
services that money can buy. They refer to the
advantages of worker’s occupation, i.e. the amount of
the necessaries, comforts and luxuries of life which the
worker command in return for his services.
(a) Piece wages, (b) Time , (c) Cash, (d) Wages in Kind, (e) Contract wages. Etc.

5. 1. Purching Power of Money.
2. Subsidiary Earnings.
3. Extra Work without Extra Payment.
4. Regularity/Irregularity of Employment.
5. Conditions of Work.
6. Future Prospects.
Suppose ‘Rahim’ receives Tk. 5000 p.m. as money wages during the year.
Suppose also that midway through the year the prices of commodities,
that Rahim buys, go up, on the average by 50%. It means the money
wages remain same but real wages reduced by 50%. Real Wages also
include extra supplementary benefits along with the money wages.

6. 1. Subsistence Theory.
2. Wages Fund Theory.
3. Residual Claimant Theory.
4. Marginal Productivity Theory.
5. Taussing’s Theory of WAGES.

7. MODERNTHEORYOF WAGES
Demand for labour:
Vertical Line = Wages of
Labour,
Horizontal Line = Quantity
of Labour,
D= Demand
Curve.

8. Supply of Labour :
OY = Wages of Labour,
OX = Supply of Labour,
SS` = Supply Curve.
Continue…………….

9. Backward LABOUR Supply Curve :
s
Vertical = Wages Rate,
Horizontal = Supply of
Labour,
S = Supply Curve
Continue…………….

10. Marginal Productivity Theory of Wages
AW= Average Wages,
MW= Marginal wages,
MRP= Marginal Revenue
Productivity of Labour

11. TRADE UNION
Definition : Trade union or Labour union are organization formed
by workers from related fields that work for the common interest of
its members. They help workers in issues like fairness of pay, good
working environment, hours of work and benefits. They represent a
cluster of workers and provide a link between the Management and
Workers.
* FUNCTIONs of TRADE UNION
1. Increasing Co-operation and well being among workers.
2. Securing Facilities for workers.
3. Establishing contracts between the workers and Employees.
4. Working for Progress of the Employees.
5. Safeguarding the Interest of the workers.
6. Provision of labor welfare

12. CanTRADE UnionIncreaseWages ? Ways………
1.Stopping Exploitation.
2.Restricting Labour Supply.
3.Raising Standard Wage Rates.
4.Increasing Labour Demand.

13. WAGESDIFFERENTIALS….
1. Differences in Efficiency : These may be due to different inborn
qualities, education, training and conditions under which is performed.
When efficiencies are different, wages must be different.
2. Existence of Non-competing Groups: As explained above,
these groups arise because of the difficulties in the way of mobility of labour
from low paid to high paid employments. These difficulties may be due to
geographical, social or economic reasons. They may arise from lack of
transport facilities, existence family ties or caste barriers, and lack of means
for better training etc.
3. Differences in Agreeableness or Social esteem :
Disagreeable employment must pay higher wages in order to attract
labourers. If, however disagreeable work can be performed by unskilled
workers, who can not do anything better (due to caste or other disabilities),
wages may be quite low , e.g., sweepers in Bangladesh .

14. 4. Difficulty of learning a TRADE : The number of those who
can master difficult trades is small. There is supply is less than demand for
them, and their wages are higher.
5. Future Prospect : If an occupation provides opportunities for future
promotion, people will accept a lower start in it, as against another occupation
offering higher initial reward but no chances of rise in the future. The number
of top prizes available in a profession also accounts for differences in wages.
6. Hazardous and dangerous Occupation generally offer higher
emoluments.
7. Regularity or irregularity of employment – also exerts a strong
influence on the level of wages. Regular employment generally carries a low
SALARY.
8. Collective Bargaining : The differences in the strength and militancy
of trade unions also account for differences in wages in different industries .
Continue…………….

15. LowWAGESof WOMEN
In most cases , women are paid lower wages for doing the
same kind of work. There are several reasons for this:
Firstly – It is due to long habit and custom. Until comparatively recently,
a women was regarded as a household drudge even in advanced
countries. Even today women tend to crowd into occupation involving
drudgery and depress wages there.
Secondly – Since women do not make their work a life career, they do
not equip themselves with proper education and training. Their aim
normally is to get married and after marriage most of them cease to
earn independently.

16. Thirdly – For the same reason, women do not organize themselves
into trade unions to enforce higher wages for themselves. Their
employment being only a stop gap between school/college and
marriage, they do not try to improve their economic position.
Fourthly – Women workers are prepared to accept lower wages because
they have very limited obligation and responsibilities. In most cases, they do not
depend merely on their own earnings, even when they are in employment.
HUSBAND, brother or father, may and does, give them financial support.
Finally – Male workers are supposed to be more capable of
continuous and efficient work than female workers due to various
reasons.………………
Continue…………….

17. Men are physically stronger and can undertake more strenuous work
and can bear much greater nervous strain. Moreover, a woman, on
account of biological reasons, is partly or wholly incapacitated for full
work during certain period of her life.
Continue…………….

18. Criteria and Procedure of Minimum Wage
Fixing in Bangladesh
According to ILO Minimum Wage Fixing Convention 1970 (No. 131), the
following six criteria, have to be taken into consideration, while fixing the
level of minimum wages for the workers:
(a) needs of workers and their families;
(b) general level of wages in the country;
(c) cost of living;
(d) social security benefits;
(e) relative living standard of other social groups; and
(f) economic factors which include the requirements of economic development,
levels of productivity and the desirability of attaining and maintaining a high level
of employment.
Considering the minimum wage fixing criteria listed in ILO, Bangladesh Labour Law
2006 provides the minimum wage fixing criteria. It declares that, in fixing minimum
wages the Minimum Wage Board of Bangladesh should take into consideration—
a)cost of living b)standard of living c) cost of production d)productivity d) price of
products e) business capability f)economic and social conditions of the country and
of the locality concerned and g)other relevant factors.