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Labor and Wages

The type of job one does and the financial compensation he or she receives are very important in our society. Job type is linked to status as is wealth. While the type of job one performs is arguably more important status wise then wealth, both are important to Americans.

In the past we used to use other descriptions to classify workers. The terms blue collar or white collar employees were used to describe the type of vocation.

Blue Collar - Manual laborers

White Collar - Officer workers

Pink Collar - Jobs associated with women like nursing, secretarial, etc. This being a rather sexist term, is no longer used.

Today we classify our work roles into three categories called labor grades. The se labor grades are described below:

Skilled Labor - These are workers who have received specialized training to do their jobs. They have developed and honed a special skill and may or may not need to be licensed of certified by the state. Some examples of skilled labor are: carpenters, plumbers, electricians, business executives and managers, artisans, accountants, engineers, police, mechanics, etc. These may be blue or white collar workers.

Unskilled Labor - These are workers who have received no special training and have few specific skills. As our society has grown into an increasingly technological one, the members of this group have developed more and more skills. A mechanic, for example, used to be considered unskilled labor. Today that is no longer the case. Mechanics require a great deal of skill and training to work with today's modern engines. Examples of unskilled laborers are construction workers, sanitation and custodial workers, painters, factory assembly line workers, etc. These are blue collar workers.

Professionals - Arguably the elite of the labor grades, these are those workers who need an advanced degree to do their jobs. The three primary groups of professional are doctors, lawyers and teachers. These are white collar workers.

These labor grades are often said to be non competing labor grades because workers rarely move from one grade to another and do not compete salary wise with each other. There are reasons why they do not compete with each other. The cost of education and training may be a significant obstacle. They might lack the opportunity to make such a move and they might also have a lack of initiative.


Theories of Wages and Salaries

There are two key theories that explain why salaries are the way they are in a particular field. These two theories are:

Traditional Theory of Wage Determination - In this theory the law of supply and demand dictates salary. These days programmers are in short supply and are in great demand thus they will command a higher salary. Likewise doctors and lawyers whose specialized skills people need command a high wage. If you looked at the bill my electrician gave me you would know he is in demand!

Theory of Negotiated Wages - Those employees who work in unions where the union negotiates salary on behalf of all workers fit into this theory. Since I am a teacher my salary is set by collective bargaining with my union. I may be the best teacher in the world sought after by many students and parents but it wouldn't matter.

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