Topic: Understanding the labour market. Part I

Author: Anna Rabiega

Addressee:

8th‑grade primary school student.

Core curriculum:

Expanded material for gifted students.

The general aim of education:

The student has some basic knowledge on the labour market.

Learning outcomes:

The student:

• defines the concept of “labour market” and explains its specific nature.

• defines the following: concepts: working person, employee, employer.

• presents the different elements and types of remuneration for work.

• explains what minimum wage is and analyses the positive and negative consequences of introducing such a solution in a state.

Key competences:

• communicating in a foreign language,

• digital competence,

• learning to learn,

• social and civic competences,

• sense of initiative and entrepreneurship.

Teaching methods:

• discussion (in a circle),

• teaching conversation using interactive scheme.

Forms of work:

• work in pairs,

• group work,

• whole‑class activity.

Material & equipment needed:

• computers with loudspeakers/headphones and internet access,

• multimedia resources from the e‑textbook,

• interactive whiteboard/blackboard, felt‑tip pen/a piece of chalk.

Lesson plan overview (Process):

Introduction:

1. During the previous class, the teacher asked the students to familiarize themselves with the abstract. The students should prepare to work in such a way as to be able to summarize the read material with their own words and to solve the tasks on their own and take part in the discussion.

2. The teacher presents the goal of the lesson: You will learn how the labour market works.

3. The teacher asks the students to explain what their understanding of the term „market” is. For this purpose, the teacher can ask guiding questions during a teaching conversation, e.g.:

• In most of the towns there is a place called the market - where did this name come from?

• What happened there?

• Who frequented these places and for what reason?

4. Once the students have established a definition of the term „market”, the teacher continues the conversation by asking further questions:

• What is the subject of exchange in the labour market?

• Who are the sellers and buyers in the labour market?

• What is the „price” of work called?

At the end of this teaching conversation, the teacher asks a willing/selected student to provide a definition of the term „labour market”.

Implementation:

1. The teacher divides the class into four groups. The teacher informs the students that each of them is supposed to prepare a short explanation of the terms assigned to them: group 1 – working person; group 2 – employee; group 3 – employer; group 4 – age of the employee. The teacher sets a time limit for this task, and afterwards the group representatives present the results. The teacher then displays on an interactive whiteboard the „Who is who in the labour market” scheme, thanks to which the students verify their answers.

2. The teacher initiates a short discussion on what the students think has an impact on the amount of remuneration the employee receives. Willing/selected students give their suggestions. The teacher complements and improves the students' statements.

3. The teacher asks students if they have heard of the term „minimum wage” and what their understanding of the term is. Willing/selected students give their suggestions. The teacher complements and improves the students' statements.

4. The teacher informs students that they are to discuss the functioning of the minimum wage. The teacher asks the students to stand in two circles – one inside the other – so that the students standing in the inner and outer circle can face each other. This way, the students are connected in pairs. It is the task of the students from the inner circle to present and explain one argument in favour of the existence of minimum wage, while the students from the outer circle are to give and explain one argument against this form of guarantee of remuneration. The teacher specifies the amount of time that is given to complete the task. When the time is up, the outer circle of students starts to move clockwise and the inner circle starts to move in the opposite direction. After a few seconds, the teacher signals them to stop and the students form new pairs. This time, students from the inner circle present and explain one argument against the existence of minimum wage, while students from the outer circle present and explain the argument in favour of this form of guarantee of remuneration. The teacher specifies the amount of time that is given to complete the task. The students switch their positions once again, form pairs and their roles are reversed again. The teacher repeats all this several times so that different students with different roles assigned to them can talk to each other about minimum wage.

The aim of the exercise is not only to present arguments and counter‑arguments, but above all to develop the students' argumentation skills.

5. At the end of the exercise, the teacher asks the students which of the arguments they heard they found the most convincing and why. Willing / selected students present their ideas. If necessary, the teacher corrects and completes the students' presentations.

Summary:

1. At the end of the class, the teacher asks questions to encourage students to conclude what they have learnt, e.g.

• What is the meaning of the term “labour market”?

• What affects the employee's remuneration?

• What is the minimum wage? What is in favour and what is against its introduction?

2. Homework proposal:

a. What is your opinion on minimum wage? Argue for and against this form of guarantee of remuneration (Exercise 1).

b. Listen to the abstract recording to review the material and new vocabulary. Then do the vocabulary exercise at the end of the chapter.

The following terms and recordings will be used during this lesson

Terms

Texts and recordings

Understanding the labour market. Part I

A labour market

We already know what a market is. We also know that the concept of the market is very wide, as it covers various trade transactions. If we take into account the criterion of the subject of the transaction, apart from commodities, services and capital markets, we would also distinguish the labour market. There is no doubt that it is a very specific market. The emergence of the labour market was a consequence of treating human work as if it was a commodity. This “product”, however, stands out from other “products” because of its properties. Unlike any other product, labour is characterized by its “own will and the ability to make decisions”. What is the subject of exchange on the labour market (i.e. work) may look for the buyer (employer) to the same extent as the buyer is looking for the product. The main components of the labour market are, therefore:

• the supply of labour (labour force) created by people who are able and willing to work,

• the demand for work (available workplaces, both in terms of quantity and quality of workplaces offered), which manifests itself in a specific configuration of jobs offered in the market.

The relations between supply and demand for labour are determined by its value (price), which in the case of the labour market takes the form of a wage. Labour resources, both on the scale of an economic organization as well as the national and world economy, are very valuable. Effective use of these resources is the basis for economic growth and development.

The demand side of the labour market are employers who are searching for someone who will work for them. On the other hand, the labour supply are potential employees, looking for jobs.

The balance between these sides of the market is very rare. The labour market is also subject to economic changes. Sometimes we deal with the so‑called employer's market (when the labour supply exceeds the demand and we face the phenomenon of unemployment). Other times it is an employee’s market (in this situation, the demand for labour is greater than the supply and there is a shortage of employees, for example in some industries or occupations). There is also a possible imbalance in the market with a small number of people who are unemployed but are not willing to work. In economics, such unemployment is called natural unemployment.

An important element of the labour market is the price of work, i.e. the remuneration for the work performed. It is called a salary or a wage. It can be assumed that this is a benefit which the employer is obliged to pay to the employee periodically in return for the work he has done, according to the type of work, quantity and quality.

A salary

A salary is both basic pay and additional remuneration components, e.g. bonuses, awards, overtime pay, holiday pay, as well as various types of benefits and receivables being a consequence of employment, such as retirement and pension benefits, jubilee bonuses, cash equivalents, compensation, etc.

The provisions on remuneration (in the Labour Code) mention two types of remuneration components:

• obligatory elements, i.e. the rates of basic remuneration for a particular type of work or a specific position,

• optional components, i.e. additional components that are awarded to an employee under the employer's payroll regulations. From the employer's point of view, all this is the cost of employment.

A bonus

A bonus is a one‑off financial award for specific employee's performance, a component of remuneration awarded to the employee as a supplement to the basic pay, and dependent on meeting certain criteria. Bonus rules in a company should be precisely defined. There are many types of bonuses, e.g. for: a quantitative increase in the tasks performed, quality improvement, reduction of operating costs, saving raw materials, energy and other resources, timely or early performance of tasks.

When talking about the components of a salary, it is worth explaining the difference between gross and net, as well as nominal and real salary.

Gross salary (wage) is the amount of remuneration from which the employer deducts compulsory public benefits, such as social security and health insurance contributions, and an advanced payment of personal income tax. Net salary, in other words “take‑home pay”, is what remains after the deduction of public benefits.

It should be noted that the concept of gross or net remuneration does not appear in the labour law at all, and is colloquial in nature. The law only uses the concept of remuneration for work. Therefore, the information about remuneration contained in the employment contract without additional word definition must be understood as „gross” remuneration.

The nominal remuneration does not take into account the phenomenon of inflation. When real remuneration is given, the increase in prices in the economy is taken into account. Thus, we include in it the so‑called purchasing power of money.

How much we earn depends on many factors – for example, the region (country) in which we work or our education. However, there is a specific type of remuneration, called minimum wage, uniform throughout the country, below which a full‑time employee cannot be paid. This is a kind of „minimal price” on the labour market.

In Poland, the minimum wage is set annually on the basis of the Act on the minimum remuneration for work. In accordance with the act, the minimum wage is negotiated in the so‑called Social Dialogue Council and accepted by the government. It was first established for 2003 and was 800 zlotys then. From January 1, 2018 it is 2100 zlotys.

According to the data of the European Statistical Office (Eurostat), in January 2013 twenty European Union countries had some kind of minimum wage regulations. These were: Belgium, Bulgaria, the Czech Republic, Estonia, Ireland, Greece, Spain, France, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Poland, Portugal, Romania, Slovenia, Slovakia and the United Kingdom.

The minimum wage arouses many controversies. Its supporters emphasize the importance of such a regulation for combating poverty and believe that the higher it is, compared to the level of average pay, the better the situation of employees. Opponents stress that wages should not be „imposed” or determined officially, but freely shaped by the market. The existence of such remuneration – in their opinion – causes an increase in labour costs, especially in the case of young employees. The increase in the level of the minimum wage also results in an increase in unemployment.