Centralised Wage Determination System ? (1 Viewer)

[SGSII]

Hey

In simple terms, what is a centralised wage determination system ?

I dont understand the wordy definitions, so could you break it down for me ?

Thanks.

 

[powlmao]

Your in prelm


Central = everyone has same wage
Decentralize= there are different wage levels

 

[SGSII]

OMIGOD !
Thank you soo much !

Out of curiosity and for my knowledge, why did they change from centralised to decentralised?
If they all had the same wage, why did they make it so that people had different wages ?

 

[chrisman9519]

centralized is like how they a determined by a central source (more or less). Centralized wage determination is unions and stuff.

Decentralized is where there are many different agreements, like when one individual makes a custom agreement with their employer, that's decentralized wage determination

this is just more specific

 

[RishBonjour]

think about it this way
if you got the same wage as everyone else, regardless of your occupation, you wouldn't bother getting educated/specialised to get higher paid jobs would you?
Also, if your colleagues were slacking off (being unproductive) while you were working hard and being passionate about your job while getting the same wage, you would probably slack off too.
what does this lead to? an increase in overall inefficiency of our use of factors of production


BTW. i dont remember that being in prelims? but then again, its common sense, so I guess you should know

 

[EpikHigh]

OMIGOD !
Thank you soo much !

Out of curiosity and for my knowledge, why did they change from centralised to decentralised?
If they all had the same wage, why did they make it so that people had different wages ?

Centralised doesn't reward productivity, business would not have any say in pays so it wasn't flexible everyone was getting the same pay for the job. If a pay increase was issued through comapnies would increase prices to make up for the loss of money used on paying an employee more. Having centralised payments will lead to inflation no doubt because of that.

Decentralised is a lot better because it has an incentive (work harder earn more) and having the award system for minimum wage and having enterprise bargaining is a lot better because employees can go to their employer and ask for the pay rise etc and won't likely lead to inflation.

 

[23011]

decentralised creates a competitive market where employees seek to become as productive as they can in order to achieve higher wages. in simple terms, those on lower incomes envy those on higher incomes, so they try to attain better education to gain more profitable forms of employment, therefore increasing productivity of business, income of business, national income, raising standards of living etc
centralized creates a lazy labour force which is unproductive

 

[SGSII]

Thank you soo much !
All of your answers really did help