MANA 443 Lecture Notes - Lecture 6: Reservation Wage, Relevant Market, Human Capital
Document Summary
The idea that job seekers have a reservation wage level below which they will not accept a job, no matter how attractive the other job attributes. The idea that higher earnings are made by people who improve their potential productivity by acquiring education, training and experience. Two key product market factors affect ability of a firm to change price of its products or. Employer"s ability to pay is affected by both its ability to compete and general market conditions. Level of product demand puts a lid on maximum pay level an employer can set. Degree of competition in highly competitive markets, employers are less able to raise prices without loss of revenue (how much you can pay?) services. Labor-intensive industries tend to pay lower than technology-intensive industries; New technology within an industry influences pay levels: employer size. Large organizations tend to pay more than small ones added customer segments eg nike (low wage no services), marriott (low wage high.