--- title: "Wages and the Labour Market" description: "Work is traded in a market where firms buy and workers sell, and the wage is the price. Demand for a skill comes from what it earns the employer, supply from how many people can and will do the job, w" canonical: https://lightmysky.com/learn/civics-and-economics/wages-and-the-labour-market-mt_GhsftwhrYS source: https://lightmysky.com/learn/civics-and-economics/wages-and-the-labour-market-mt_GhsftwhrYS.md retrieved: 2026-09-12 --- > **Agent view.** This is the Markdown twin of the page, for tools and assistants. > When to use this site, and the call that answers each job: https://lightmysky.com/agent-instructions.md > API description (OpenAPI 3.1): https://lightmysky.com/openapi.json · Authentication: https://lightmysky.com/auth.md > Pricing: https://lightmysky.com/pricing.md · Catalog: https://lightmysky.com/llms.txt · Full catalog: https://lightmysky.com/llms-full.txt > Every machine-readable file on this domain: https://lightmysky.com/.well-known/ai-catalog.json > Ask for Markdown with `Accept: text/markdown`, a `.md` address, or `?mode=agent`. # Wages and the Labour Market Work is traded in a market where firms buy and workers sell, and the wage is the price. Demand for a skill comes from what it earns the employer, supply from how many people can and will do the job, which is what pay gaps between jobs are made of. Subject: Civics & Economics · Area: Economics · Ages 15 to 16 Page: https://lightmysky.com/learn/civics-and-economics/wages-and-the-labour-market-mt_GhsftwhrYS ## Ready when they can - Explain a pay gap between two jobs using demand for the skill and supply of people who hold it - Predict the effect of a minimum wage set above the market wage, naming both the gain and the risk - Describe how a union, or a town with one dominant employer, changes the bargain ## Lesson: What a wage is made of Jobs have prices too, and they are called wages. Employers demand labour because workers produce things buyers want, so demand for labour derives from demand for the product. Households supply labour by trading hours for pay, weighing wages against rest and study. Where the two meet sits the market wage for that skill. If software booms, demand for coders shifts right and their pay climbs. **Example.** Surgeons earn more than cleaners because few people can do surgery while demand for operations stays strong. Risk, night shifts, and long training also push wages up as compensation for hardship and cost. Schooling, talent, location, and bargaining power widen the spread further. Discrimination can twist the pattern, paying equally skilled people differently for no fair reason. To explain any gap, ask which side moved. Workers can bargain as one through a union, which acts like a single seller of labour. By threatening to strike, the union can lift wages above the lone-worker bargain, often trading some jobs for better pay and conditions. Unions also press for safety rules, pensions, and fair dismissal steps. Employers may answer with lockouts or replacement hires where the law allows. Collective voice shifts the deal but never escapes supply and demand. **Tip.** A minimum wage set above the market wage works like a price floor. Kept workers gain higher pay, but employers offer fewer jobs, so some seekers go without. The young and low skilled face the highest risk of fewer openings. And in a town with one dominant employer, wages can sit below the competitive level, since workers have nowhere else to go. **Recap.** Demand for the product pulls, supply of the skill pushes, and power shifts the result. ## Practice 8 questions on this page, each with its working shown. ## Needs first - [Productivity, Skills and Tools](https://lightmysky.com/learn/civics-and-economics/productivity-skills-and-tools-mt_q9wqRR_1Vk) - [Price Ceilings and Price Floors](https://lightmysky.com/learn/civics-and-economics/price-ceilings-and-price-floors-mt_ycfT-gkRVy)