What is labor and income?

0:00- [Instructor] So, let's talk a little bit about labor and income. And actually I'm going to start with the income part of it. What is income? Maybe you wanna pause this video and think about it yourself. You might have heard the term before. Well, the way I think about it is you're getting income if someone is paying you for something.

0:18So, if this is you right over here and someone is paying you. If they just give you money and you're not doing anything in return for that, they're just giving you a gift. But if you're doing something in return, and what could that something in return be? You could be providing them with, you might be selling something to them.

0:37Let's say you're selling them a lemon since I'm already using yellow. Or you could be doing something for them. You could be providing labor for them. What is labor? Well, imagine if folks are paying you to walk their dog. The money you get is income and you are providing labor.

0:54You are walking their dog. Or if someone's paying you to babysit their kids. They are giving you money so that you spend time to take care of their kids, make sure they're safe, hopefully doing something useful. Now, what is, what are usually some of the things people think about in terms of how much money you get?

1:14Especially when we're thinking about labor. We're not gonna talk about when you sell objects that, maybe that's in another video. But what usually determines how much money you get for your labor? Well, one is time. The more time that you spend, usually the more money that you get.

1:30Sometimes you've heard people getting paid by the hour or by the month or by the year. That's time. The more time, the more money you get. There is also skill. Usually, you get paid more for very highly skilled work. For example, someone who is performing brain surgery.

1:52That's a lot of skill. And it takes a lot of time to learn how to become a surgeon. And very few people know how to do that. They usually get paid more, say per hour than say, someone who is walking a dog. Not that walking a dog isn't a great skill. I just finished walking my dog.

2:07But brain surgery, fewer people can do it than can walk a dog. And then, related to that is demand. It's not always about time and skill. For example, you might take a lot of time and it might take a lot of skill to paint super tiny seashells, but there might not be a lot of demand for it.

2:25In which case, people might not pay a lot for your labor. And just to get a sense of the types of occupations people might not do and maybe tie this connection of labor and income a little bit closer together. I have a table here that has a bunch of professions.

2:43And it depends where you go and what year you're looking at on how, what these numbers might be. People tend to get paid differently in different parts of the world. Once again, depending on demand, and also depending on what's going on in that local city. But let's just say for the sake of argument that these are accurate where you live.

3:05So if you're an optician, that would be someone who maybe helps you get eyeglasses. It takes one year of education. And I think these are reasonably accurate, but let's just assume they're accurate. And you get paid $37,000 a year. Some places you might get paid a lot more than that, but let's just go with these numbers.

3:23So you see, based on this table, two years to become a mechanic after high school. You get paid a little bit more. All the way up to an orthodontist. That's someone who helps you fix your teeth, get them straight, gets you braces. 10 years of education after high school.

3:37They get paid $225,000 a year. So, do you see a trend here? Well, one of the trends that you might be noticing is generally speaking, the more education that's required, and that you could say education and skill, it's not always the same thing. But generally speaking, as education goes up, we generally see that income goes up.

4:01But that's not always the case. For example, at least in this example, we're seeing an architect might take a little bit more time to do than a computer engineer, but at least in this example, an architect is making less. And the typical annual salary doesn't tell you the whole story.

4:16For example, it might be harder to get a job as say, a computer engineer than an architect or vice versa. So, there's other things that you wanna talk about, think about. Now, generally, most of us want to make more money, but money isn't everything. And so, when you think about your connection between labor and income, it usually is a good idea to get more skills, more education.

4:41And it's not just about education that gives you skill. It's also experience and things that you've done, time on the job, all of those things can help you build your skills. So, it's usually good to have higher skill, but you also wanna work on something that you enjoy, that you really have a passion for.

5:00Because beyond a certain point, it really matters how you spend your time. Most times your profession is where you spend a large part of your day. But anyway, I just wanted to use this video to make you think about, all right, in your life you're likely to do things for people in order to get money.

5:16The amount, what you get paid in your income is probably going to be at least a little bit related to how much training you needed, the level of skill, and definitely the level of demand. And you could also say the supply, because if there's a lot of people willing to do that, then maybe don't have people, employers might not have to pay as much for that.