Derived Demand

Name

Institution

Derived Demand

Labor is “derived demand” because employers hire them for their inputs they made towards producing goods and services for sale. Labor creates what consumers are directly demanding, i.e. goods and services. There are several factors determining the number of labor an industry will need at any given wage-rate, and how it counters shifting economic conditions. These include the culture of consumer demand, the level of economic doings, the nature of production undertaken by the firm and the effectiveness of the labor.

Therefore, workers need to explore ways to maximize their income in order to cope with unexpected changes in the economy without endangering the long-term financial condition.

Education is a better tool to maximize income. Do not stop after achieving your first degree, forge on and get a master degree or PhD. Once one is through with all stages of education, s/he will automatically worth more pay than normal degree holder. Acquiring additional skills and knowledge enables one to easily understand his/her working environment. This maximization of education will automatically increase demand for ones services, and the higher the demand the greater the income (D.A.L, n.d).

Many employees are entitled to benefits and tax credits; however lack of information has made these benefits unclaimed. There are numerous types of benefits available to individual employees in different positions. It is advisable for employees to inquire if they are entitled to any benefits, no matter how small; it will still maximize your income (D.A.L, n.d).

The greatest tool in maximizing income is to minimize expenses. A budget planner can offer employees assistance on how to balance their income and expenditure. Employees should determine areas in which they can reduce costs around their homes and in their daily life. For instance, using public means of transport other than using private means can save you thousands of dollars each year. Another method is to use savings in servicing your debts. If one is in possession of savings and s/he has lots of debt, it is worth for this person to use his/her savings in servicing the debts as it will save him/her money in the long run. Many employees squander a lot of money saving when they have debts that charge interest (D.A.L, n.d).

In summary, the major ways to maximize income include education level, paying debts using savings, minimizing costs and benefits. Other methods to maximize income include reducing overdraft, work for extra hours, invest your money in profitable projects other than let your extra cash languish in low savings accounts, own a home instead of paying rents (D.A.L, n.d).

Debt Advice London (DAL). (n.d). Maximizing Income | Budgeting Advice. Retrieved from http://www.debtadvicelondon.co.uk/maximising-income.html.