Unit 3: Personal Finance

Chapter 6

The Wage Is Right!

Background: This is a series of short classroom games that encourage students to apply the supply and demand model to labor markets.  In this version, you guess the median earnings of different occupations and predict which will grow the fastest. 

Directions: I will project the names of the three occupations listed in each

game on the board.  Read the descriptions for each occupation from the board, and

write a “1” over the occupation with the highest earnings, a “2” over the one with the second highest earnings, and a “3” over the one with the lowest earnings.

The next round is to guess which of the three occupations is predicted to grow the fastest through 2018.

Round 1- Rank By Salary Pharmacists

dispense prescribed drugs and talk to patients about how to use them. To practice pharmacy, one must graduate from an accredited college of pharmacy and obtain a license. This usually requires at least 6 years of study after high school.

Travel agents give advice to prospective travelers and make arrangements for

transportation, hotel accommodations, car rentals, tours, and recreation. The minimum requirement is a high school diploma or equivalent. Many vocational schools offer 6- to 12-week full-time travel agent programs.

Civil Engineers design and supervise the construction of roads, buildings, airports,

dams, bridges, and other structures. To become a civil engineer, it’s usually necessary to have a bachelor’s degree in engineering. Engineering students take a lot of science and mathematics courses.

Solution: Pharmacists (Median annual earnings in 2008 = $106,410.) Civil engineers (Median annual earnings in 2008 = $94,600.) Travel agents (Median annual earnings in 2008 = $30,570.)

Round 1- Fastest Growing

Civil engineers are expected to have employment growth of 24 percent over the projections decade, much faster than the average for all occupations. Spurred by general population growth and the related need to improve the Nation's infrastructure, more civil engineers will be needed to design and construct or expand transportation, water supply, and pollution control systems, and buildings and building complexes.

Employment of pharmacists is expected to grow by 17 percent between 2008 and 2018, which is faster than the average for all occupations. The increasing numbers of middle-aged and elderly people—who use more prescription drugs than younger people—will continue to spur demand for pharmacists throughout the projection period.

Employment of travel agents is expected to decline by 1 percent, which is considered little or no change in employment over the 2008–18 period. The ease of Internet use and the ready availability of travel and airline Web sites that allow people to research and plan their own trips, make their own reservations, and purchase their own tickets will result in less demand for travel agents for routine travel arrangements.

Round 2- Rank By Salary

Roofers repair and install roofs. The work is hot and strenuous. Most roofers acquire their

skills by working with experienced roofers. Good physical condition and good balance are essential.

Pest control workers locate, identify, and get rid of pests. Applicants should have a high school

diploma, good communication skills, and a good driving record. Once hired, they serve as apprentices until they’ve completed a training program and passed a written exam for a license.

Home health aides help disabled and ill persons live in their own homes or in residential care

facilities. They should be responsible, compassionate, and cheerful. Some states require that aides receive formal training, but many do not.

Solution: Roofers. Median annual earnings were $33,630 in 2008. Pest control workers. Median annual earnings were $29,890 in 2008. Home health aides. Median annual earnings were $20,460 in 2008.

Round 1- Fastest Growing

Employment of home health aides is projected to grow by 50 percent between 2008 and 2018, which is much faster than average for all occupations. The expected growth is due, in large part, to the projected rise in the number of elderly people.

Employment of pest control workers is expected to grow by 15 percent between 2008 and 2018, which is faster than the average for all occupations. More people are expected to use pest control services as environmental and health concerns and improvements in the standard of living convince more people to hire professionals, rather than attempt pest control work themselves.

Employment of roofers is expected to grow 4 percent between 2008 and 2018, slower than the average for all occupations. So as building construction increases, some demand for roofers can be expected. Employment growth, nonetheless, may be impeded because a greater proportion of roofing work may be completed by other construction workers as opposed to traditional roofing contractors.

Round 3- Rank By Salary

Landscape architects design outdoor areas like parks and playgrounds, and plan the arrangement of

plants, walkways, and irrigation systems for businesses and residences. A bachelor’s or master’s degree in landscape architecture is usually necessary. Most states also require landscape architects to be licensed or registered.

Data Entry and information processing workers type information into computers. Applicants should have a high school diploma,

and have a good command of spelling, punctuation, and grammar. Home appliance repairers

keep appliances like microwave ovens, washers, and dryers working. Repairers usually have a high school diploma, and most of them acquire their skills either on the job or in a trade school or community college.

Solution: Landscape architects. Median annual earnings were $58,960 in 2008. Home appliance repairers. Median annual earnings were $33,910 in 2008. Data Entry and information processing workers. Median annual earnings were

$31,390 in 2008.

Round 3- Fastest Growing

Employment of landscape architects is expected to increase by 20 percent during the 2008–18 decade, which is much faster than the average for all occupations. Employment will grow as the planning and development of new construction, together with the continued redevelopment of existing buildings, creates more opportunities for landscape architects.

Employment of home appliance repairers will increase by 2 percent between 2008 and 2018, reflecting the difficulty of employers in finding qualified applicants. Little to no change in employment of home appliance repairers is projected. However, excellent job opportunities are projected, particularly for individuals with formal training in appliance repair and electronics.

Employment of data entry and information processing workers is expected to decline moderately. Improved technologies and greater social acceptance of workers performing their own data entry and information processing work will lessen the need for these workers, except for highly detailed or sophisticated work.

Round 4- Rank By Salary Flight attendants

make sure that airline safety regulations are followed, and try to make flights comfortable for passengers. Airlines prefer to hire pleasant and resourceful people who can work well with others and remain calm under duress. Once hired, candidates are usually trained by their airlines for 4 to 7 weeks. The majority of flight attendants hold union membership.

Correctional officers are responsible for watching over people who are awaiting trial or who have been

sentenced to serve time in a jail, prison, or other correctional institution. The work can be stressful and dangerous. Most institutions require correctional officers to have a high school education or its equivalent. Once hired, officer trainees typically receive several weeks or months of training.

Air traffic controllers monitor air traffic at airports to make sure that planes stay a safe distance apart.

Trainees are selected through the competitive Federal Civil Service system. Applicants usually must have 3 years of general work experience or 4 years of college, or a combination of both. Trainees receive 7 months of intensive training at the FAA academy.

Solution: Air traffic controllers. Median annual earnings were $111,870 in 2008. Correctional officers. Median annual earnings were $38,380 in 2008. Flight attendants. Median annual earnings were $35,930 in 2008.

Round 4- Fastest Growing

Employment of air traffic controllers is projected to grow by 13 percent from 2008 to 2018, which is about as fast as the average for all occupations. Increasing air traffic will require more controllers to handle the additional work.

Employment of correctional officers is expected to grow 9 percent between 2008 and 2018, about as fast as the average for all occupations. Increasing demand for correctional officers will stem from population growth and rising rates of incarceration. Mandatory sentencing guidelines calling for longer sentences and reduced parole for inmates are a primary reason for increasing incarceration rates. Both State and Federal corrections agencies are increasingly using private prisons.

Employment of flight attendants is expected to grow by 8 percent, which is about as fast as the average for all occupations over the 2008–18 period. Population growth and an improving economy are expected to boost the number of airline passengers. As airlines expand their capacity to meet rising demand by increasing the number and size of planes in operation and the number of flights offered, more flight attendants will be needed.

Round 5- Rank By Salary Dental assistants

prepare patients for treatment, obtain dental records, hand instruments to dentists, sterilize instruments, and instruct patients on oral health care. Dental assistants usually have a high school diploma or equivalent, and a diploma or certificate from a dental assisting training program. These training programs often take one year or less to complete.

Meter readers read electric, gas, water, and other meters and record the volume used. They

walk or drive along a route. Most applicants have a high school diploma. Firefighters

put out fires, treat injuries, and perform other important functions. Applicants generally must pass a written and medical exam, as well as tests of strength, stamina, coordination, and agility. Applicants usually face stiff competition for available jobs, since many people are attracted to firefighting. Examinations are generally open to persons who are at least 18 years of age and have a high school education or the equivalent.

Solution: Firefighters. Median annual earnings were $44,260 in 2008. Meter readers. Median annual earnings were $32,950 in 2008. Dental assistants. Median annual earnings were $32,380 in 2008.

Round 5- Fastest Growing

Employment for dental assistants is expected to grow 36 percent from 2008 to 2018, which is much faster than the average for all occupations. Population growth, greater retention of natural teeth by middle-aged and older people, and an increased focus on preventative dental care for younger generations will fuel demand for dental services. In addition, as dentists' workloads increase, they are expected to hire more assistants to perform routine tasks, so that they may devote their own time to more complex procedures.

Employment of fire fighters is expected to grow by 19 percent over the 2008–18 decade, which is faster than the average for all occupations. Most job growth will stem from volunteer fire fighting positions being converted to paid positions. Furthermore, a trend toward more people living in and around cities has increased the demand for fire fighters. When areas develop and become more densely populated, emergencies and fires affect more buildings and more people and, therefore, require more fire fighters.

Employment of Meter readers is expected to decline rapidly. New Automatic Meter Reader (AMR) systems allow meters to be monitored and billed from a central point, reducing the need for meter readers.

Round 6- Rank By Salary Construction managers

plan, direct, coordinate, and budget a wide variety of construction projects. They schedule and coordinate all design and construction processes, including the selection, hiring, and oversight of specialty trade contractors, but they usually do not do any actual construction of the structure. Several colleges and universities offer a master's degree program in construction management or construction science.

Grocery store cashiers total bills, receive money, and make change. They’re often expected to

work on weekends, evenings, and holidays. Many work part time. Employers often prefer applicants with high school diplomas.

Animal caretakers feed, groom, and exercise animals. They work at boarding kennels,

animal shelters, and other places where animals are kept. Most animal caretakers are trained on the job.

Solution: Construction Manager. Median annual earnings of machinists were

$79,860 in 2008. Animal caretakers. Median annual earnings of animal caretakers were

$19,360 in 2008. Grocery store cashiers. Median annual earnings were $17,660 in 2008.

Round 6- Fastest Growing

Employment of animal care and service workers is expected to grow 21 percent over the 2008–18 decade, much faster than the average for all occupations. The companion pet population, which drives employment of animal caretakers in kennels, grooming shops, animal shelters, and veterinary clinics and hospitals, is anticipated to increase. Pet owners—including a large number of baby boomers, whose disposable income is expected to increase as they age—are expected to increasingly purchase grooming services, daily and overnight boarding services, training services, and veterinary services, resulting in more jobs for animal care and service workers.

Employment of construction managers is projected to increase by 17 percent during the 2008–18 decade, faster than average for all occupations. Construction managers will be needed as the level and variety of construction activity expands, but at a slower rate than in the past. A growing emphasis on making buildings more energy efficient should create additional jobs for construction managers involved in retrofitting buildings.

Employment of cashiers is expected to grow by 4 percent between 2008 and 2018 which is slower than the average for all occupations. Continued growth in retail sales is expected, but the rising popularity of purchasing goods online will limit the employment growth of cashiers. Also, the growing use of self-service checkout systems in retail trade, especially at grocery stores, should have an adverse effect on employment of cashiers.

Credit

Advantages of Using Credit

Able to buy needed items nowDon’t have to carry cashCreates a record of purchasesMore convenient than writing checksConsolidates bills into one payment

Disadvantages of Using Credit

Interest (higher cost of items)May require additional feesFinancial difficulties may arise if one loses

track of how much has been spent each month

Increased impulse buying may occur

The 3 C’sCharacter—will you repay the debt?From your credit history, does it look like you

possess the honesty and reliability to pay credit debts?Have you used credit before?Do you pay your bills on time?Do you have a good credit report?Can you provide character references?How long have you lived at your present address?How long have you been at your present job?

The 3 C’s

Capital—what if you don’t repay the debt?Do you have any valuable assets such as

real estate, savings, or investments that could be used to repay credit debts if income is unavailable?What property do you own that can secure the

loan?Do you have a savings account?Do you have investments to use as collateral?

The 3 C’s

Capacity—can you repay the debt?Have you been working regularly in an

occupation that is likely to provide enough income to support your credit use?Do you have a steady job? What is your salary?How many other loan payments do you have?What are your current living expenses? What

are your current debts?How many dependents do you have?

Your Responsibilities

Borrow only what you can repay.Read and understand the credit contract.Pay debts promptly.Notify creditor if you cannot meet payments.Report lost or stolen credit cards promptly.Never give your card number over the phone

unless you initiated the call or are certain of the caller’s identity.

Your Rights

Truth in lending act (1968)Ensures consumers are fully informed about cost

and conditions of borrowing. Fair credit reporting act (1970)

Protects the privacy and accuracy of information in a credit check.

Equal opportunity act (1974)Prohibits discrimination in giving credit on the basis

of sex, race, color, religion, national origin, marital status, age, or receipt of public assistance.

Your Rights

Fair credit billing act (1974)Sets up a procedure for the quick correction of

mistakes that appear on consumer credit accounts.

 Fair debt collection practices act (1977)Prevents abuse by professional debt collectors,

and applies to anyone employed to collect debts owed to others; does not apply to banks or other businesses collecting their own accounts.

Building a Credit HistoryEstablish a steady work record.Pay all bills promptly.Open a checking account and don’t bounce checks.Open a savings account and make regular deposits.Apply for a local store credit card and make regular

monthly payments.Apply for a small loan using your savings account as

collateral.Get a co-signer on a loan and pay back the loan as

agreed.

Types and Sources of Credit

Single-payment creditItems and services are paid for in a single

payment, within a given time period, after the purchase.

Interest is usually not charged.Utility companies, medical servicesSome retail businesses

Installment Credit

Merchandise and services are paid for in two or more regularly scheduled payments of a set amount. Interest is included.

Some retail businesses, such as car and appliance dealers provide it

Money may also be loaned for a special purpose, with the consumer agreeing to repay the debt in two or more regularly scheduled payments.

Types and Sources of Credit

Revolving creditMany items can be bought using this plan as

long as the total amount does not go over the credit user’s assigned dollar limit. Repayment is made at regular time intervals for any amount at or above the minimum required amount. Interest is charged on the remaining balance.Retail storesFinancial institutions that issue credit cards

How Much Can You Afford? (20-10 Rule)

Never borrow more than 20% of your yearly net income

If you earn $400 a month after taxes, then your net income in one year is:12 x $400 = $4,800

Calculate 20% of your annual net income to find your safe debt load.$4,800 x 20% = $960

So, you should never have more than $960 of debt outstanding.

How Much Can You Afford? (20-10 Rule)

Monthly payments shouldn’t exceed 10% of your monthly net income

If your take-home pay is $400 a month:$400 x 10% = $40

Your total monthly debt payments shouldn’t total more than $40 per month.

Note: Housing payments (i.e., mortgage payments) should not be counted as part of the 10%, but other debt should be included, such as car loans, student loans and credit cards.