Summary Theme 2: Incoming Mr. van der Graaf Rijnlands Lyceum Sassenheim
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Course
Economics
Level
VWO / Gymnasium
A very detailed summary (including pictures, learning objectives, keywords, etc. of 5 pages and 2000+ words) of reader 2: Incoming of the booklet delivered by Mr. van der Graaf to 3TTO at the Rheinlands Lyceum Sassenheim.
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People need to make choices, because they have unlimited needs but limited means (time &
money). By making choices, or setting priorities, they can satisfy the most important needs.
Civilizations have invented money to use as a means of exchange for trading.
Not every person is able to earn an income
o We need to make choices on how to provide an acceptable level of prosperity for every
member of our society.
How to earn an income?
Types of income
There are various ways to earn an income
The income of individual people can be divided into three categories
1. Income from employment
By working for a company or the government you receive a salary of wage.
2. Income from assets (bezit)
By owning a house, having savings or shares(aandelen) you can receive rent (huur),
interest(rente) or profit(winst).
3. Transfer income
This is income from the government or your parents. Think of social benefits
(uitkeringen) or pocket money.
The income from employment is normally called a wage or salary.
o With some jobs, it is not a fixed amount but it is based on performance, this is then
called a commission or royalties.
Having shares means that you own a part of a company, you earn money if the company makes
profit. The share of the profit is called dividend.
Transfer income where you have done nothing for
o People who cannot earn an income for themselves receive a social benefit.
o Parents receive child benefits as a compensation for raising children.
Working as a teenager
Many teens have a side job so they can afford doing fun things or to save money for later.
It also learns to deal with a boss, colleagues or customers.
There are rules about what a teenagers should earn as a minimum.
Different sectors of work have different workweek hours.
o In the health care is less than working in the supermarket.
, Gross wage = Wage before tax and social premium deductions
Net wage = Wage after tax and social premium deductions (This is what you receive)
You employer pays taxes and premiums to the government on your behalf, before you receive
your net salary in your bank account.
As a teenager your salary is exempt from paying taxes.
As a teenager, you may not perform every type of work at every time of the day.
Minimum wage, CLA (CAO) and individual employment agreement
The wage that an employee receives is determined by how much the employer is willing to pay
that person.
Most teenagers and people who perform uneducated jobs are paid the minimum wage.
o The minimum wage is determined by the government.
Most people however, receive a salary that is higher than the minimum wage.
To avoid that every employer would have to negotiate with all of its employees, many industries
use a Collective Labor Agreement (CLA)
Collective Labor Agreement (CLA) = Written agreement between employers or employer organizations
and trade unions about employee benefits and labor conditions.
The agreements are valid for all employers and employees that are active in the industry
(transport, health care) or within a big company (Shell, Philips)
The agreements concerns primary and secondary employment conditions
The agreements should e in line with the law
The agreement is ‘binding’. This means that in every industry, employers are obliged to respect
all conditions. These can provide more positive, but not more negative conditions to their
workers.
Primary employment conditions = Regulations about working times and the money that is paid to
workers.
Working times, amount of holidays, salary, etc.
Primary employment conditions = Regulations about extra benefits on top of the primary conditions
Regulations about education, working from home, travel allowance, a company car, phone, computer,
etc.
CLA’s are often only valid for one or two years, after which labor unions and representatives of
the employers have to negotiate a new agreement.
What an employee really earns and what benefits he receives is written in an individual
employment agreement, which can be more advantageous than a CLA.
The better the employee can distinguish him/herself from other candidates and represents
added value to the employer, the higher the salary or other benefits can be.
o This can be changes whenever possible, when both parties agree.
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