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Example 2

Workers gained from the settlement of the industrial dispute. While the number of workers decreased, the total wage bill increased, meaning the average wage was now higher. For management, the increased wage bill was not necessarily a loss if it resulted in greater productivity. The median wage decreased, meaning fewer workers now earned above the previous median. The standard deviation decreased as well, showing wages were more uniformly distributed and had less inequality after the dispute. The distribution also shifted from negatively to positively skewed, suggesting more workers now earned lower wages while fewer earned higher wages, despite the overall increase in wages.

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Yvonne Njoroge
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157 views

Example 2

Workers gained from the settlement of the industrial dispute. While the number of workers decreased, the total wage bill increased, meaning the average wage was now higher. For management, the increased wage bill was not necessarily a loss if it resulted in greater productivity. The median wage decreased, meaning fewer workers now earned above the previous median. The standard deviation decreased as well, showing wages were more uniformly distributed and had less inequality after the dispute. The distribution also shifted from negatively to positively skewed, suggesting more workers now earned lower wages while fewer earned higher wages, despite the overall increase in wages.

Uploaded by

Yvonne Njoroge
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Example 2

You are given the position in a company before and after the settlement of an
industrial dispute. Comment on the gains or losses on the point of view of workers
and that of management.
Before After
Number of workers 2400 2350
Mean wage (Us $) 45.5 47.5
Median wage (Us $) 48.0 45.0
Standard Deviation 12.0 10.0

Solution
The following comments can be made based on the information given.
(i) By comparing the total wage bill we can comment on the increase or
decrease in the level of wages;
The total wage bill before the dispute was settled = 2400× 45.5
¿ $ 109,200

The total wage bill after settlement of dispute ¿ 2350 × 47.5

¿ $ 111,625

Hence the total wage bill has gone up after the settlement of the dispute even
though the number of workers has decreased from 2400 to 2350. This means
the average wage is now higher. This is definitely a gain to the workers.
Conversely, we cannot say the increased wage bill is necessarily a loss to the
management because if it results in greater efficiency of workers and, therefore
higher productivity, it would be a positive gain to the management.
(ii) Median before settlement of dispute was 48 and after settlement it is 45.
This means that formerly 50% of the workers used to get wages above
$48 and now they get only above $ 45
(iii) By comparing the Coefficients of Variation (C.V) before and after
settlement of dispute we can comment on the distribution of wages.
σ
C.V before settlement, C.V ¿ X ×100 , σ =12 , X =45.5
12
¿ × 100=26.37
45.5

σ
C.V after settlement, C.V ¿ X ×100 , σ =1 0 , X =47.5
10
¿ × 100=21.05
47 .5
Since the value of C.V has decreased from 26.37 to 21.05 there is
sufficient evidence to conclude that wages are more uniformly
distributed after the settlement of dispute, or, in other words there is
lesser inequality in the distribution of wages after the dispute is settled.
(iv) By comparing skewness we can comment upon the nature of the
distribution of wages.
Coefficient of skewness before settlement of dispute
3 ( X−Median )
Sk p=
σ
3 ( 45.5−48 )
¿
12

= - 0.625
Coefficient of skewness after settlement of dispute
3 ( X−Median )
Sk p=
σ
3 ( 47.5−45 )
¿
10

= + 0.75
Thus the distribution is positively skewed after the dispute whereas it was
negatively skewed before the settlement of dispute. This suggests that the
number of workers getting low wages has increased considerably and that of
workers getting high wages fallen, though the actual wage of workers has
increased

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