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Chapter 22 & 23: The labour market - Coggle Diagram
Chapter 22 & 23: The labour market
Definitions
Wage rate
: The amount of money paid to workers for their services over a period of time.
Derived Demand
: Demand that arises because there is demand for another good.
Labour Mobility
: Ease with each workers can move geographically and occupationally between different jobs
Trade Unions
: Organisation representing people working in a particular industry or profession that protects their rights
Disputes
: Disagreement between two groups of people. Usually between workers and their employers in which the workers take action to protest.
Secondary picketing
: Workers in one workplace or company strike in a group at a particular location in order to support the striking workers in a different workplace or company.
Labour
: People used in production
Demand For Labour
Demand curve for labour
The price of labour is wage rate.
The wage rate and demand for labour are inversely related, so when wage rate increases, demand for workers decreases. If wage rate falls, demand is increased.
Factors affecting the demand for labour
Demand for labour
is said to be a derived demand. This means that demand arises due to the demand for another type of good.
AI
: As technology advances, more AIs and robots would be used in firms to reduce costs and improve efficiency and output. Therefore, demand for labour would decrease if more firms believe that machines are a better substitute for labour. However, the demand for labour can also increase as people might apply for software, coding engineers to cope with the rise of technology.
Productivity
If every worker is very motivated and productive, output is increased and more output would mean the firm becomes more profitable, thus increasing demand for labour.
Employment Costs
Most firms have to pay for different costs for the workers for example: Insurance costs, medical costs, training costs, meals, holiday pay etc. All these costs can affect the demand for labour.
Supply For Labour
Supply curve for labour
More people are willing to work if the wage rate is high. The relationship between supply and wage rate is proportionately related, so if wage rate increases, so does supply and vice versa.
Factors affecting supply of labour
Population size
As the population size grows, more people would be available to work over time, increasing the supply of labour.
Migration
Many countries open up their country and welcome immigrants to work which increases the working population, and increasing supply of labour
Age distribution of the population
Most of the developed countries have an aging population, which means that people over the retirement age of the total population is increasing.
Retirement Age
School leaving Age
When students reach a certain age, they are allowed to leave school for work. The lower the school leaving age, the higher the supply of labour. In HK, the legal school leaving age is 18
Female Participation
In some countries, gender roles have a huge influence in labour: Women are not allowed to work and receive quality education which heavily affects the demand of labour. However, over the past 50 years, more women are now allowed to work, increasing the working population
Skills and Qualification
If workers are more skilled and employable, supply of labour will increase.
Labour mobility
If the workplace is in a good geographical position for the workers meaning it is close to transport or a place which is easy to get to, supply of labour can increase. If workers become more mobile, supply of labour in a market will increase.
Importance of quantity and quality of labour to businesses
A business setting up their business in a good location is very important. If the location of labour is cheap, the quality of labour will probably be poor and businesses cannot afford to have poor quality of labour.
Impact of Education and Training on the quality of human capital
Quality of labour can be improved through better training courses and education. Training is to provide the workers with skill and knowledge in order to do their jobs effectively.
