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The Labour Market - Coggle Diagram

- - - - Why is it shaped like this
        
        Diminishing marginal returns... as more worker come in they bring less and less revenue
    - - Why is it shaped like this
        
        In long run all factors of production are variable... threfore there is now a substitutable nature between labour and capital
  - - - Many jobs in rw are not individual but are teamwork based
      - TU :tangerine:
      - Difficult in jobs such as teaching to measure productivity...
      - self employed... pay above their MRP as have different objectives to big firms
      - MRP suggest suggests that firms will only demand workers if the MRP is at least equal to wage rate, however...
- - - - Income Effect - Incomes rise as wages rise... incentive to work rises... but at Q2 hours fall as the worker has reached their target wage
      - Substitution Effect - Opportunity cost of leisure time increases as wages rise... providing a continued incentive to work
  - - - Income Effect is always positive
      - Substitution Effect is always positive
- - - - Part Time
      - Immigrants
      - Young
  - - - Exploitation of workers (especially vulnerable workers).... no economic rent therefore they have lower incomes and standard of life despite having the same MRP as another worker earning a higher wage
      - reduces wages for all worker in a profession... even for non discriminated... as higher wages on offer for those in certain groups attracts more of those workers, increasing s, and reducing their wages
    - - Increases the costs for businesses... admin for this is large... net result could be lower
      - Potential Strikes... if they find out
    - - Increases income inequality moving Gini coefficient towards 1... government must then intervene
  - - - Discrimination through professions employers deem fit only for meant and not women or vice versa
      - Total refusal by an employer to promote women or any other group to positions of seniority
      - total refusal for an employer to take on workers from the discriminated against group
    - - Reduces C of P... in theory
      - Purely Predudice
      - Potential information failure... outdated information could lead to outdated decisions
    - - Workers
        
        lower wages and potentially unemployment/underemployment
        
        non discriminated workers will benefit in the SR from higher wages... but in the LR weak Econ performance and they will suffer too
      - Employers
        
        Net loss... as they will loose out on talent from discrimination
      - Economy
        
        Economy will operate below its capacity which will Hamer growth... will almost certainly lead to a brain drain
        
        Increase income inequality
- - - - Income earned above the minimum level a worker is willing to work for... total - transfer earnings
    - - Minimum income required for a worker to remain in a certain profession... if it drops below that level then workers will switch profession
  - - - Infinite suppliers of labour and many hirers of workers
      - All workers are homogenous and firms are wage takers... therefore MC and AC is equal to the wage
      - No barriers to entry or exit
      - Perfect knowledge and perfect mobility of labour
      - Firms are Profit Maximisers
    - - Its gained from the market
- - - - Wage and employment rise