the demand curve for labour shows the quantity of labour that employers would wish to hire at each possible wage rate

derived demand - firms hire workers in order to produce goods to meet their aim. Therefore, the demand for labour is derived from demand for the product the labour produces

• a wage is the price of labour and as it increases, there is less demand for labour

• as it's derived demand, if there is no demand for the product there will be none for labour

• if machinery becomes cheaper, people will switch to it and labour demand will fall

• may kick people out of jobs as they're replaced by computers

• high regulation can discourage firms from hiring

this is the responsiveness of the quantity demanded of labour to the wage rate

the supply of labour curve shows the ability and willingness of people to make themselves available to work at different wage rates

non-monetary benefits e.g free private healthcare

• labour can suffer from either occupational or geographical immobility

• they can suffer from occupational immobility where workers find it difficult to move from one job to another due to a lack of transferable skills

• geographical immobility is where they find it difficult to move from one place to another due to the cost of movement, family, etc

the responsiveness of supply to a change in wage rates

• depends on the level of qualifications and training as if jobs need qualifications people won't be able to vacate them, making supply of labour inelastic

• it can also depend on the availability of suitable labour in other industries

• also depends on time as in the long run supply of labour will be even more elastic as people will have time to train

wage rates differ due to age, education, training, skill, etc

• in a perfectly competitive market, wages are determined purely by demand and supply and all workers are paid the same

• however, in imperfectly competitive markets, wages will not always be set where demand = supply

• retirement age continues to rise as pensioners makeup 50% of welfare spending

• self employed + short term contract workers are increasing and there is uncertainty amongst job security and pay

• may encourage some people to join the industry but can also lead to the loss of the best workers