The Labour Market

when a factor of production is demanded for its use in producing final goods and services

the amount that firms are willing to pay for a certain amount of workers

the extra goods or sevices one more worker can produce

the extra revenue generated from selling one good or service

marginal physical product x marginal revenue

price of final product, changes in demand for the final product, changes to labour productivity, changes in the price of capital

the law of diminishing marginal returns

the responsiveness of the quantity of demand for labour to a change in the wage rate

%change in QD labour / %change in wage

a change in the wage does not have much impact on the number of workers employed

a change in the wage has a large impact on the number of workers employed

ease of substitution of capital for labour, elasticity of demand for the final product, proportion of labour to total cost, time span

the number of hours or number of workers able and willing to work at a given wage rate

33.8 million

1.4 million people (4.3%)

as wages rise, the opportunity cost of leasure increseses, this causes workers to work longer hours, work is more rewarding relative to leisure

as wages rise, the demand for leisure rises strongly (leisure is a luxury good), this causes workers to work fewer hours so they can enjoy more leisure time

substitution

income

backwards-bending

hourly wage against number of hours worked

raising the minimum wage, cutting the higher rate of income tax

migration, levels of out of work benefits, skill levels, demographic changes (ageing population), cultutral change (role of women)

bonus, pension, overtime, wage level in competing jobs

perks (free lunch/travel), location, colleagues, job satisfaction, security

the responsiveness of the supply of labour to a change in the wage rate

% change in QS / % change in wage

when wages change, the supply of labour changes little

when wages change, the supply of labour changes a lot

qualification and training requirements, vocational nature of the job, labour mobility, time span

workers are homogenous, there are many buyers of labour (firms) and many sellers (workers), workers are mobile, there is perfect information about wages, vacancies

are set at the industry level as firms have no market power

trade unions, monopsony, immobility

an organisation or group of workers that advocate for workers rights

elasticity of demand/supply of labour, productivity of labour force, power of the threat of the strike, agreement for fewer hours rather than fewer jobs

when there is only one major employer of a particular kind of labour

raise, lower

lower, lower

raise, raise

workers that are unwilling or unable to move from one area to another to take up job opportunties

workers that are unwilling or unable to retrain to take up job opportunitites in a different sector of the economy

attachment to family and friends, poor transport links, cost or availability of housing, language or cultural barriers

inadequate access to education or training, poor qualifications from school, attachement to a particular type of work (vocation), lengthy or costly training routes into new professions

6.7%

£10.42

1.18 million (3.6%)

over 1 million

1%

2 million (7%)

60%

66

kickstart and restart scheme

high employment, low unemployment, flexible (easy to hire and fire workers)

sharply rising nominal wages

low productivity growth, high inequality, in-work poverty, insecurity (zero-hours contracts)

labour shortages, falling real wages