Birth and mortality rates, education and skills training (human capital), women's rate of participation in the labour market and ease of migration
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What influences the demand for labour?
Incomes and spending power, aggregate demand, consumer tastes, economic cycles, the price of capital equipment and technological change
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What type of demand is the demand for labour?
Derived demand
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What is derived demand?
It means the demand for labour depends upon the demand for individual products because employers take on more people when their product sells well
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What will wage rates depend on?
The interaction of supply and demand
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How does structural change affect the supply of labour?
Some areas find that demand for their products is falling, thus they will suffer from unemployment and underemployment so their will be an excess supply of labour
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What can an excess supply of labour result in?
Rising unemployment as some people may find their particular skills obsolete. This will lead to long-term unemployment or people having to acquire new skills or go where labour is in demand
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How can rising unemployment be easier to deal with?
If the people affected are occupationally or geographically mobile or have transferable skills
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What is a flexible labour market?
It exists where people are capable of adapting to changing patterns of demand. Employers can take on new employees at wage levels determined by market rates, and can make people redundant when they need to
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What does rising demand for particular products make employers do?
Recruit more people
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What will excess demand for scarce skills cause?
Wages to rise to act as an incentive for more people to enter that workforce and get trained, however this may take time
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How can unskilled people compete with cheaper labour from emerging economies?
By getting as much training as they can
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What does training do for the employee?
It makes people more employable and flexible, and increases their wages
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What does training do for the employer?
It increases productivity, helps businesses to adapt to changing circumstances if they have more flexible employees and can increase profits
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How can skill shortages hamper economic growth?
Economic growth requires rising productivity, people who can find new ways of doing things and cost effective approaches to production, which relies on the availability of skilled people
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How can global competition push up wages?
There is global competition in the global labour market to recruit the best people for the job so firms will increase wages to act as an incentive for the best people to go to them
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What does a recession do for the demand of labour?
Reduces it except for the people with the scarcest skills, those with no skills will have difficulty finding employment
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How may companies reduce costs in order to maintain competitiveness?
Making redundancies, capital investment, lean production to increase productivity and retraining existing employees and not recruiting new ones so number employes fall naturally
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What is the purpose of trade unions?
They act on the behalf of the members to safeguard their interests by negotating pay and ensuring good working conditions
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What are professional bodies?
They protect members like trade unions, but they can restrict the number of people joining the profession
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Why are trade unions important for people who work in big powerful companies?
They can cut costs by saving on pay and conditions so by having a single representative, members can rely on skilled union negotiators that are powerful enough to protect them
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Why are trade unions less important in developed economies?
Employees are protected by the law and regulation
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Why are trade unions important in emerging economies?
They can help prevent seriously unethical business behaviour including exploitation of labour and dangerous working conditions
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How may trade unions and professional bodies constrain competitiveness of the labour market?
They can push pay above a certain level and opposition to new methods can prevent an increase in efficiency that may make businesses more competitive
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Other cards in this set
Card 2
Front
What influences the demand for labour?
Back
Incomes and spending power, aggregate demand, consumer tastes, economic cycles, the price of capital equipment and technological change
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