Chapter 9 Labor markets
Chapter 9 Labor Markets
9.1 THE ECONOMIC IMPROTANCE OF LABOR MARKETS Competitive labor market where the forces of demand and supply interact to determine wage rates and employment o Labor market channel in the economy through which supplies of essential labor are obtained by firms at acceptable prices and through which the population obtains most of its livelihood by selling its labor at offered wages and salaries
9.1 THE ECONOMIC IMPROTANCE OF LABOR MARKETS • Competitive labor market – where the forces of demand and supply interact to determine wage rates and employment. • Labor market – channel in the economy through which supplies of essential labor are obtained by firms at acceptable prices and through which the population obtains most of its livelihood by selling its labor at offered wages and salaries
9.1.1 Input and Living standards Firms: Household hiring of labor in order to achieve supplying labor to achieve desired incomes their objectives or standards of living make choices best choices
9.1.1 Input and Living Standards Firms: hiring of labor in order to achieve their objectives Household: supplying labor to achieve desired incomes or standards of living. make choices best choices
9. 1. 2 The Centrality of Labor exchange value(price) o sharing of power in the economy o distribution of earnings and wealth
9.1.2 The Centrality of Labor • exchange value (price) • sharing of power in the economy • distribution of earnings and wealth
9.1.3 Labor Market as Vehicles for Choices(Employment levels Households Firms Which of their members are to Hours of labor needed seek employment (full-time or Best mix of labor and other part-time) inputs(machinery) What search activity Types of labor needed Which job Hiring and firing Which members are to receive education and training Levels of"on the job"training Search for labor Which member are to do the work of the household Rates of pay Which member are to migrat te Consider Rates of pa The labor market is the Timing key institutional vehicle Costs of education and training which facilitates the Costs of migration and making of these relocation choices
9.1.3 Labor Market as Vehicles for Choices • Households – Which of their members are to seek employment (full-time or part-time) – What search activity – Which job – Which members are to receive education and training – Which member are to do the work of the household – Which member are to migrate • Consider – Rates of pay – Timing – Costs of education and training – Costs of migration and relocation • Firms – Hours of labor needed – Best mix of labor and other inputs (machinery) – Types of labor needed – Hiring and firing – Levels of “on the job” training – Search for labor – Rates of pay •Rates of pay •Employment levels The labor market is the key institutional vehicle which facilitates the making of these choices