2.7 labour market Flashcards
what is a labour market
consists of the supply of labour from households and the demand for labour from firms
the interaction of these will give the price for labour which is wages
what is the role of the labour market
to enable workers who are will and able to sell their labour to meet employer who are willing to give them a job
what might prevent the perfect operation of the labour market
lack of skills
unwillingness to relocate
personal factor
lack of information about available jobs
what main labour markets exist
local
national
international
what smaller interacting markets exist within each labour market
qualifications
skills
geographical locations
what information exchange do labour markets rely on
wage rates
conditions and employment
level of competition
location of job
what is the demand for labour
a derived demand as it depends on the demand for a product that the labour helps to produce
if consumers want more of a product firms will demand for more labour
what factor affects the demand for labour
the state of the economy, more labour = economy grows
demand for goods
wage rates
productivity of labour
profitable firms - likely to expand so need more workers
what is gross pay
the amount of money an employee earn before any deductions are made
what is net pay
the actual amount of money an employee has to spend or safe after deductions
these deductions could be : tax, insurance, pension contribution
how do we calculate gross and net pay
gross = base pay + any extra bonus payments
net = gross pay - any deductions
is the supply of labour elastic or inelastic
both
inelastic because there could be limited amount of people able to fulfil the role therefore employers are willing to pay more
job that don’t need any qualification or are low skilled will be elastic
