3.1.5.4 Labour markets

What is a labour market?

where workers sell their labour and employers buy the labour

Unemployed

able to work but can't find a job

Economic inactive

out of work, not waiting to start a job

What is derived demand?

when demand of one product comes from the demand of another product. ed newspaper and printing ink

Factors that affect supply of labour

education, working age (retirement/school leavers), migration, employment laws, motivation, working condition

Factors that affect demand of labour

demand for g/s, improvements in technology, profitability, market structure, state of economy, productivity of labour

Labour shortage

is excess demand, too much demand for labour but less supply of workers

Labour surplus

is excess supply, unemployment, too much supply of labour but less demand for labour

Economic growth and Labour market

Improvement in economy is higher level of production then increase in labour demand

If national minimum wage is above equilibrium wage rate

excess supply bc more workers want to work, than there are available jobs; unemployment

Wage differential

differences in wage that workers get for their services

Factors that affect wage differentials in jobs

experience, age, qualifications, location, public/private sector, discrimination, gender

Factors that affect wage differentials between jobs

availability of skilled workers, demand for g/s, safety, working conditions, profit of firms, market structure

Gross pay

amount earnt before deductions

Net pay

amount earnt after deductions

Net pay calculations =

Gross pay - deductions