Lecture 10- Labour economics

Labour is demand (occurs when demand for is from demand for ). Demand for labour is from demand for final

An employee’s remuneration is they get. Large part of this in many circumstances is their but it may also include

Efficiency wage theory suggests that it may be for managers to pay than market wage because of consequent &

Real wages are adjusted for . They show of earnings

Marginal value product- Value of extra of extra

Reservation wage- amount that an would require to job

Geographical immobility occurs when employees move between to accept job

Migration refers to flow of people & of country. Immigration means people are into country. Emigration means they are country. Net migration means that more people are country than are

Demand for will be linked to demand for . Demand for is derived from demand for you are producing: labour is ‘’. Higher the demand for your & the more are willing to pay for product, the higher the demand for in general is likely to be, & this is likely to pull up &

Another factor that influences your demand for labour is how employees are. If employees are then they produce , & this output can be sold. This means that you are likely to be willing & able to pay them

In rational world you will employ people up to point where value of extra produced by one person (known as value of ) is equal to extra of employing that person. This is marginal condition of employment for employer

Productivity is key element in likely earnings of & of business. As manager, you will want to examine every stage of operational process to look for ways of helping to become more . is potentially win–win situation (business can earn more, & so can employees)

Managers will want to improve because this can help to unit costs. Increasing may be achieved in several ways which include changes to , changes to , of staff &

of employees in market will depend on conditions as well as

Supply of labour- Number of people who are & to work in particular at given ). It will depend on range of factors such as amount of required, involved, relevant numbers in , ease of & of job

Reservation wage depend on many factors, such as of job, conditions, of work & an individual’s circumstances

Labour market is made up of of markets. & of labour in given region is from those in another region; & for one type of job is from those for another type. In any particular market level may be determined by market forces of &

If demand for labour , this leads to wage; demand pulls wage level. If demand for labour , this leads to wage; demand pulls wage level

If supply of labour to market , this number of people available & wages are pushed . If supply of labour to market , this number of people available & wages are pushed

An in demand for labour may be caused by demand for final product. This leads to equilibrium wage & higher of labour. A in demand for labour may be caused by demand for final product. This leads to equilibrium wage & quantity of labour

An in supply of labour may be caused by . This leads to equilibrium wage & quantity of labour. A in supply of labour may be caused by . This leads to equilibrium wage & quantity of labour

In some markets there may be one main ‘’ of particular type of . If there is one of labour, this is known as ‘’. is likely to drive wages & employ people than well functioning market would

Market conditions may lead to that brings about in particular labour market, but which society feels is too . This desire to see employees earn ‘ amount’ led to government introducing in 1999. There is now for those aged 25 & over

Argument against minimum wages is minimum wage is amount an employee can be
legally . If this is set market wage it could lead to supply. At wage, quantity demanded & quantity supplied (compared to equilibrium wage & output). Impact of minimum wage would be that number of people employed compared to but wage rate they receive is

Argument for minimum wages is benefits as there would be increasing as workers have more (workers on lower have propensity to consume). Also, there would be an increase in to work (people may come off ). In addition, productivity may & welfare effect for lower paid

Trade unions exist to represent & protect their . By being part of union, have more in negotiations because they are acting as , rather than . This means they might be able to wages

Trade unions may also to force managers to same number of employees that would occur in market but insist on wage than market suggests. Trade unions may also counteract of big employers. Also, it protects

Remuneration of employees is important to attract the right & of staff. Employee’s are also significant of business & must be monitored & assessed to ensure is worthwhile. that individuals receive will usually be affected by & conditions in relevant labour market. Low pay may be associated with levels of demand &/or levels of supply. High pay is likely to be associated with supply &/or levels of demand