what are two examples of events/variables that could shift the demand for labor, and why they...

what are two examples of events/variables that could shift the demand for labor, and why they could shift it.

Expert Solution

There are several explanations for changes in the demand curve for labor. One main explanation for this is that labor demand is dependent on the demand for the product or service being generated. Of example, the greater the demand for new cars from customers, the higher the number of employee manufacturers would have to recruit. But labor demand is considered a "derived demand." As demand for the goods and services rises, labor demand may increase or change to the right to meet the output requirements of employers. When demand for the goods and services declines, labor demand declines or moves to the left.

Demand for output- As demand for the good produced (production) increases, both the price of the production and the profitability increases. As a result, producers are seeking more labor to raise production.

Education and Training- A well-trained and educated workforce is causing an rise in employers' demand for that labor. Increased productivity rates within the workforce would cause labor demand to move to the right. When the workforce isn't well-trained or skilled, employers won't recruit the workforce from within the labor pool, because they would need to spend a considerable amount of time and money training. Demand for that will be moving to the left.

Technology- Changes in technology may either be a replacement for or a complement to labor. When technology works as a substitute it removes the need to recruit the number of employees an employer wants. For instance, word processing reduced the number of typists needed at the workplace. That left the demand curve for typists changed. Increasing the availability of such technologies can increase employment demand. Innovation that serves as a supplement to labor would raise demand for other forms of labour, resulting in the demand curve being moved to the right.

Rahul Sunny answered 6 months ago

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