In: Economics
Economists would argue that all per-hour wages could be the same for everyone if four conditions are met. Unfortunately none of those conditions are met in reality. Let's assume you are a policy maker that cares that everyone has equal access to wages. Specifically answer this prompt: Pick one of the four main conditions and craft a policy that may help to make the condition apply to reality.
The four conditions:
The demand for every type of labor is the same.
The jobs have no special non-pecuniary aspects.
All labor is ultimately homogeneous, and laborers can be trained at
no cost for different types of employment.
All labor is mobile at zero cost
Include a detailed and accurate application of one or more of
the concepts: labor market demand and supply shifters.
The demand for every type of labor is the same.
Economists divide manufacturing into four categories: land,
labor, and entrepreneurial capital. The labor market differs
slightly from the market in goods and services in terms of labor
demand. Labor is not wanted for its own sake, but rather because it
helps to produce production. Companies identify their labor needs
through a lucrative lens and ultimately strive to produce the best
results and the lowest costs.
The demand for each type of work is not the same because its pay
includes the company going to hire more when the after-work product
of the labor force is greater than the pay and stop when the two
prices are equal. . Where the MRPL (marginal wage income) equals
the prevailing wage rate is equilibrium in the labor market.
Employment Equity: -
To find equilibrium and labor costs in general, economists make
several assumptions:
The marginal product of labor (MPL) is
declining.
The company is an evaluator of the
commodity market (they cannot affect the cost of production) as
well as the labor market (they cannot affect the amount of
wages);
Labor supply is resilient and increases
with wage rates (supply increases slowly); And
Businesses are making the most of their
profits.
MRPL is equal to MPL multiplied by production cost. MRPL stands for
the additional revenue that an enterprise can expect from the use
of one additional workforce - this is a secondary benefit for the
company. According to the above assumptions, the MRPL decreases as
the labor force increases, and firms can increase their profits by
employing additional labor if the MRPL is greater than the cost of
a unit of additional labor, the wage rate. In this way, the company
will rent more when the MRPL is higher than the wage and will stop
hiring as soon as both prices are equal. The point at which the
MRPL equals the prevailing wage rate is the equilibrium in the
labor market.
In competitive markets, the demand curve for labor is like a modest
income curve. Therefore, changes in labor demand are a function of
changes in secondary products of employment. This can happen for a
number of reasons. You can first imagine that a new product or
company is being created that represents a new job search of a
specific type. There are also three main factors that can change
the labor supply curve:
Technology that affects the production of
work units.
Changes in production costs that affect
work unit costs.
Changes in labor costs relate to other
production factors.
In the long run, the supply of labor is a function of the people. A
reduction in the supply of labor will usually lead to an increase
in the wage chart. The fact that reducing supplies usually
increases wages explains why unions and other professional
associations are often hard to determine the number of workers in
their particular industry. For example, physicians have the
financial incentive to rigorously train, license, and certification
requirements to limit the number of practitioners and maintain a
low labor supply.
According to the basic theory of the labor market, there should be
a single wage rate that applies to all workers in industry and the
country. Of course, this is not so. Doctors typically make more
money per hour than retail workers, and workers in the United
States typically earn higher wages than Indian workers. These wage
differentials are called compensatory differentials and can be
explained by factors such as worker skills, countries, or
geographical areas in which jobs are created or job
characteristics.
There are also a number of important factors that influence, e.g.
Geographical differential education, differential compensation,
discrimination and reimbursement, and differential compensation.
However, the reality of the alliance is more complex. As an
organized organization, trade unions also play a role in politics.
They can lobby for legislation that will affect not only the labor
market, but also the goods they produce. For example, unions may
support trade restrictions to protect their markets from foreign
competition. By not allowing local businesses to compete with
unrestricted foreign companies, they can ensure that consumers have
no other option for lower costs, which will drive higher-paid union
workers.