Question

consider Domar’s model of labor coercion. He considers the labor markets in the USA and the degree of labor coercion for free white labor and enslaved black labor. Which group(s)’s labor market institutions would he see as puzzling or not? Why?

Answer 1

Greater demand for labor increases coercion because it increases equilibrium effort. We investigate the interaction between outside options, market prices, and other economic variables by embedding the (coercive) principal-agent relationship in a general equilibrium setup, and study when and how labor scarcity encourages coercion. We show that general (market) equilibrium interactions working through prices lead to a positive relationship between labor scarcity and coercion along the lines of ideas suggested by Domar, while those working through outside options lead to a negative relationship similar to ideas advanced in neo-Malthusian historical analyses of the decline of feudalism.

Labor market in the USA:-

Model of labor coercion:-

Labor market include all the means by which workers find jobs and by which employers locate worers to staff their businessess.A nuber of factors influence labor an labormarkets in the US, inclding immigration, discrimination, labor unions, unemployment, and income inequality between the rich and poor.

The US labor force includes people who are at least 16 years old and either woking, waiting to be recalled from alayoff, oractively looking for work within the past 30 days. In 1998 the US labor force included nearly 138 million people, most of them working in full time or part time jobs.

The US labor market is doing quite well. Unemployment is currently around 4%, and real weekly earnings of full-time workers increased from the 2000 cyclical peak to the current period of full employment.he difficulties lie behind the aggregates. Earnings inequality continues to rise, with the growth in earnings concentrated in, although not restricted to, workers in the upper half of the earnings distribution.

White labor :-

White workers have benefited from “historical and systemic educational and economic advantages” that have enabled them to carve out a “disproportionate edge” in the workplace that lasts for decades,

White workers are not only more likely to have a good job than their black but also hold a disproportionate share of good jobs relative to their share of overall employment, while African-Americans are under-represented in good jobs.

White workers have lower under employment rates than black or Hispanic workers at all points in the business cycle. In fact, the peak white underemployment rate in the wake of the Great Recession was only slightly higher than the prerecession low for black underemployment.

The largest ethnic group of construction workers are White, making up 78% of the population.

enslaved black labor:-

Slavery in the United States was the legal institution of human chattel enslavement, primarily of Africans and African Americans, that existed in the United States of America from its founding in 1776 until passage of the Thirteenth Amendment in 1865.

Black slaves played a major, though unwilling and generally unrewarded, role in laying the economic foundations of the United States—especially in the South. Blacks also played a leading role in the development of Southern speech, folklore, music, dancing, and food, blending the cultural traits of their African homelands with those of Europe.

The slave was allowed no stable family life and little privacy. Slaves were prohibited by law from learning to read or write. The meek slave received tokens of favour from the master, and the rebellious slave provoked brutal punishment.

black under employment reached 24.9 percent in April 2011, well after the peak of the black unemployment rate at 16.8 percent in March 2010.

Labor group in puzzing :-

Labor market institutions are usually thought of as policy interventions or collective organizations that interfere with wage and employment determination. Examples include labor unions, legislation on minimum wages and employment protection, unemployment insurance and active labor market policies.

The past couple of decades have seen a huge increase in research on various labor market institutions. This paper offers a brief overview and discussion of research on the labor market impacts of minimum wages (MW), unemployment insurance (UI), and employment protection legislation (EPL).

roughly, 5% of U.S. workers hold multiple jobs; a much larger share have held multiple jobs at some point in the past. Not widely recognized is that rates of MJH differ substantially across regions and labor markets in the United States, differences that have persisted over time

emphasis on results from developing countries. Impacts studied are on living standards (employment and earnings effects), productivity, and social cohesion, to the extent that this has been analyzed. Strong and opposing views are held on the costs and benefits of labor market institutions.

On balance, the results of this review suggest that, in most cases, the impacts of these institutions are smaller than the heat of the debates would suggest. Efficiency effects of labor market regulations and collective bargaining are sometimes found but not always, and the effects can be in either direction and are usually modest. Distributional impacts are clearer, with two effects predominating: an equalizing effect among covered workers but groups such as youth, women, and the less skilled.