Question

What are the Factors shaping the supply and demand for labor, taking into account the specific features of the USA economy.

Answer 1

The most importance features of USA economy are:

1.Limited role of government

2.Freedom of enterprise

3.Freedom of choice

4.Profit motive

5.Competition

6.The right to private property.

Consideeing all these characteristics lets look into the factors shaping supply and demand for labor.

In USA , according to worker's experience,training,education etc, wages and salaries of them vary from occupation to occupation across different region.

Just as good and services, labors are also traded in markets. Higher wages are paid for the occupation where lobors are scarce ie; where there is high demand for labors and low supply of labors. The demand for labors depends upon their work they do. If they create more profit, then the demand for those labors would be high compared to the less productive labors.

Inorder to get good jobs, labors improves their knowledge, skills and education which will give them high wage paying jobs. And this will be more valuable to employers.

In USA, due to technological changes, change in demand for goods and services by the consumers etc,  there is a variety of newly created occupations which make the past occupations outdated.ie; in past Blacksmiths were one of the most skilled workers in USA, but now computer programmes and software developers have great demand in USA.

With the destruction of creative works, many people are unemployedand the decrease of certain products in the product market has led to decrease in the labor market for the production of that product.

USA lays complete freedom to the people to choose their businesses of their own abd this has made them to change from low wage and low demanded occupation to more demanded occupation. The primary motive of USA as a capitalist economy in profit motive. And the supply and demand for labors is entirely depending on this aspect.New technologies, innovations etc came to USA due to the freedom of enterprises and this also have made a change in supply and demand for labors.

These are the factors shaping the supply and demand for labors as per the features of US economy.