Question

Define and describe a LABOR MARKET

Answer 1

A labor market is a place where the employers and employee interact with each other. In the labor market, employers compete to hire the best, and the workers compete for the best satisfying job.

The main function of a labor market depends on the demand and supply of labor. The demand side is the firm's demand for labour and the supply is the worker's supply of labor. The supply and demand of labor in the market is influenced by changes in the bargaining power, domestic and international market dynamics, as well as factors such as immigration, the age of the population and education levels. This is one of the major components of any economy. The relationship between supply and demand influences the hours the employee works and compensation she receives in wages, salary and benefits.

There are 2 types of labour market a Tight labor market is one that has more jobs than workers, whereas a Slack labour market is one where the workers are more than the jobs actually available.

There are 4 major factors that affect the labor market, they all determine how the markets hold up and what is needed to keep the employees/ employers happy:

1. Discrimination- Discrimination can affect a labor market if they do not treat their employees with respect and fairly

2. Unions- If workers go on strike, the projects and work would be on a standstill.

3. Unemployment- If the unemployment rate is high it would affect the economy as a whole.

4. Income inequality- If there are same employees with different wages at the same level , they would likely have issues with the working of the company.