Question

Why might the decline in labor market dynamism by even larger than it appears?

Why are fluid labor markets important to younger workers?

Answer 1

Labour Market Dynamism: -

Labour Market Dynamism basically refers to the variety of labour force available in a country over a period of time. Over the years, the labour force has evolved and has been able to define more roles than ever. The labour force previously was very case basis and was hired to fulfil the needs without giving due importance to aspects such as departmentalization and division of labour force.

With evolution of streams such as Human Resource, Finance, Marketing, Manufacturing etc, roles became less dynamic in nature and more focussed towards increasing the overall efficiency of people. Processes such as those implemented by Ford Motor Company involved selecting the best man to perform a job and sticking up to that.

This largely transgressed into job descriptions and having specialized people working across different departments and different sectors across the globe.

Due to this increasing trend of specialization of the work force, therefore the labour market dynamism has declined and people are specialized in their work fields without much scope of any movement from the same. Even when there may be additional developments in the division itself the overall dynamism will decrease.

For example, a data analyst may acquire more skills at his work and become a manager or have more technologies to learn, yet the dynamism is limited to the role that person presently is in.

Importance of Fluid Labour Markets: -

Fluidity in Labour Markets indicates that people are able to change their job roles relatively faster and there are sufficient jobs available in the market place.

For young individuals, they are at the start of their learning curve in which they acquire more skill over the years. It is important for them that their skills do not turn up to become redundant but can rather evolve over a period of time, giving them the ability to earn more money for themselves.

Therefore, this highlights the importance of fluid labour markets respectively.

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