Define Segmented Market
Segmented market exists when there are different skills and employment requirements
Define derived demand
Demand that is the result of the demand for another good
Define wage rate
Payment for labour per hour, per week or per month
Define Labour conventions
Labour standards developed by the international labour organisation
Define Collective bargaining
When workers negotiate as a group with employers with regard to working conditions
Define bargaining councils
Group of representatives from the major unions and employer groups within each sector
What is the labour force participation rate
The formula used to express the percentage of the population that is presenting itself for work and that is earning a wage
What is Mediation
A negotiation to resolve differences that is conducted by an impartial party
What is Conciliation
Bringing parties together and getting them to agree on a certain course of action
What is Arbitration
The hearing and determination of a dispute by an impartial referee
What is Equality
Refers to all people receiving the same fair treatment
What is a labour market (6)
A market where labour is traded
A factor market
Is people-orientated
Only trades working terms
Income of people is determined by the jobs done
Supply and demand within the labour market determines what wages are paid
What are the 7 differences between the labour market and goods market
- Workers usually have to be physically present when their services are used. Factors such as location of employment are more important in labour markets
- Labour services are not transferable.
Goods are transferable - Labour is always rented rather than sold.
- Labour markets are characterised by trade unions, employee’s associations, collective bargaining and government intervention.
- Labour is usually employed by long term contracts.
- Labour is heterogenous it cannot be classified or standardised.
- The payment of labour does not only consist of wages.
What are the 2 determinants of the Demand for Labour
- Performance of the economy
- Productivity of Labour
What are the characteristics of the performance of the economy as a determinant of demand for labour (3)
- If the economy grows, more goods and services are sold, thus more labour is employed
- If the economy is in recession, fewer goods and services are sold and less labour is employed.
- In a recovery phase, the opposite of number 2 occurs
What are the characteristics of labour productivity (3)
- Productivity is the relationship between real output and the quantity of input used to produce that output
- Productivity is, therefore a measure of input efficiency
- Labour productivity is the number of units of output obtained from a unit of labour input
What is the productivity calculation
Productivity = Increase in output / Increase in input x 100
Define the basis of an increase of demand for labour
When the economy is growing, more workers are employed
Define the basis of an increase of supply of labour
Within the economy, more people will give up their leisure time and work if wages are higher
What are the 3 factors that affect supply of labour
- Population growth rate
- Labour Force participation rate
- Skills and other competencies
How does ‘skills and other competencies’ influence the supply of labour
All the workers in the aggregate labour supply may not have the skills and other competencies required.
What are wage rates determined by
The demand and supply of labour
What is market failure (2)
- If unemployment is in excess of its natural level
- Labour market failures are shortages of skilled labour, workers that are in jobs that they are not best suited for, lack of training, and wages that are above or below their equilibrium levels
What are the 8 reasons for market failure in the labour market
- Immobility of labour
- Oligopoly Employers
- Trade Unions
- Market inflexibility
- Lack of information
- Attachment between workers and employers
- Lack of training
- Discrimination
