market for labour
DESCRIPTION
No involuntary Unemployment. MARKET FOR LABOUR. LABOUR MARKET IN EQUILIBRIUM. S L. 0Q = Actual employment. Q-QF = Voluntary Unemployment. W. D L. 0. Q F. Q. Actual employment. Voluntary Unemployment. W. W. MARKET FOR LABOUR. LABOUR MARKET IN DISEQUILIBRIUM. S L. - PowerPoint PPT PresentationTRANSCRIPT
MARKET FOR LABOURLABOUR MARKET IN EQUILIBRIUM
SL
DL
W
Q QFActual employment
0
Voluntary
Unemployment
0Q = Actual employment
Q-QF = Voluntary Unemployment
No involuntary Unemployment
MARKET FOR LABOURLABOUR MARKET IN DISEQUILIBRIUM
SL
DL
W
QD QFActual employment
0
Voluntary
Unemployment
QS
Involuntary unemployment
W
MARKET FOR LABOURLABOUR MARKET IN DISEQUILIBRIUM
SL
DL
W
QS QF
SHORTAGE
0
Voluntary
Unemployment
QD
W
INSTITUITIONAL & SOCIAL CONSTRAINTS• Labour markets like other markets will
tend to return to equilibrium’• However, this does not happen because of
barriers put in the Market place.• These barriers could be either placed by
GOVERNMENT regulations like:1) Minimum Wages or2) Regulations regarding workplace safety3) LABOUR UNIONS: They tend to pressure the
wages to remain at higher levels. These wages are known as ‘STICKY WAGES’ as they are not allowed to fall below when the market forces require it to.