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LABOUR MARKET
ECONOMICS

LABOUR MARKET

Labour can be defined as all human efforts of any kind, either skilled or unskilled, mental or manual, directed towards the production of goods and services.

Market on the other hand is defined as a place or any means of communication whereby the sellers and buyers can communicate with one another, to exchange goods and services at prices determined by the market forces.

Labour market is defined therefore as a market in which buyers and sellers of labour are in close contact during which the wages and other conditions of services are determined and agreed upon. Labour is the factor of production which is usually bought and sold in the market.

 

THE CONCEPT OF LABOUR FORCE

Labour force can be defined as the total number of persons available to supply the labour for the production of economic goods and services. In other words, it is the total number of people of working age in a country who are able and willing by law to work. It is the active or working population and it comprises all persons who have jobs and those who are seeking for jobs in the labour market. They are normally found between the age bracket of 18 to 65 years. Working population varies from one country to another.

To be a member of the labour force, one must be of a working age (18 – 65 years), be able-bodied i.e. not handicapped either mentally or physically, and must be willing to work.

Persons that are not members of the labour force include:

  • Children of school age (0-17 years)
  • The elderly (above 65 years)
  • The handicapped (either physical or mental).
  • Persons even though they are able-bodied but are unwilling to work.

 

FACTORS AFFECTING THE SIZE OF LABOUR FORCE

  1. Size of population of a country: The larger the population, the greater the number of labour to be supplied.
  2. Official school leaving age: If the school leaving age is low, the proportion of labour force will be high.
  3. Retirement age: The age of exit in public employment will determine the labour force. The older the age the more the supply of labour and vice versa.
  4. Pursuit of higher education: Many people in their pursuit of higher education, go beyond the official entry age into the labour force.
  5. Age structure of the population: The structure of a country’s population isa significant determinant of the size of the labour force. The lower the dependant people, the higher the supply of labour and vice versa. In other words, the labour force will increase in a country with a greater number of its people between the ages of 18 and 65 years.
  6. Role of women in the society: In some societies, women are usually prevented from engaging in gainful employment because of religious belief, social and cultural factors and this affects the size of labour force.
  7. Number of working hours and working days: The number of working hours per day and the number of working days in a week or a year also helps to determine the supply of labour.
  8. The number of disabled: When the number of disabled persons is high especially within the working population, the supply for labour will be low.
  9. The number of people unwilling to work: There are certain number of able-bodied people who are also between the age bracket of 18 and 65 years but are unwilling to work. If their population is high, it will affect the size of supply of labour.
  10. Migration: The rate of migration can also affect the size of labour force. If the rate at which the working population leaves a country is higher than the rate at which people come in, it will lead to reduction in the supply of labour.
  11. Trade union activities: The activities of trade union may also affect the supply of supply. For example, when a long period of training is imposed on a certain trade, this may discourage people from engaging in such trade or profession leading to a reduction in supply of labour.
  12. Government policies: Certain government policies can affect the supply of labour. e.g. specific laws are made to exclude children and women from working in ministries. This can reduce the supply of labour to that area or field.

 

EFFICIENCY OF LABOUR

Efficiency of labour may be defined as the ability of labour to increase output without increasing the quantity of labour. Increase in efficiency is usually expressed in terms of increase in output of labour within a shorter period of time without any fall in the quality of goods and services produced. If labour is efficient, the quality of goods and services produced will be high.

 

FACTORS AFFECTING EFFICIENCY OF LABOUR OR WAYS BY WHICH EFFICIENCY OF LABOUR CAN BE IMPROVED

  1. Education and training: The level of education and training received by a worker will go a long way towards increasing the efficiency of labour. A well educated or well trained worker is in position to increase efficiency in his work.
  2. Level of technology: High technology will increase the efficiency of labour.
  3. Efficient management: When efficient management is in place in any organisation, it will go a long way towards improving efficiency of labour.
  4. Personal skill of the worker: If a worker possesses a natural skill of doing a particular job, his work becomes efficient.
  5. Attractive wages: When the salary or wage of a worker is attractive, it will boost or promote the efficiency of the worker.
  6. Weather condition: The physical or weather conditions in a work place can affect the efficiency of labour. Hot weather lowers efficiency of labour, cool weather or environment increases efficiency of labour.
  7. State of health of worker: A healthy worker is more likely tobe more efficient than a worker who is a sickler.
  8. Efficiency of other factors of production: The efficiency of other factors of production like land, capital and entrepreneur when combined with efficient labour will increase productivity.
  9. Intelligence of the workers: Some workers are highly intelligent, while others are not. Highly intelligent workers rarely make mistakes.
  10. Conditions of service: An improved condition of service like the availability of transport allowance, bonuses, overtime, etc. will help boost efficiency of labour.
  11. Application of division of labour: The application of division of labour and specialisation in any organisation can result in the efficiency of labour.
  12. Level of commitment and attitude: The level of commitment and attitude of a worker can affect the efficiency of labour. When a worker is highly committed to his job, this will result in efficiency of labour.
  13. Security of job: Efficiency of labour can be increased if a worker is sure that his job is secured.
  14. Promotion: Frequent promotions of workers in any organisation can lead to increase in efficiency of labour.

 

MOBILITY OF LABOUR

Mobility of labour may be defined as the ease with which labour can move from one geographical area to another, or from one occupation to another. Labour is said to be mobile when workers will find it easy to move from one geographical area to another or to change jobs.

 

TYPES OF MOBILITY OF LABOUR

There are two major types of mobility of labour. Which are:

1) Geographical mobility of labour: Geographical mobility of labour refers to the ease with which workers or labour can move from one geographical location to another in pursuing the same occupation or changing occupations.

When a worker moves from one town to another, e.g. from Portharcourt to Jos, without changing the job he is doing, we say that he has moved geographically. An accountant in Portharcourt may move to Jos to continue to work as an accountant. Take note that it is the movement of labour of worker from one area (e.g. Portharcourt) to another area (e.g. Jos), that is called geographical mobility of labour.

 

Factors affecting geographical mobility of labour

  • Cost of transportation: A worker may be able to move from one location to another if the cost of transportation is low. But when it is high, movement becomes difficult.
  • Accommodation problems: Workers may not be able to move to new location where there’s accommodation problems.
  • Climatic conditions: Members may move from where climatic conditions are unfavorable to areas where there are favourable climatic conditions.
  • Family and cultural ties: Members of a family or culture may find it difficult to move from one location to another because of strong family or cultural ties.
  • Government Policies: Certain government policies, e.g. the establishment of National Youth Service Corps (N.Y.S.C.), help to deliberately move labour to different states other than their states of origin.
  • Social and economic infrastructures: The availability of social and economic infrastructures, e.g. electricity, pipe borne water and telecommunication do encourage labour to move to places where these infrastructures are available.
  • Discrimination: Labour may not be able to move if there is the possibility of discrimination against them in their destination.
  • Language barrier: When labour finds it difficult to speak the language of a particular area, it becomes very difficult for them to move to such area.

 

2) Occupational mobility of labour

Occupational mobility of labour refers to the ease with which a worker or labour moves from one occupation or job to another. When a musician becomes a footballer, he has changed his occupation.

 

Factors affecting or obstacles to mobility of labour

  • Cost and length of training: Some professions are costly to train in in terms of time and money, e.g. the medical profession.
  • Ability or aptitude: Some jobs require natural ability or talents and those that are not gifted can not fit into such jobs e.g. musician.
  • Employment prospect/age: After a certain age (e.g. 45 years) employers will not engage such people. They have poor prospects for an employer as they only have short working life.
  • Trade union/professional association restrictions: Some professional bodies (e.g. accounting, law) require certain qualifications before admission.
  • Personal reasons: Personal preference for a particular job and dislike for available alternatives may discourage movements.
  • Families and friendly ties: Friendly ties at times make it difficult for some people to change jobs. Also, some families are known to be associated with certain profession, and it will become difficult for a family member to pull out of that profession.
  • Political instability / religion: When there is political instability or religious crises, it will be very difficult for labour to move.
  • Wage rate: Labour will move if there is a wide margin in salaries but if it is low, labour may not move.
  • Condition of service: Apart from salary, the conditions of service in a working places e.g. bonuses, overtime, staff bus and car and housing loan when present, will encourage labour not to move.
  • Discrimination: There may be discrimination of sex, colour, age and religion. This can affect occupational mobility of labour.
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