The
highly populated country is the largest supplier of labour, so the major
determinant of supply of labour is considered as population. The
important among them are:
(1)
The working population (All
those people who are able & willing to supply themselves for work.)
(2)
Increase in the real wages
[Real wage is the quantity of goods and service that the money wage can
buy] i.e. wage of an average worker today will buy more goods and services
than before.
(3)
Rise in the number of teenagers
entering to the working population and fall in the number of people retiring.
(4)
Changes in the social attitudes
towards wives and mothers working. (Increase in the number of women
joining the working population. This will tend to increase proportionally when
there is a development in the economy)
The
foundation for the demand for labour is the demand for the product or service
they produce. Since people demand vast varieties of goods and services
there will be demand for wide varieties of labour that is different
occupations. Very low wages (salaries) being paid for some jobs while
others are much higher wages (salaries). When the labour market forces fails to
remove the imperfection, the government
involve through the introduction of a minimum wage.
As
an economy undergoes the process of development there will be changes in the
pattern of demand. These changes will reflect in the demand for goods and
services. These changes in economic sectors will in turn the change the
proportion of people who are working in the primary, secondary and tertiary
sectors. These changes of demand for labour will have its reflection in
the pattern of their earnings.
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