Labor… - is a measure of the work done by human beings. - there are macro-economic system theories which have created a concept called human capital , although there are also counter posing macro-economic system theories that think human capital is a contradiction in terms - one of three factors of production. - Human skills creating goods and services - Wage is a basic compensation for labour, and the compensation for labour per period of time is referred to as the wage rate
Factors of Production: <ul><ul><li>Land </li></ul></ul><ul><li>Capital </li></ul><ul><li>Labor </li></ul>Back
Human Capital - is the economic value that is derived from the actual application of knowledge, collaboration, and process-engagement - It is also viewed as a way of defining and categorizing peoples' skills and abilities as used in employment and otherwise contribute to the economy - referring to the skills that workers possess, not necessarily their actual work Back
Employment - is a contract between two parties, one being the employer and the other being the employee - In a commercial setting, the employer conceives of a productive activity, generally with the intention of creating profits, and the employee contributes labor to the enterprise, usually in return for payment of wages. - To the extent that employment or the economic equivalent is not universal, unemployment exists.
Employer - An employer is a person or institution that hires employees or workers. Employers offer wages to the workers in exchange for the worker's labor-power. - Employers include everything from individuals hiring a babysitter to governments and businesses which hire many thousands of employees. In most western societies governments are the largest single employers, but most of the work force is employed in small and medium businesses in the private sector. Back
Employee - An employee contributes labor and expertise to an endeavor. Employees perform the discrete activity of economic production. Of the three factors of production, employees usually provide the labor. - Specifically, an employee is any person hired by an employer to do a specific "job". In most modern economies the term employee refers to a specific defined relationship between an individual and a corporation, which differs from those of customer, or client. Most individuals attain the status of employee after a thorough process of interviews with several departments within a company. Back
Unemployment - a person who is able and willing to work at a prevailing wage rate yet is unable to find a paying job is considered to be unemployed - The unemployment rate is the number of unemployed workers divided by the total civilian labor force, which includes both the unemployed and those with jobs (all those willing and able to work for pay). - Some of the likely costs of unemployment for society include increased poverty, crime, political instability, mental health problems, and diminished issue in economics. A low rate of unemployment is a good thing that usually prevents mass poverty and violence.
Unemployment - Benefits for the entire economy arising from unemployment include that it keeps inflation from being high, following the Phillips curve, or from accelerating, following the NAIRU/natural rate of unemployment theory. - There is considerable debate amongst economists as to what the main causes of unemployment are. Keynesian economics emphasizes unemployment resulting from insufficient effective demand for goods and service in the economy. Others point to structural problems inherent in labor markets. Classical or neoclassical economics tends to reject these explanations, and focuses more on rigidities imposed on the labor market from the outside, such as minimum wage laws, taxes, and other regulations that may discourage the hiring of workers.
Unemployment Click here for world unemployment rate - Yet others see unemployment as largely due to voluntary choices by the unemployed. On the other extreme, Marxists see unemployment as a structural fact helping to preserve business profitability and capitalism. The different perspectives may be right in different ways, contributing to our understanding of different types of unemployment.
Phillips Curve - In macroeconomics, the Phillips curve ( PC ) is a supposed inverse relationship between inflation and unemployment. Back
NAIRU - The term NAIRU is an acronym for N on- A ccelerating I nflation R ate of U nemployment. It is a concept in economic theory significant in the interplay of macroeconomics and microeconomics. - If actual unemployment falls below the NAIRU, the inflation rate is likely to rise quickly (accelerate). - The concept arose in the wake of the popularity of the Phillips curve which summarized the observed negative correlation between the rate of unemployment and the rate of inflation (measured as annual nominal wage growth of employees) for a number of industrialised countries with more or less mixed economies. Back
Underemployment - In economics, the term underemployment has at least three different meanings. All three of them involve underutilization of labor that is missed by official definitions and measurements of "unemployment." <ul><li>Underutilization of Skills </li></ul><ul><li>Underuse of Economic Capacity </li></ul><ul><li>Underuse of Employed Workers </li></ul>
Underutilization of Skills <ul><li>In one usage, it describes the employment of workers with high skill levels in low-wage jobs that do not require such abilities. For example, someone with a college degree may be tending bar or driving a cab. Alternatively, a skilled machinist may be working at a fast-food outlet. </li></ul>
<ul><li>- This may result from the existence of unemployment, which makes workers with bills to pay (and responsibilities) take almost any jobs available, even if they do not use their talents. This can also occur with individuals who are being discriminated against, lack appropriate trade certification or academic degrees (such as a high school or college diploma), or have served time in jail. Some types of skills -- such as those associated with doctorates in literature or philosophy -- are valued very poorly by the marketplace, so that people often end up taking jobs that do not employ their education. </li></ul>
Underuse of Economic Capacity Back <ul><li>The term can also be applied by regional planners to describe localities where economic activity rates are unusually low . This can be induced by a lack of job opportunities, training opportunities, or services such as childcare and public transportation. </li></ul><ul><li>Such difficulties may lead residents to accept economic inactivity rather than register as unemployed or actively seek jobs because their prospects for regular employment appear so bleak. </li></ul>
Underuse of Employed Workers Back <ul><li>The third definition of "underemployment" describes a polar opposite phenomenon: to some economists, the term refers to " overstaffing " or " hidden unemployment ," the practice of businesses or entire economies employing workers who are not fully occupied i.e. who are currently not being used to produce goods or services. This may be because of legal or social restrictions on firing and lay-offs or because they are overhead workers, or because the work is highly seasonal. </li></ul><ul><li>- </li></ul>