Labor economics examines the labor market and the behavior of employers and employees. It considers both positive economics, which analyzes actual behavior, and normative economics, which considers how the labor market should work. The key aspects of the labor market are the demand for and supply of labor, which determine employment levels and terms. Unemployment results from various causes including structural mismatches between jobs and skills, frictional transitions between jobs, and insufficient aggregate demand during economic downturns.
This document provides an introduction and overview of labor economics. It discusses key topics including:
- What labor economics studies, including the interaction of workers and employers in labor markets and how this determines wages, employment, and income.
- The microeconomic and macroeconomic techniques used to study labor markets, including individual behavior and interactions between labor markets and other markets.
- The importance of labor economics for understanding socioeconomic issues, its quantitative impact on national income, and unique characteristics of labor.
- How the field has evolved from a more descriptive, historical approach to incorporating applied microeconomic and macroeconomic theory.
introduction to labour economics and personnel economics.abir hossain
Labor economics analyzes labor markets where workers find jobs and employers find workers. It deals with major determinants of personal income and the allocation of the most important production input. Labor economics has microeconomic and macroeconomic dimensions. Microeconomics focuses on supply and demand in labor markets and how they determine wages and employment. Macroeconomics looks at aggregate employment, productivity and income levels. Personnel economics is a subfield that analyzes optimal personnel policies from the employer's perspective, using tools from economics of information to understand recruitment, compensation and incentives. It provides a framework for studying human resource management.
The document discusses different economic systems and factors. It describes the key features of a centrally planned economy, free market economy, and mixed economy. It notes the advantages and disadvantages of each system. It also outlines several important economic factors for governments and businesses, including inflation, unemployment, exchange rates, fiscal policy, and monetary policy. The document provides an overview of different economic models and considerations.
A mixed economy combines characteristics of market, command, and traditional economies. It benefits from the advantages of all three while suffering from few disadvantages. A mixed economy protects private property and allows market forces to determine prices but also allows government intervention to care for vulnerable groups and prioritize certain industries. Successful mixed economies can experience the benefits of efficiency and innovation as well as social protections. However, too much emphasis on any one system can lead to imbalances.
This document provides an overview of the Labor Economics course. It begins by defining labor economics as the study of the labor market, including the supply and demand of labor services by workers and employers. It then discusses some key characteristics that make labor unique compared to other factors of production, such as labor being inseparable from workers and labor services not being transferable or storable. The document also examines the historical development of labor economics and its interrelationships with other fields like microeconomics, macroeconomics, industrial economics, and development economics.
This document discusses compensation strategies and external competitiveness. It defines key terms like pay level, pay mix, labor demand, and labor supply. It explains how companies determine external competitiveness by setting pay levels and mixes relative to competitors. Companies aim to control costs, increase revenues, and attract/retain employees. The document also discusses factors that influence compensation decisions like industry, organization size, and relevant labor markets. It analyzes alternatives for pay level policies and pay mix strategies.
This document provides an overview of key concepts in labor economics. It discusses:
- Labor economics analyzes labor markets using microeconomic and macroeconomic techniques to understand interactions between workers, firms, and the government.
- Microeconomic analysis examines individuals and firms, while macroeconomic analysis looks at interactions between labor markets and other markets and how they influence aggregate outcomes.
- Labor economics is important for understanding socioeconomic issues, the quantitative role of labor in the economy, and unique characteristics of labor markets influenced by factors like unions.
- The field has evolved from a descriptive, historical approach to using applied micro and macroeconomic theories of choice, scarcity, purposeful behavior, and adaptability.
Management involves working with people and resources to achieve organizational goals efficiently. Economics studies how limited resources are allocated given unlimited wants. Managerial economics applies economic concepts to business problems to make rational decisions. It analyzes market structures like perfect competition and monopoly. Inflation and unemployment affect businesses through impacts on costs, demand, and labor markets. Fiscal and monetary policies influence macroeconomic variables.
This document provides an introduction and overview of labor economics. It discusses key topics including:
- What labor economics studies, including the interaction of workers and employers in labor markets and how this determines wages, employment, and income.
- The microeconomic and macroeconomic techniques used to study labor markets, including individual behavior and interactions between labor markets and other markets.
- The importance of labor economics for understanding socioeconomic issues, its quantitative impact on national income, and unique characteristics of labor.
- How the field has evolved from a more descriptive, historical approach to incorporating applied microeconomic and macroeconomic theory.
introduction to labour economics and personnel economics.abir hossain
Labor economics analyzes labor markets where workers find jobs and employers find workers. It deals with major determinants of personal income and the allocation of the most important production input. Labor economics has microeconomic and macroeconomic dimensions. Microeconomics focuses on supply and demand in labor markets and how they determine wages and employment. Macroeconomics looks at aggregate employment, productivity and income levels. Personnel economics is a subfield that analyzes optimal personnel policies from the employer's perspective, using tools from economics of information to understand recruitment, compensation and incentives. It provides a framework for studying human resource management.
The document discusses different economic systems and factors. It describes the key features of a centrally planned economy, free market economy, and mixed economy. It notes the advantages and disadvantages of each system. It also outlines several important economic factors for governments and businesses, including inflation, unemployment, exchange rates, fiscal policy, and monetary policy. The document provides an overview of different economic models and considerations.
A mixed economy combines characteristics of market, command, and traditional economies. It benefits from the advantages of all three while suffering from few disadvantages. A mixed economy protects private property and allows market forces to determine prices but also allows government intervention to care for vulnerable groups and prioritize certain industries. Successful mixed economies can experience the benefits of efficiency and innovation as well as social protections. However, too much emphasis on any one system can lead to imbalances.
This document provides an overview of the Labor Economics course. It begins by defining labor economics as the study of the labor market, including the supply and demand of labor services by workers and employers. It then discusses some key characteristics that make labor unique compared to other factors of production, such as labor being inseparable from workers and labor services not being transferable or storable. The document also examines the historical development of labor economics and its interrelationships with other fields like microeconomics, macroeconomics, industrial economics, and development economics.
This document discusses compensation strategies and external competitiveness. It defines key terms like pay level, pay mix, labor demand, and labor supply. It explains how companies determine external competitiveness by setting pay levels and mixes relative to competitors. Companies aim to control costs, increase revenues, and attract/retain employees. The document also discusses factors that influence compensation decisions like industry, organization size, and relevant labor markets. It analyzes alternatives for pay level policies and pay mix strategies.
This document provides an overview of key concepts in labor economics. It discusses:
- Labor economics analyzes labor markets using microeconomic and macroeconomic techniques to understand interactions between workers, firms, and the government.
- Microeconomic analysis examines individuals and firms, while macroeconomic analysis looks at interactions between labor markets and other markets and how they influence aggregate outcomes.
- Labor economics is important for understanding socioeconomic issues, the quantitative role of labor in the economy, and unique characteristics of labor markets influenced by factors like unions.
- The field has evolved from a descriptive, historical approach to using applied micro and macroeconomic theories of choice, scarcity, purposeful behavior, and adaptability.
Management involves working with people and resources to achieve organizational goals efficiently. Economics studies how limited resources are allocated given unlimited wants. Managerial economics applies economic concepts to business problems to make rational decisions. It analyzes market structures like perfect competition and monopoly. Inflation and unemployment affect businesses through impacts on costs, demand, and labor markets. Fiscal and monetary policies influence macroeconomic variables.
Industrial relations deal with the relationships between employers/workers organizations, the state, and these organizations themselves. It involves managing the relationships between three main actors: workers (represented by trade unions), employers (represented by employer associations), and the government. Key issues in industrial relations include communication, unions, wages/benefits, ideology, competitiveness, employer flexibility, the role of government/unions, ethics, and technology. Effectively managing these issues and the inherent adversarial positions between labor and management is important for productive industrial relations.
The document provides information about getting fully solved MBA assignments from an assignment help service. It details the contact phone number and email address to use to request help with the MBA Semester 1 Managerial Economics assignment, which includes 6 questions on topics like price elasticity, profit maximization, fiscal policy, price discrimination, and the business cycle. Students are instructed to answer all questions, with 10-mark questions being approximately 400 words each.
This document provides an overview of introductory economics concepts. It begins by defining key terms like economics, microeconomics, macroeconomics, and scarcity. It then discusses the basic concepts of supply and demand, explaining the supply-demand curve and factors that can cause shifts in supply and demand. The document also covers price stability, full employment, economic growth, and other basic objectives of economics. It provides examples of inflation and its causes. Overall, the document presents foundational microeconomics concepts.
This document outlines the contents and key concepts from a module on strategic planning and the economic environment. It discusses how a company's revenues and costs are affected by macroeconomic factors. It also covers understanding economic indicators, supply and demand dynamics, unemployment, inflation, and the international economy. Forecasting methods and tools for environmental scanning like PEST and scenario planning are presented to help analyze threats and opportunities in the economic environment. The module aims to help managers interpret economic information and incorporate it into strategic decision-making.
This document discusses the application of economics principles to managerial decision making. It begins by defining managerial economics as the application of microeconomic concepts related to the firm. It then discusses how managers can use economic analysis of demand, production, costs, pricing, and profits to make decisions around resource allocation, production levels, pricing strategies, and capital investment. The document also notes that managers must understand the economic environment and make decisions considering factors like government policy, market conditions, and behaviors of consumers and other economic agents. Overall, the document advocates that studying economics equips managers with analytical tools and perspectives to make more informed business decisions.
This document provides an overview of business economics. It begins by defining economics and introducing some basic concepts. It then discusses the nature of business economics, noting that it is based on microeconomics but also incorporates elements of macroeconomic analysis. It is both a science and an art. The document outlines the scope of business economics, including demand analysis, production/cost analysis, inventory management, market structure/pricing, and more. It also discusses objectives, roles, related disciplines like micro/macroeconomics, economic systems, and applications of economics concepts.
This document provides an overview of economics and key concepts in microeconomics and macroeconomics. It discusses:
1) Economics is concerned with allocating scarce resources to produce goods and services.
2) Microeconomics examines economic decisions at the individual level, like consumers, workers and firms. Macroeconomics looks at aggregate measures like GDP, unemployment, and financial markets.
3) Microeconomics analyzes how consumers, producers and firms reach equilibrium within markets under conditions of scarcity and determined prices. It helps inform both corporate decision making and public policy design.
This document provides an overview of economics and key concepts in microeconomics and macroeconomics. It discusses:
1) Economics is concerned with allocating scarce resources to produce and distribute goods and services.
2) Microeconomics examines economic decisions at the individual level, like consumers, workers and firms, while macroeconomics looks at aggregate quantities like GDP, unemployment and inflation rates.
3) Microeconomics analyzes how prices are determined by supply and demand in markets and how consumers, workers and firms reach equilibrium. It helps inform corporate and government decision-making.
This document provides an introduction and overview of microeconomics. It discusses three key themes:
1) How individuals and firms make optimal trade-offs given constraints like limited incomes, resources, and time. This involves balancing current vs future consumption and work vs leisure.
2) How prices influence the decisions of consumers, workers, and firms regarding which goods to buy/produce and how to allocate resources.
3) The central role of markets in determining prices through the interactions of buyers and sellers and how this affects decisions. Microeconomics aims to explain observed economic behaviors and outcomes using theories and models.
This document discusses factors that affect wages and earnings in the labour market. It provides examples of earnings for different occupations such as computer engineers earning $4,165 and manufacturing labourers earning $1,073. Both wage factors like overtime pay and non-wage factors like job satisfaction and working conditions influence individuals' occupational choices and earnings. The demand and supply of labour determines market wages. Changes in demand, supply, bargaining power, government policies, technology, and public opinion can all impact wages. Differences in earnings may also be due to skills, gender, job risk, economic sector, and whether the job is in the public or private sector. Trade unions can impact wages through collective bargaining but may also cause unemployment or wage inflation.
Week 9_Lec 2 The Economic Rationale of the Modern State.pptxnaseebkhan46
This document discusses the distributive, regulatory, and stabilization roles of government in the economy. It explains that the distribution of wealth and income resulting from free markets may not be considered just by society. Government can redistribute income more comprehensively using taxes and subsidies. The document also discusses government regulation to address issues like imperfect information, consumer protection and externalities. Finally, it describes how governments pursue stabilization policies to help coordinate economic activity and restore equilibrium when markets fail to do so on their own.
The document discusses economics and business economics. Economics is defined as the study of how individuals and groups allocate scarce resources. Business economics applies economic theories and techniques to solve business problems and aid management decision making. It uses micro and macroeconomic approaches to understand issues like demand, costs, profits, and external factors that influence business. The key aspects of business economics are demand forecasting, cost analysis, profit analysis, and capital management. Overall, the document outlines the basic concepts, scope, importance and determinants of demand within the field of business economics.
Industrial relations deals with the relationships between workers, employers, and the government. The key objectives of industrial relations are to avoid disputes between management and labor to increase productivity, ensure fair wages and working conditions for employees, and bring about government oversight of industries. The major issues in industrial relations include communication between parties, the role of unions, wages and benefits, corporate ideology, achieving competitiveness, employer flexibility, the role of government and unions, technology, and the inherent adversarial positions between management and labor. Protected industrial action by employees allows them to strike or protest without legal repercussions if proper procedures are followed, while unprotected industrial action could result in penalties or job termination.
This document discusses compensation and the factors that influence it. Compensation includes both financial compensation like wages and salaries as well as non-financial compensation like benefits and recognition programs. It is determined based on both internal factors like ability to pay, job requirements, and employee performance as well as external factors like cost of living, labor market conditions, government regulations, and technological changes. The goal of compensation is to attract, motivate, and retain qualified employees in a fair and competitive way.
This document discusses wage policy and compensation differentials within and between industries. It begins by defining key concepts like minimum wage, living wage, and fair wage. It then discusses factors that influence wages both externally like labor markets and cost of living, and internally like job evaluation and employee performance. Different wage payment systems like piece rate and time rate are also covered. The document also discusses principles of wage administration, relevant wage laws in India, and recommendations of wage policy committees. It defines compensation and differentiates between direct and indirect compensation. Finally, it discusses reasons for compensation differentials both between industries and within the same industry based on factors like experience, skills, training, work conditions and department.
Itro to Business Economics by Neeraj Bhandari ( Surkhet.Nepal )Neeraj Bhandari
The document provides an overview of business economics, including its meaning, nature, and scope. It discusses key concepts such as decision making, forward planning, the circular flow of income, and the differences between microeconomics and macroeconomics. The summary is:
Business economics applies economic theory and methodology to business decision making and planning. It involves analyzing issues like demand, costs, pricing, profits, and capital management. Business economics uses both positive and normative economic approaches to help businesses optimally solve problems. The circular flow of income model illustrates how income and spending circulate between producers, consumers, and other sectors in a closed economy.
The document discusses the key concepts of economics. It examines how economics analyzes how institutions and technology affect prices and resource allocation, explores financial markets, examines income distribution and policy solutions to help the poor, studies the business cycle and monetary policy, analyzes international trade patterns, looks at development in poor countries, and considers how government policy pursues goals like growth and fairness.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
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Industrial relations deal with the relationships between employers/workers organizations, the state, and these organizations themselves. It involves managing the relationships between three main actors: workers (represented by trade unions), employers (represented by employer associations), and the government. Key issues in industrial relations include communication, unions, wages/benefits, ideology, competitiveness, employer flexibility, the role of government/unions, ethics, and technology. Effectively managing these issues and the inherent adversarial positions between labor and management is important for productive industrial relations.
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This document provides an overview of introductory economics concepts. It begins by defining key terms like economics, microeconomics, macroeconomics, and scarcity. It then discusses the basic concepts of supply and demand, explaining the supply-demand curve and factors that can cause shifts in supply and demand. The document also covers price stability, full employment, economic growth, and other basic objectives of economics. It provides examples of inflation and its causes. Overall, the document presents foundational microeconomics concepts.
This document outlines the contents and key concepts from a module on strategic planning and the economic environment. It discusses how a company's revenues and costs are affected by macroeconomic factors. It also covers understanding economic indicators, supply and demand dynamics, unemployment, inflation, and the international economy. Forecasting methods and tools for environmental scanning like PEST and scenario planning are presented to help analyze threats and opportunities in the economic environment. The module aims to help managers interpret economic information and incorporate it into strategic decision-making.
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This document provides an overview of economics and key concepts in microeconomics and macroeconomics. It discusses:
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2) Microeconomics examines economic decisions at the individual level, like consumers, workers and firms. Macroeconomics looks at aggregate measures like GDP, unemployment, and financial markets.
3) Microeconomics analyzes how consumers, producers and firms reach equilibrium within markets under conditions of scarcity and determined prices. It helps inform both corporate decision making and public policy design.
This document provides an overview of economics and key concepts in microeconomics and macroeconomics. It discusses:
1) Economics is concerned with allocating scarce resources to produce and distribute goods and services.
2) Microeconomics examines economic decisions at the individual level, like consumers, workers and firms, while macroeconomics looks at aggregate quantities like GDP, unemployment and inflation rates.
3) Microeconomics analyzes how prices are determined by supply and demand in markets and how consumers, workers and firms reach equilibrium. It helps inform corporate and government decision-making.
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2. LABOR ECONOMICS
Labor economics is the study of the workings of the
market for labor, which is primarily concerned with
the behavior of employers and employees in
response to the general incentives of wages, prices,
profits, and aspects of the employment relationship.
Labor economics will be conducted on two levels:
• Positive economics – “what is”
• Normative economics – “what should be.”
3. 1.1 THE LABOR MARKET
Labor is unique in several ways:
• Labor services can only be rented because workers cannot be bought and sold.
• Labor services cannot be separated from workers, therefore, the conditions (nonpecuniary factors:
environment, risk of injury, personalities of managers, perceptions of fair treatment, and flexibility of
work hours) under which such services are rented are often as important as the price.
The circumstances under which employers and employees rent labor services clearly
constitute a market, e.g. the labor market (placement of people in jobs).
• Institutions – want ads and employment agencies facilitate contact between buyers and sellers of
services.
• Information about price and quality is exchanged in employment applications and interviews.
• Contract between both parties spells out: compensation for time, conditions of work, job security, and
duration of the job.
4. 1.2 LABOR ECONOMICS
• Several important things about the assertions of utility maximization and profit maximization:
Employees and employers are both mindful of their scarce resources and are therefore on the lookout for
chances to improve their wellbeing.
There is a negative relationship between wages and voluntary turnover by holding other things equal – this
relationship is supported by statistical studies or evidence.
The assumptionsof the theory concern individual behavior of employers and employees.
5. 2.2 HOW THE LABOR MARKET WORKS
Firms must successfully operate in the labor market, the capital market, and the
product market if they are to survive
Firms purchase inputs – labor (L) and capital (K) used in the production of goods
and services – from the labor market and the capital market, respectively
The study of the labor market begins and ends with an analysis of the demand for
and the supply of labor
• Employers/Firms demand for labor from different labor markets
• Employees/Workers supply their labor services
Remember that the major labor market outcomes are related to:
(a) the terms of employment (wages, compensation levels,
working conditions) and
(b) the levels of employment.
6. 1.2 LABOR ECONOMICS
Positive Economics
Positive economics is a theory of behavior in which people are typically assumed to respond favorably to benefits
and negatively to costs, and underlying this theory of behavior are the basic assumptions of scarcity and
rationality.
Scarcity: demand for labor is greater than the availability of the labor scarcity – and choices must be
made.
Rationality The basic assumption that people are rational – that means they have an objective, which they
pursue in a reasonably consistent.
• For persons: the objective is utility maximization.
• For firms: the objective is profit maximization.
• The assumption of rationality implies a consistency of response to general economic incentives and an
adaptability of behavior when those incentives change.
7. The Models and Predictions of Positive Economics
Behavioral predictions in economics flow more or less directly from the two fundamental
assumptions of scarcity and rationality
• Due to scarcity, workers continually make choices such as: look for other jobs, accept overtime, move
to another area, or acquire more education
• Employers also make choices: level of output, input mix in
production
Economists assume that the choices and decisions made by employees and employers are
guided by their desire to maximize utility or to maximize profit, respectively
8. The Models and Predictions of Positive Economics
An Economic Model – To really grasp the assumptions and
predictions of economic models with respect to scarcity and
rationality, we consider the following examples:
• From the employee side of the market, we can assert that being
subject to resource scarcity, workers will prefer high-paying jobs to
low-paying ones if all other job characteristics are the same in each
job – a highlight of the utility maximizing behavior of workers
• From the employer side of the market, we can also assert that firms
need to make profit to survive, and if they have high turnover, their
costs will be higher than otherwise because of the need to hire and
train replacements – a highlight of the profit maximizing behavior of firms.
9. Markets and Values
Policies or transactions from which all affected parties gain can be said to be Pareto-improving
because they promote Pareto efficiency – unambiguously enhance social welfare and they can be
unanimously supported because:
• All parties who are affected by the transaction gain.
• Some parties gain and no one loses.
• Some parties gain and some lose from the transaction, but the gainers fully compensate
the losers.
Market Failure: Ignorance – People may be ignorant of some important facts and are thus
led to make decisions that are not in their self-interest – for example, a smoker who takes a job at
an asbestos plant may not know that inhaling asbestos dust and smoking substantially increased
the risk of disease.
Market Failure: Transactions Barriers – There may be some barriers to the completion of
mutually beneficial transactions:
10. Industries and Occupations: Adapting to Change
The labor-market changes occurring in a dynamic economy are sizable:
• There are sectoral changes in jobs – some jobs have expanded over the
years while some have contracted.
• Workers and employers have adapted to these changes through the
acquisitions of new skills and technology.
11. Market, Industry, and Firm Demand
• The demand for labor can be analyzed on three levels
Firm level – to analyze the demand for labor by a particular firm, we see how
an increase in the wage rate of machinists affects their level of employment
by a particular aircraft manufacturer.
Industry level – to analyze the effect of this wage increase on the
employment of machinists in the entire aircraft industry, we utilize an industry
demand curve.
Market – to see how the wage increase affects the entire labor market for
machinists in all industries in which they are used, we use a market demand
curve.
12. LABOUR MARKET
• Labour Market: - It is the market in which wages and conditions of
employment are determined. Remember that in the market system the
forces of demand and supply determine commodity prices while in the
labourmarket.
• Note: Labour services are not homogenous, they are classified based on
thequality of skills requirement.
13. Nature of Labour Problem in Developing
Economies Or Countries:
Nature of Labour Problem in Developing Economies Or Countries:
Labour Problem can be defined as the problem of improving
the conditions of employment of the wage-earning classes.
It encompasses the difficulties faced by wage-earners and
employers who began to cut wages for various reasons
including increased technology, desire for lower costs or to
stay in business at all cost. The wage-earning classes
responded with strikes, by unionizing and by committing
acts of outright violence.
14. DEVELOPING ECONOMIES HAVE LABOUR RELATED
PROBLEMS
2. Government is the chief employer of labour. While the
employment by the organize private sector is minimal in such
economy.
2. Labour force problem is a characteristic of many self-
employed artisans who are not organized nor have anything to do
with government, government institutions or the organized private
sector.
15. DEVELOPING ECONOMIES HAVE LABOUR RELATED
PROBLEMS
1. Shortage of labour – many developing countries lack skilled labour. The
reasons are because majority of the population are not skilled or semi-
skilled labour. For that reason they use expertise (foreigner) in
productions that need high level skilled manpower.
Most people who are working receive low wage payments which are
common among employees who have no skills or are semi-skilled. That is
those who have little or no education.
Labour is abundant for agriculture, while there is less labour for industries,
commerce, and services
16. LABOUR PROBLEMS IN SOMALIA.
The problem of inflation
has serious negative influence in the labour market. Inflation gives
rise to the prices of the factors of production. Similarly, it has influence
in the commodity price; it leads to low production because of its effect
on the factors price. Inflation is most times heightened by low
production, money laundering or structural defects which are very
peculiar to the Somalian economy
17. LABOUR PROBLEMS IN SOMALIA.
Consistent failure of imported ideas or strategies:
In the past years most imported ideas, approaches and strategies have failed to work in somalia.
Non workability of the ideas is attributed to differences in collective and historical background.
Attempt to emulate foreign ideas or policies would end up aggravating the problems already
facedin the Somalian labor market rather than solving them.
Violation of Institutional Arrangements:
Wages are supposed to be negotiated and not rewarded. Basically, there is always an institutional
arrangement for wage determination which could either be by collective bargaining, labor courts.
Unfortunately, the institutional arrangements are completely violated and flawed by the state
which of course distorts the flow or functioning of the labor market. A very good example is the
award of wages to workers by the state.
18. LABOUR PROBLEMS IN SOMALIA.
1.The problem of informalization of the economy: It is one of the
labour problems faced by Somalia. It has caused labour issues and has
affected the demand of labour in the labour market.
2.Mismatch of skills: This is one of the major problems in the Somalia
labour market and it is greatly affecting the demand for labour in the
market.
3.Geographical mismatch, political and regional interference and
regional differences or crisis are some of labour problems in Somalia.
19. LABOUR FORCE PARTICIPATION RATE:
The labor force participation rate is the percentage of working-age persons in an
economy who:
Are employed
Are unemployed but looking for a job.
The labor force participation rate is the percent of the population ages 15 and
older that is economically active. That includes the employed and the
unemployed individuals. All people who supply labor for the production of goods
and services during a specified period.
Typically "working-age persons" in Somalia is defined as people between the
ages of 15-60. People in those age groups who are not counted as participating
in the labor force are typically students, homemakers, non-civilians,
institutionalized people, and persons under the age of 64 who are retired.
20. THE CONCEPT OF UNEMPLOYMENT
Unemployment is a phenomenon that occurs when a person who is
actively searching for employment is unable to find work. Unemployment
is often used as a measure of the health of the economy of a nation. The
Bureau of Labor Statistics (BLS) defines unemployment as people who are
jobless and
have actively looked in the past four weeks. If they don't keep looking, the
BLS doesn't count them in the labor force.
The most frequent measure of unemployment is the unemployment rate,
which is the number of unemployed people divided by the number of
people in the labour force. Economists divide unemployment into many
different categories.
21. THE CONCEPT OF UNEMPLOYMENT
The two broadest categories of unemployment are voluntary and
involuntary unemployment. When the unemployment is voluntary
it means that a person has left his job willingly in search of other
employment.
It is involuntary, when a person has been fired or laid off and now
must look for another job. Both voluntary and involuntary
unemployment are broken down into three major types. Structural,
Frictional and Cyclical unemployment.
22. TYPES OF UN-EMPLOYMENT
Structural unemployment comes about through technological
advances, when people lose their jobs because their skills are outdated.
Structural unemployment is due to changes in demand. This
unemployment is cause by changes in the country’s industrial structure
through the switching of production from one kind of work to another.
Such a change produces unemployment only because of the immobility of
factor of production.
23. FEATURES OF STRUCTURAL UN-EMPLOYMENT
Features of Structural Unemployment:
I. It results from a mismatch between skills needed for available jobs
and the skills possessed by those seeking job.
II. It may occur because of geographical mismatch between the location
of job openers and job seekers.
24. FRICTIONAL UN-EMPLOYMENT
2. Frictional unemployment:
Frictional unemployment arises when a person is in-between jobs. After a
person leaves a company, it naturally takes time to find another job,
making this type of unemployment short-lived. It is also the least
problematic from an economic standpoint.
This is a type of the unemployment problem in Somalia. The feature of
this unemployment involves a short-term unemployment which follows
workers strikes, natural disasters, layoff or the conscious action of
workers who quit their job that are low paying in search of high paying
ones.
25. FRICTIONAL UN-EMPLOYMENT
Frictional unemployment occurs because not all active job seekers
would have found job or accepted employment and not all employers
would have filled their job vacancies in this case. Unemployment rate
always remains positive for the following reasons;
1. People continually quit their present job to search for new jobs.
2. People enter the labour force to seek work or job for the first time.
3. People re-enter the labour force after periods of absence
4. People move from one job to another within the 30 days
26. DEMAND DEFICIENT OR CYCLICALUNEMPLOYMENT:
Cyclical unemployment comes around due to the business cycle itself.
Cyclical unemployment rises during recessionary periods and declines
during periods of economic growth.
It is as a result of decline in the aggregate demand when the
aggregate demand for a product fall. For example, if sales are low,
which leads to low profit as demand falls, there would be unsold
inventories as a result, profits will drop and as a result, workers will be
laid off their jobs which will lead to unemployment.
27. CAUSES OF UN-EMPLOYMENT
There are seven causes of unemployment. Four cause frictional
unemployment. That occurs whenever employees leave their job to find a
better one. There are two causes of structural unemployment. That's when
workers' skills, or income requirements, no longer match the jobs
available. These occur even in a healthy economy. The natural rate of
unemployment is between 4.7 percent and 5.8 percent according to the
Federal Reserve
28. CAUSES OF UN-EMPLOYMENT
1. One reason for unemployment is voluntary. Some of the unemployed have
saved enough money so they can quit unfulfilling jobs. They have the luxury to
search until they find just the right opportunity.
1. The second cause is when workers must move for unrelated reasons. They are
unemployed until they find a position in the new town.
1. The third reason is when new workers enter the workforce. That includes
students who graduate from high school, college, or any higher degree
program. They have more skills than if they didn't go to school. That's a big
primary reason for youth unemployment.
1. The fourth reason is when job seekers re-enter the workforce. They went
through a period in their lives when they stopped looking for work.
29. CAUSES OF UN-EMPLOYMENT
1. The fifth cause is technology advances. That's when computers or robots replace
worker tasks. Most of these workers need retraining before they can get a new job
in their field.
1. The sixth cause is job outsourcing. That's when a company moves its
manufacturing or call centers to another country. Labor costs are cheaper in
countries with a lower cost of living. That occurred in many states in 1994. Many
manufacturing jobs moved to Mexico from USA. It also occurred once when
workers in China and India gained the skills needed by American companies.
1. The seventh reason for unemployment is when there are fewer jobs than
applicants. The technical term is demand-deficient unemployment. When it
happens during the recession phase of the business cycle, it's called cyclical
unemployment.