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Labor and Employment
Prepared by: Rommel Gonzales, Kimberly Mallari & Wendy Manaig
Human Effort
Physical Effort
Mental Effort
Physical Effort
They are using their muscles to earn a living.
Mental Effort
They are using their creativity, resourcefulness and critical thinking.
CHARACTERISTICS OF LABOR
Characteristics of Labor
1. Labor is Perishable
2. Labor and the individual are inseperable
3.Labor supply does not change quickly
4. Most employable persons do not like to move. The following reasons are the
following:
They want to stay close with their families
They are not aware of the demand for their services elsewhere
They lack the required skill.
They cannot afford the cost of moving from one place to another
Kinds of Labor
Kinds of Labor
Manual Labor
This type of labor mostly involve the exertion of physical effort specifically the use of brawn and muscles. Examples of manual labor are those performed by construction workers, dishwashers, farm workers and many.
Clerical Labor
This type is considered as next higher in order than manual labor. Very little mental effort is required in clerical work as the job becomes routine after a while. Examples are Office clerks, sales clerk
Professional
LaborThe job of the professional requires a higher degree of intelligence than those clerks. A college degree is a requirement. Examples are Lawyers, Physician, Teachers, Engineering, Nurses, chemist and others
The Labor of
Management Managers of all kinds and types perform functions which may be referred to as labor of management. Examples are Supervisors, Managers, Area managers, foreman and etc.
The Labor of
Enterpreneur The entrepreneur is one who
organizes the business and see to it that the business becomes stable. The entrepreneur bears the risk of
running the business.
The Labor of
inventorsA very important ingredient of economic development is the output of the inventors. Without them, our world will be a dull place to live. Inventions like the electrical lamp and the motor car are only some of the outputs of scientist which were largely responsible for bringing the progress to the people
Supply of Labor
Supply of Labor
LaborIt is one of the factors of
production.
Suppliers of Labor spend their time on the following activities:
1. Market Activity
2. Nonmarket activity
The Effects of Wages on the Quantity of Labor Supplied
Household regards nonmarket activity as a basic requirement for wholesome living. If income is not a problem, they would rather spend all their time on it. But since they have to make some income, they will have to reduce the time spent on nonmarket activity so they can allocate some time for supplying labor to the market.
Market, Nonmarket Activity and ReturnActivity ReturnsMarket -immediate return in
the form of income
Nonmarket -goods and services produced in the home
-higher future income
-leisure
SUBSTITUTION EFFECT
If there are increase in wage rates and they feel that the returns they get from doing nonmarket activities are lower, they will tend to switch over some hours to market activity.
INCOME EFFECTWhen the household’s wage rate is higher, more income will be available to the household for spending. When the household decides to spend its money on leisure or other nonmarket activity , it reduces the time available for pursuing a market activity. This will result to the reduction of the quantity of labor supplied in the market.
The Demand for Labor
Quantity of Labor Demanded
Is the total number of man hours or man days hired by all firms in an economy. The demand for labor depend on the real wage rate.
Real Wage RateRefers to purchasing power of a given nominal or money wage. The nominal wage rate is the amount in pesos paid to a worker for a unit of work.
Problems of Labor
Unemployment and under employment
Inadequate wages
Industrial and labor-management conflict
Economic insecurities
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