Labour Economics

Because the coefficient is less than 1, the impairment bouncyity is said to be inelastic. 3. We last that if the price of a product changes, we will see movement on the emend cut back. Name and explain, using an example, three factors that can cause the necessary switch off for labor to supplanting. (3 marks) Factors that cause the demand curve for labor to shift can be the income levels of consumers. When there is an amplification in ones pay their trustfulness will rise which will allow them to want to spend to a greater extent(prenominal) money.The demand of goods and work increase because there is also an increase in their disposable income. Also when there is an increase income just about consumers taste and preferences whitethorn change Just like if there was huge decline in the income (they would prefer to shop on the sale jack). If they do non desex as much money as before the demand for that goods or service will decrease (shift to the left) while they look fo r substitutes (goods or services for a cheaper price).For example, if Katherine gets laid morose from work, instead of buying cleaning agents for their washroom at Shoppers Drug Mart where she normally shops, she would probably rather pick up two bottles of Pine sol for a dollar each at Dollar. Also firms may decrease the hours for their employees or even lay employees off when there is a decline in demand for their goods or services. They would not hire superfluous workers because their receipts may not cover their additional cost. 4.Briefly explain the difference between pay equity and employment equity. (2 marks) indemnify Equity focuses on paying an employee for the value of their work without discriminating against the employees sexual orientation. Whereas employment equity lies under the Human Rights mandate, where one should not be discriminated by their sexual orientation, religion, age, race, and disability. This allows a firms workplace environment to be more(prenom inal) diverse and allowing everyone an fit opportwholey when applying to work for ones company.Labour economics duty unions are also known as Labour unions. It is the association of labor partyers in a particular cope, industry, or company, created for the purpose ot securing Improvements In pay, benefits, working conditions, or social and political status through collective bargain. Its an organization whose social station consists of workers and union leaders who are united to protect and promote their car park interests. What do you mean by Collective negotiate?It is a hold process by which employers and independent trade unions egotiate terms and conditions of employment and the ship canal in which certain employment related Issues are to be correct at national, organizational and workplace levels. It is a collective and a day-and-night process. The principle of give and take has been infused in the principle of Collective Bargaining. It is a proficiency that has been adopted by the unions and the managements to reconcile their conflicting Interests.It is called collective because the employees as a free radical select representatives to meet and discuss differenced with the employer. It is known as argaining because the method of attain an agreement involves proposals and counter proposals, offers and counter offers and other negotiations. Definition of collective Bargaining by Byar & Rue (1991 It Is a process that Involves the negotiation, drafting, administrative and interpretation of a written agreement between an employer and a union for a ad hoc period of time.Collective Bargaining- To Employees- Importance of 1 . CB helps to develop a esthesis of responsibility and accountability among the employees. 2. CB increases the morale and productivity of employees. 3. It helps In securing a spark off and fair settlement of grievances. 4. Effective collective Bargaining machinery strengthens and gives value to the trade union movement. 5. The discrimination and exploitation of workers, If any, Is constantly monitored and addressed. To Management- 1 .It helps in reducing labour problems to the minimum and in maintaining cordial relations labour and management 2. It opens up the channel of communication between the workers and management and so increasing worker participation In decision making. 3. CB helps to create a sense of Job security among employees. . It makes simpler for the management to resolve issues at the bargaining level rather than taking up complaints of individual workers. MINIMUM yield AND FAIR WAGES It Is the lowest prosecute permitted by the law or by a special government.The minimum profit attempts to protect employees from the exploitation, allowing them to concede the basic necessities of life such as clothing, water, food and shelter. The minimum affiance rate fluctuates between countries, and sometimes between states or provinces. tOf3 It must prov10e not only Tor tne Dare suoslstence 0T II Te out Tor tne preservatlon 0T he efficiency of the workers by providing some measures of education, medical care, etc Criteria It must be calculated for a family of 4 units.It must be able to provide 2700 calories per adult per day. It should be sufficient for 18 yards of cloth per unit per annum. There should be a provision for sensitive house rent, light, fuel and miscellaneous circumstances. The Minimum profitss Act, 1948 is an Indian legislation enacted by the Parliament of India for statutory fixing of minimum earnings pay to skilled unskilled labourers. Under the act, a tripartite committee the three-way Committee of Fair Wage was appointed that et definitions and guidelines for formulating a betroth construction in India.The objectives of this act were - To provide minimum return to the workers working in the organized sector. To stop exploitation of the workers by paying them lower fight and making them work for longer hours. To empower the government to take go for fixing the minimum profitss and to revise it in a well-timed(a) manner. A Living lease is a wage that is high tolerable to maintain a normal standard of living. It is not only for the simple(a) essentials for the worker and his family, but also for comfort, protection against ll-health, social needs, etc.Fair Wages refers to wage levels or company practices regarding wages that provide a living wage for workers while still complying with all national regulations (such as minimum wage, overtime payments, provision of paid holidays, etc. ) It is in between minimum wages and living wages, but below the living wage. With a fair wage, employees should be able to maintain a decent standard of living for themselves and their families. CHARACTERISTICS OF Indian LABOUR MARKET The Indian labour market can be categorized into three sectors Rural workersOrganized of the formal sector Urban unformed or informal structure Two-third of Indias workforce is apply in gardening and rural industries. One- third of the rural households are agricultural labour households, subsisting on wage employment. The nonunionized sector has low productivity and offers lower wages even though 94% of Indias working population is engaged in this sector. Wage determination for organized sector- The day, Week and month are the basic units for wage calculation. Normal working week is 5 days (for government) or flipper half days/ six days.Hour is generally not a unit for wage calculation in the organized secotr. Wage determination for unorganized sector- Day is the common unit of calculation for unorganized sector. In certain cases, piece rate wages (it is the pay for each item produced) is in vogue, as well as hourly wages. MODERN possible action OF WAGES The young economists are of the view that Just as the price of a commodity is determined by the interaction of forces of demand and preparation, the wage rate of specific types of workers can also be determined in the same way wit h the help of sual demand and supply analysis.This is why modern surmise is also known as demand and supply theory of Wages. Now the demand for labour is a derived aemana. t I Is aerlvea Trom tne aemana 0T goods wnlcn It produces, on wltn otner factors of production. The marginal tax product of labour (MRP) heart the addition to the firms revenue which it obtains by hiring one additional worker. The entrepreneur will continue hiring workers up to the point at which the cost of employing a worker is Just equal to the marginal revenue product of the labour.Now ue to the law of diminishing returns, the marginal revenue productivity of labour decreases as more and more workers are employed and hence the demand cure for labour is downward sloping. If we add up the demand curves for the labour of all the individual firms, we get the demand curve of the industry which determines the wage rate for labour. Now the supply of labour means the number of workers ready to work at the existing wage rate. contrasted the supply of other goods, the supply of labour cannot be increased with the increase in demand.Under perfect competition, the upply curve of a firm is perfectly elastic and the firm cannot influence the price/ wage. The supply curve of an industry is upwards rising from left to right, this means that an industry can get more labourers at higher wages. Determination of the equilibrium wage level Wage rate is determined by the supply of and demand for labour. Equilibrium wage state is said to be determined at the point where supply and demand are equal. In the fgure below, at point N, the supply curve and demand curve cut eachother. WN is the equilibrium wage rate.