Labour Economics

Be exercise the coefficient is less than 1, the price rubber bandity is verbalize to be inelastic. 3. We know that if the price of a output changes, we will see movement along the emend curve. Name and explain, using an example, three factors that can cause the study curve for labor to shift. (3 marks) Factors that cause the demand curve for labor to shift can be the income trains of consumers. When at that place is an increase in ones even out their confidence will rise which will allow them to extremity to spend more money.The demand of goods and services increase because there is also an increase in their expendable income. Also when there is an increase income some consumers taste and preferences may change Just like if there was huge decline in the income (they would prefer to shop on the sale jack). If they do not fabricate as much money as before the demand for that goods or service will come down (shift to the left) while they look for substitutes (goods or services for a cheaper price).For example, if Katherine attempts laid off from work, instead of buying make clean agents for their washroom at Shoppers Drug Mart where she normally shops, she would probably rather pick up two bottles of pine tree sol for a dollar each at Dollar. Also firms may decrease the hours for their employees or hitherto lay employees off when there is a decline in demand for their goods or services. They would not ope set out additional workers because their tax revenue may not cover their additional comprise. 4.Briefly explain the difference between pay equity and employment equity. (2 marks) Pay Equity focuses on paying an employee for the value of their work without discriminating against the employees informal orientation. Whereas employment equity lies under the Human Rights legislation, where one should not be discriminated by their sexual orientation, religion, age, race, and disability. This allows a firms workplace environment to be more diverse and a llowing everyone an equal opportunity when applying to work for ones company.Labour political economyTrade unions are also known as Labour unions. It is the association of working classers in a particular(prenominal) handicraft, industry, or company, created for the purpose ot securing Improvements In pay, benefits, working conditions, or social and political status through incorporated bargaining. Its an organization whose membership consists of workers and union leaders who are united to protect and promote their common interests. What do you mean by Collective Bargaining?It is a formalized process by which employers and independent shell out unions egotiate terms and conditions of employment and the ways in which certain employment related Issues are to be set at national, organizational and workplace levels. It is a collective and a continuous process. The principle of give and take has been infused in the principle of Collective Bargaining. It is a technique that has bee n adopted by the unions and the vigilances to reconcile their conflicting Interests.It is called collective because the employees as a group select representatives to meet and discuss differenced with the employer. It is known as argaining because the method of reaching an agreement involves proposals and anticipate 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 specific outcome of time.Collective Bargaining- To Employees- Importance of 1 . CB helps to develop a sense of responsibility and accountability among the employees. 2. CB increases the morale and productiveness of employees. 3. It helps In securing a prompt and fair settlement of grievances. 4. Effective collective Bargaining machinery strengthens and gives value to the trade union movement. 5. The disc rimination and exploitation of workers, If any, Is constantly monitored and addressed. To Management- 1 .It helps in reducing labour problems to the borderline and in maintaining cordial relations labour and management 2. It opens up the channel of communication between the workers and management thus increasing worker participation In decision making. 3. CB helps to create a sense of bank line security among employees. . It makes simpler for the management to resolve issues at the bargaining level rather than taking up complaints of several(prenominal) workers. MINIMUM WAGES AND FAIR WAGES It Is the lowest wage permitted by the law or by a special government.The minimal wage attempts to protect employees from the exploitation, allowing them to afford the basic necessities of life such as clothing, water, food and shelter. The stripped wage rate fluctuates between countries, and sometimes between states or provinces. tOf3 It must prov10e not only Tor tne Dare suoslstence 0T IIT e 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 satisfactory for 18 yards of cloth per unit per annum. There should be a training for reasonable house rent, light, render and miscellaneous items. The Minimum Wages Act, 1948 is an Indian legislation enacted by the Parliament of India for statutory fixing of minimum takings paid to skilled unskilled labourers. Under the act, a tripartite committee the Tripartite delegacy of Fair Wage was ap established that et definitions and guidelines for formulating a wage structure in India.The objectives of this act were - To provide minimum reinforcement to the workers working in the organized sector. To stop exploitation of the workers by paying them lower wages and making them work for longer hours. To empower the government to take steps for fixing the minimum wages and to revise it in a timely manner. A Living wage is a wage that is towering enough to maintain a normal standard of active. It is not only for the bare essentials for the worker and his family, entirely 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 unstructured or informal structure Two-third of Indias workforce is employed in agriculture and rural industrie s. 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 existence is engaged in this sector. Wage determination for organized sector- The day, Week and month are the basic units for wage calculation. natural working week is 5 days (for government) or five half days/ six days.Hour is for the most part 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. new-fangled THEORY OF WAGES The modern economists are of the view that Just as the price of a commodity is determined by the interaction of forces of demand and supply, the wage rate of specific types of workers can also be determined in the same way with the help of sual demand and supply analysis.This is why modern supposition 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, along wltn otner factors of production. The marginal revenue product of labour (MRP) centre 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 morsel of workers ready to work at the existing wage rate. Unlike 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 upward 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.