Labor Economic

- Nature and Characteristic of labor market
a. Labor market may be defined as a process by which supplies of particular type of labor and demand, for that type of labor balance or seek to obtain balance. – or –
b. Manufacturing or trading centre plus by the agricultural hinter land directly tributary to it.

- Characteristic of labor market
1. The relation between a buyer and seller in labor market is not temporary and it is to continue for some times.
2. Labor market are essentially local in character
3. Lack of mobility
4. A labor market is essentially an imperfect market where one does not find a normal wage rate to which the market rate naturally tends.
5. Monopoly in labor market
6. Labor market do not do justice to the worker

- Special character labor market in India
1. Existence of under-development in various sector of economy
2. Causal nature
3. A great surplus of all worker over all available jobs
4. Existence of unstable labor force
5. Age structure that most belong to the youngster

- Cause of Un-employment
1. Poverty
2. Excessive increase in population
3. Slow growth of economy
4. backward agriculture
5. Lack of national employment policy
6. Existence of excess capacity in industry
7. Emphasis on capital intensive technique
8. Defective educational system

- Type of Un-employment
1. Frictional
2. Voluntary
3. Involuntary

- Method of recruitment
1. Recruitment of labor through intermediaries
2. Direct recruitment

- Source of recruitment
1. Internal
2. External


- Wage determination
a. Wage are reward for the service of labor that are used during process of production
b. By labor mean –
The effort, both by physical and mental made by the human being

- Concept of wage
1. Money wage or Nominal wages
2. real wages

- The theory of wages
1. The just wage of the middle ages
2. The classical theory of wages
a. Adam Smith contribution to the wage theory
b. The subsistence theory of Ricardo
c. The standard of living theory
d. The wage fund theory
e. Residual claimant theory

3. Neo- Classical modern theory of wages
a. The marginal productivity theory
b. The bargaining theory of wages
c. Taussig’s theory of wages
d. Kalecki’s theory of wages

- The bargaining theory of wages – this theory was started in 1933 due to the weakness of the marginal productivity theory.
And the major assumption are “
1. Wages, hour and working condition a matter of bargaining
2. Without organization and concerted action there will be a tendency toward undesirable
3. No adequate safeguard is found in the operation of the factor at work in the organization trade
4. There is flexible, changeable situation

- Meaning of labor supply –
A. Supply labor to the firm
B. Supply labor to the industry
C. Supply labor to the entire economy

- Determinant of the supply of labor –
1. Other wage rates
2. Non-wage income
3. Preference for work versus leisure
4. Non-wage aspect of the job
5. Number of qualified supplier




- Determinant of the demand of labor –
1. Product demand
2. Productivity
3. Price of other input
4. Number of firm

- The demand of labor generally elastic –
a. The greater the elasticity of the product demand
b. The larger the ratio of labor cost to the total cost
c. The greater the substantialibility other input of labor
d. The greater the elasticity of supply of other inputs

- The concept of wages
1. The statutory minimum wages
2. Basic minimum wages
3. The minimum wages
4. The fair wages
5. The living wages
6. The need-based minimum wages

- The theory of minimum wages –
A theory which could meet the normal need of the average employee regarded as human being living in civilized society

- The theory of living wages –
The living wage should enable the male earner to provide for himself and his family the bare essential of food, but a measure of frugal comfort including education, etc

- The theory of fair wages –
The fair wages is an equal to that received by worker performing work of equal skill, difficulty or unpleasantness

- Bonus –
Bonus is a payment made to worker in addition to his normal wages, it is a gesture paid or something goodwill by employer to employee

- Profit sharing –
Profit sharing is implies employer gives a share in the surplus profit of the business to the worker in addition to the wages.

- Social security –
Social security it refers to the protection provided by the society to its member againt providential mishap over which a person has no control
- The idea of social security is that the state shall make it self responsible for ensuring a minimum standard of material welfare to all it is citizen on a basis wide enough to cover all the main contingency of life.






o Type of insecurity –
1. Income insecurity
a. Inadequate wages
b. Faulty methods of wage payment
c. Lay-off
2. Occupational insecurity
a. Occupational disease
b. Improper condition of work
c. Industrial accident
3. Natural insecurity

o Defination of social security include –
a. Social insurance
b. Social assistance
c. Family benefit
d. Health care and other social justice
e. Related social welfare service

- Trade union –
- Trade union is an organization whose principle purpose include the regulation of relation between employees and employer or employer association, a house or company union is an association of employees all belonging to the same company which will probably have no connection which trade union movement.
- An industrial or general union has a member who work in the same industry it is usually very large.
- A craft union is a small union of skilled worker. Union affair are regulated by the trade union act (1984) and the employment act (1988)
- This provide the secret ballot must be held for election of union executive committee and before any industrial action backed














Ir_ones
Preparing for the final examination of MA Economic at Raja Balwant Singh College (RBS College) Agra University, Agra- India.