Work is all forms of human endeavor that are made or used in production. In other words, it refers to the mental and physical efforts of man generated in the production process. The market, on the other hand, is a point or place or any means of communication through which sellers and buyers can communicate with each other, to exchange goods and services at prices determined by market forces. Therefore, the labor market is defined as a market in which buyers and sellers of labor are in close contact during which wages and other terms of services are determined and agreed upon. Labor is the factor of production that is generally bought and sold in the market.
Workforce
The labor force is the total number of people available to supply labor for the production of economic goods and services. In other words, it is the total number of people of working age in a country who are legally able and willing to work. It is the active or working population and included all the people who have a job and those who seek employment in the labor market. They are typically in the 18 to 65 age group. The workforce varies from country to country. To be a member of the workforce, one must be of working age (18-65 years), be capable, that is, not be disabled either. Mentally or physically, and you must be willing to work. People who are not members of the workforce include:
– School-age children (0-17 years)
– Elderly (over 65 years old)
– The disabled (physical or mental)
– People despite being healthy but unwilling to work.
Labor demand
The demand for labor is the total number of workers that employers are willing and willing to employ or hire at a given time and at a given salary. The demand for labor is a derived demand, because labor is not necessary for its own sake, but for what it can help to produce. The factors that affect the demand for labor are:
1. The size of the market: The size of the market for goods and services produced determines the demand for labor. The larger the market, that is, the greater the production of goods and services, the greater the demand for labor to produce the necessary goods and services.
2. Number of industries: the greater the number of industries that produce the necessary goods and services, the greater the demand for labor.
3. Labor price wage rate: The demand for labor by employers depends on the price at which the job is offered for sale (by the workers). If the labor force is willing to accept a low wage, the demand for labor will be high.
4. Availability of other factors of production: if other factors of production, such as land and capital, are available in large quantity to produce the necessary goods and services, there will be a high demand for corresponding labor.
5. Labor efficiency: If labor efficiency is high, employers would have a high propensity to hire more labor and vice versa.
6. Demand for goods and services: The demand for goods and services in a country can stimulate an increase in the demand for labor.
7. Nature of Industries: The nature of industries, whether they are capital or labor intensive, will determine the demand for labor. Labor-intensive industries will generate high demand for labor.
8. Employment status: The employment status determines the demand for work. If the economy has reached full employment, there will be little or no demand for labor, but if there is underemployment, there will be a need to demand more labor.
Labor supply
The labor supply is the total number of people of working age who are offered for a job at a given time and at a given salary. In other words, the job offer can be called the job services available on the job market. Factors that affect the supply of labor or the size of the workforce are as follows:
1. Size of the population of a country: the larger the population, the greater the amount of labor to supply.
2. Official school completion age: if the school completion age is low, the proportion of the workforce will be high.
3. Retirement age: The age of exit from public employment will determine the active population. The older the age, the greater the supply of labor and vice versa.
4. Search for a higher education: Many people in their search for a higher education, exceed the official age of entry into the workforce.
5. Age structure of the population: The structure of the population of a country is a significant determinant of the size of the labor force. The lower the number of dependents, the greater the supply of labor in a country with a greater number of people between the ages of 18 and 65.
6. Role of women in society: In some societies, women are generally prevented from having paid employment due to religious beliefs, social and cultural factors and this affects the size of the workforce.
7. Number of work hours and work days: The number of work hours per day and the number of work days in a week of the year also helps to determine the labor supply.
8. The number of disabled: when the number of disabled is high, especially within the workforce, the supply of labor will be low.
9. The number of people who are not willing to work: there are a certain number of healthy people who are also between 18 and 65 years old but who are not willing to work. If your population is high, it will affect the size of the labor supply.
10. Migration: The migration rate can also affect the size of the workforce. If the rate at which the working population leaves a country is higher than the rate at which it enters, there will be a reduction in the supply of labor.
11. Union activities: Union activities can also affect the supply of labor. For example, when a long period of training is imposed on a certain trade, this can discourage people from pursuing that trade or profession, leading to a reduction in the supply of labor.
12. Government Policies: Certain government policies can affect the supply of labor. For example, specific laws are drawn up to exclude children and women from work in ministries. This can reduce the supply of labor to that area or field.
In summary, if a city has an average of 100 deliveries in a week and 30 surgical cases in 2 months, what do you think the supply and demand would be like if 50 gynecologists and 50 surgeons were sent to this city? The supply and demand of labor are very essential in our daily life.