Every society regardless of its wealth its form of government or the organization of the economy has to
deal with basic decisions. It must decide what and how much to produce.
We know that every market has buyers and sellers but who are the buyers and the sellers in the labor
market ?
Thebuyers in the labor market are the employers or the firms and the sellers are the workers. While
both buyers and sellers operate in a place called marketplace this makes it possible for emplyers to find
workers and those workers that are actively seeking jobs actually finding one.
Depending on the scale”” of job seeking , example doctors and mechanical engeniers, here the buyers
and sellers are searching through out an entire nation for each other this is called national labor market ,
and if this only happens locally is called local labor market.
In the labor market we can experience also switching, this happens a lot with especially actors. I have to
add here that a well known actrees like Bridgit Mendler has now developed northwood space”” that
expends acess to space. Meaning she is an actrfess singer and an ceo.
Now think abot a taxi driver what other jobs can he do ?
A taxi driver can also be a delivery man , truck driver, driving instructor etc.
4.
The term labor force refers to all those over 16 years of age who are employed, actively seeking work, or
expecting recall from a layoff. Those in the labor force who are not employed with wage are the
unemployed. And people that don’t work and are not looking for a job don’t count as a part of the labor
market thus the labor force is the total of employed and unemployed .
5,6,7,8 slide
9.
We observed that the hourly wage of a worker in amerika in 1990 was 10 and in 2015 the wage rose to
21 does this mean that the worker is twice as rich in 2015 ?
NO. because the wage rose but so did the prices of the services and the goods that the workers buyes.
To compare wages overtime we compare the purchasing power of the hourly wage with the same
bundle of goods In 1990 and 2015,this means that the worker in America could buy the bundle of goods
with 10 dollars in 1990 and the same bundle of goods for 20 dollars in 2015.
How to compare wages in different countries , this can be hard to do due to the differencies in currency
value but by using the bundle of goods that are a neccasity and purchasing power of the wages in
different countries for that bundle.
10.
There are several alternative ways to calculate real wages. The most straightforward way is todivide the
nominal wage by the CPI for each year and multiply by 100