Labour Text a

In order for any country to grow, it must have a large and skilled labour force. Since the size of this force is related to total population the number of people available for production activities will grow as the population grows. If the growth of population continues to decline, it eventually affect the growth of the labour force. However a labour shortage could be made up by workers from other countries. There are four major categories of labour that are based on the general level of skills needed to do any kind of job. These categories are unskilled, semiskilled, skilled and professional or managerial.

Unskilled labour. Workers who do not have the training to operate machines and equipment fall into the category of unskilled labour. Most of these people work chiefly with their hands at such jobs as digging ditches, picking fruit, etc.

Semiskilled labour. Workers who have mechanical abilities fall into the category of semiskilled labour. They may operate electric floor polishers. or any other equipment that calls for a certain amount of skill. Skilled labour. Workers who are able to operate complex equipment and who can do their tasks with little supervisions fall into the category of skilled labour. Examples are carpenters, typists, toolmakers. Professional labour. Workers with high level skills such as doctors, lawyers and executives of large companies fall into the category of professional labour. Most occupations have wage rate — a standard amount of pay given for work performed. How these rates are determined can be explained in two different ways. The first deals with supply and demand, the second recognizes the influence of unions on the bargaining process .

Labour Text В

Money is not only a means of exchange but is also a means of measuring the value of men's labour. In economic theory, labour is any work undertaken in return for a fixed payment. The work undertaken by a mother in caring for her children may be hard work, but it receives no fixed payment, It is not therefore labour strict economic sense.

As a scientist, the economist is interested in measuring the services which people render to each other. Although he is aware of the services which people provide for no financial reward, he is not concerned with these services. He is interested essentially in services which are measurable in terms of money payments of a fixed and/or regular nature! In economics, money is the standard by which the value of things is judged. This standard is not a religious subjective standard, but an objective and scientific one.

Human labour produces both goods and services. The activities of a farmworker and a nurse are very different, but both are measurable in terms of payment received. Labour in this sense is not concerned with distinctions of social class but simply with the payment of wages in return for work. When we talk about «the national labour force», however, we are thinking of all those people who are available for work within the nation, i. e. the working population.

It should be noted that any person engaged in private business is not paid a fixed sum for his activities. He is self-employed and his activities are partly those of an employer⁵ and partly those of an employee. If however he employs an assistant, to whom he pays a fixed wage, his new employee provides labour in return for payment. He receives his wages, while his employer receives the surplus (large or small) from the whole business. This surplus is the reward of private enterprise and is known as «profit ».

Labour Text С

The theory that uses the tools of supply and demand to explain differences in wage rates is called the traditional theory of wage determination.

For example, many people can dig ditches or work as baby sitters . However, fewer have the skills to become professional managers. In other words, professional managers generally are scarcer than ditch diggers or baby sitters.

This can be expressed in terms of supply and demand. When the level of supply is large In relation to demand, wages generally are low. When the level of supply is low in relation to demand as with managers — wages generally are high. In most cases, the higher the level of skills, or grade of labour, the higher the average yearly wage rate . For example, semiskilled workers will receive more, on the whole, than unskilled workers. Skilled workers will receive more than semiskilled or unskilled workers. Professional workers will receive more than any of the others.

There are, however, some cases in which the traditional theory does not explain the variations in wage rates. Some unproductive workers, for example, may receive high wages because of family ties or political influence. Some highly skilled or productive workers may receive low wages because of race, sex, or where they live.

At times, wages are determined not by supply and demand but by the influence of organized labour and the collective bargaining process. In these cases, unions do not try to get higher wages for their members on the grounds that labour is in short supply relative to demand. Nor does management push for lower wages when there is a very large supply of labour. This makes the price of labour-wages hard to define. When negotiating for wages, unions want to know the wage rates in other plants for the same kind of work and what changes have taken place or will take place in the future in the cost of living .