Supply And Demand For Labour - SS2 Economics Lesson Note

The supply of labour refers to the number of workers who are willing and able to work in a particular job market. This supply can be influenced by factors such as population growth, immigration, education and training levels, and government policies related to employment.

The demand for labour, on the other hand, refers to the number of workers that employers are willing and able to hire for a particular job market. This demand can be influenced by factors such as economic growth, technology, and changes in consumer demand.

When the supply of labour exceeds the demand for labour, there is an oversupply of labour or unemployment. In this situation, workers may have a hard time finding a job, and employers may not be motivated to offer high wages or good working conditions because they have a larger pool of workers to choose from.

When the demand for labour exceeds the supply of labour, there is a shortage of labour. In this situation, employers may struggle to find qualified workers to fill open positions, which can result in higher wages and better working conditions for workers.

The balance between the supply of and demand for labour is important because it affects wages, employment rates, and the overall health of the economy. In a healthy economy, the supply of and demand for labour are in balance, with enough jobs available to employ all those who are willing and able to work, and with wages that are fair and reflective of the value of the work being done.