labour market essay

How Tight are U.S. Labor Markets?

Since the outset of the Covid-19 pandemic, labor market indicators that traditionally move together have been sending different signals about the degree of slack in the U.S. labor market. While some indicators on the supply-side, such as the prime-age employment-to-population ratio, suggest that there is still some slack in the labor market, other indicators on the demand-side, such as the job vacancy rate and the quits rate, imply that the labor market is already very tight. In light of these divergent signals, this paper compares alternative labor market indicators as predictors of wage inflation. Using national time series and state cross-section data, we find (i) unemployment is a better predictor of wage inflation than non-employment and (ii) vacancy rates and quit rates have substantial predictive power for wage inflation. We highlight the fact that vacancy and quit rates currently experienced in the United States correspond to a degree of labor market tightness previously associated with sub-2 percent unemployment rates. Finally, we show that predicted firm-side unemployment has dominant explanatory power with respect to subsequent inflation. Our results, along with a cursory analysis of labor force participation information, suggest that labor market tightness is likely to contribute significantly to inflationary pressure in the United States for some time to come.

Thanks to Jason Furman for comments and to Regis Barnichon for providing us with data. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

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• Measuring the Tightness of the Late-COVID Labor Market Author(s): Alex Domash Lawrence H. Summers Jason Faberman Andreas I. Mueller Ayşegül Şahin Two recent NBER working papers develop new strategies for measuring the tightness of US labor markets and conclude that during 2021,...

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14.1 The Theory of Labor Markets

Learning objectives.

By the end of this section, you will be able to:

• Describe the demand for labor in perfectly competitive output markets
• Describe the demand for labor in imperfectly competitive output markets
• Identify what determines the going market rate for labor

Clear It Up

What is the labor market.

The labor market is the term that economists use for all the different markets for labor. There is no single labor market. Rather, there is a different market for every different type of labor. Labor differs by type of work (e.g. retail sales vs. scientist), skill level (entry level or more experienced), and location (the market for administrative assistants is probably more local or regional than the market for university presidents). While each labor market is different, they all tend to operate in similar ways. For example, when wages go up in one labor market, they tend to go up in others too. When economists talk about the labor market, they are describing these similarities.

The labor market, like all markets, has a demand and a supply. Why do firms demand labor? Why is an employer willing to pay you for your labor? It’s not because the employer likes you or is socially conscious. Rather, it’s because your labor is worth something to the employer--your work brings in revenues to the firm. How much is an employer willing to pay? That depends on the skills and experience you bring to the firm.

If a firm wants to maximize profits, it will never pay more (in terms of wages and benefits) for a worker than the value of their marginal productivity to the firm. We call this the first rule of labor markets .

Suppose a worker can produce two widgets per hour and the firm can sell each widget for $4 each. Then the worker is generating $8 per hour in revenues to the firm, and a profit-maximizing employer will pay the worker up to, but no more than, $8 per hour, because that is what the worker is worth to the firm.

Recall the definition of marginal product. Marginal product is the additional output a firm can produce by adding one more worker to the production process. Since employers often hire labor by the hour, we’ll define marginal product as the additional output the firm produces by adding one more worker hour to the production process. In this chapter, we assume that workers in a particular labor market are homogeneous—they have the same background, experience and skills and they put in the same amount of effort. Thus, marginal product depends on the capital and technology with which workers have to work.

A typist can type more pages per hour with an electric typewriter than a manual typewriter, and the typist can type even more pages per hour with a personal computer and word processing software. A ditch digger can dig more cubic feet of dirt in an hour with a backhoe than with a shovel.

Thus, we can define the demand for labor as the marginal product of labor times the value of that output to the firm.

On what does the value of each worker’s marginal product depend? If we assume that the employer sells its output in a perfectly competitive market, the value of each worker’s output will be the market price of the product. Thus,

Demand for Labor = MP L x P = Value of the Marginal Product of Labor

We show this in Table 14.2 , which is an expanded version of Table 14.1

Note that the value of each additional worker is less than the value of the ones who came before.

Demand for Labor in Perfectly Competitive Output Markets

The question for any firm is how much labor to hire.

We can define a Perfectly Competitive Labor Market as one where firms can hire all the labor they want at the going market wage. Think about secretaries in a large city. Employers who need secretaries can probably hire as many as they need if they pay the going wage rate.

Graphically, this means that firms face a horizontal supply curve for labor, as Figure 14.3 shows.

Given the market wage, profit maximizing firms hire workers up to the point where: W mkt = VMP L

Derived Demand

Economists describe the demand for inputs like labor as a derived demand . Since the demand for labor is MPL*P, it is dependent on the demand for the product the firm is producing. We show this by the P term in the demand for labor. An increase in demand for the firm’s product drives up the product’s price, which increases the firm’s demand for labor. Thus, we derive the demand for labor from the demand for the firm’s output.

Demand for Labor in Imperfectly Competitive Output Markets

If the employer does not sell its output in a perfectly competitive industry, they face a downward sloping demand curve for output, which means that in order to sell additional output the firm must lower its price. This is true if the firm is a monopoly, but it’s also true if the firm is an oligopoly or monopolistically competitive. In this situation, the value of a worker’s marginal product is the marginal revenue, not the price. Thus, the demand for labor is the marginal product times the marginal revenue.

The Demand for Labor = MP L x MR = Marginal Revenue Product

Everything else remains the same as we described above in the discussion of the labor demand in perfectly competitive labor markets. Given the market wage, profit-maximizing firms will hire workers up to the point where the market wage equals the marginal revenue product, as Figure 14.6 shows.

Do Profit Maximizing Employers Exploit Labor?

If you look back at Figure 14.4 , you will see that the firm pays only the last worker it hires what they’re worth to the firm. Every other worker brings in more revenue than the firm pays them. This has sometimes led to the claim that employers exploit workers because they do not pay workers what they are worth. Let’s think about this claim. The first worker is worth $x to the firm, and the second worker is worth $y, but why are they worth that much? It is because of the capital and technology with which they work. The difference between workers’ worth and their compensation goes to pay for the capital and technology, without which the workers wouldn’t have a job. The difference also goes to the employer’s profit, without which the firm would close and workers wouldn’t have a job. The firm may be earning excessive profits, but that is a different topic of discussion.

What Determines the Going Market Wage Rate?

In the chapter on Labor and Financial Markets , we learned that the labor market has demand and supply curves like other markets. The demand for labor curve is a downward sloping function of the wage rate. The market demand for labor is the horizontal sum of all firms’ demands for labor. The supply of labor curve is an upward sloping function of the wage rate. This is because if wages for a particular type of labor increase in a particular labor market, people with appropriate skills may change jobs, and vacancies will attract people from outside the geographic area. The market supply of labor is the horizontal summation of all individuals’ supplies of labor.

Like all equilibrium prices, the market wage rate is determined through the interaction of supply and demand in the labor market. Thus, we can see in Figure 14.7 for competitive markets the wage rate and number of workers hired.

The FRED database has a great deal of data on labor markets, starting at the wage rate and number of workers hired .

The United States Census Bureau for the Bureau of Labor Statistics publishes The Current Population Survey , which is a monthly survey of households (you can find a link to it by going to the FRED database found in the previous link), which provides data on labor supply, including numerous measures of the labor force size (disaggregated by age, gender and educational attainment), labor force participation rates for different demographic groups, and employment. It also includes more than 3,500 measures of earnings by different demographic groups.

The Current Employment Statistics , which is a survey of businesses, offers alternative estimates of employment across all sectors of the economy.

The FRED database, found in the previous link, also has a link labeled "Productivity and Costs" has a wide range of data on productivity, labor costs, and profits across the business sector.

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• Authors: Steven A. Greenlaw, David Shapiro, Daniel MacDonald
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• Book title: Principles of Economics 3e
• Publication date: Dec 14, 2022
• Location: Houston, Texas
• Book URL: https://openstax.org/books/principles-economics-3e/pages/1-introduction
• Section URL: https://openstax.org/books/principles-economics-3e/pages/14-1-the-theory-of-labor-markets

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The Future of Jobs Report 2023

1. Introduction: the global labour market landscape in 2023

The past three years have been shaped by a challenging combination of health, economic and geopolitical volatility combined with growing social and environmental pressures. These accelerating transformations have and continue to reconfigure the world’s labour markets and shape the demand for jobs and skills of tomorrow, driving divergent economic trajectories within and across countries, in developing and developed economies alike. The Fourth Industrial Revolution, changing worker and consumer expectations, and the urgent need for a green and energy transition are also reconfiguring the sectoral composition of the workforce and stimulating demand for new occupations and skills. Global supply chains must also quickly adapt to the challenges of increasing geopolitical volatility, economic uncertainty, rising inflation and increasing commodity prices.

Like previous editions, The Future of Jobs Report 2023 offers insights into these transformations and unpacks how businesses are expecting to navigate these labour-market changes from 2023 to 2027, leveraging a unique cross-sectoral and global survey of Chief Human Resources, Chief Learning Officers and Chief Executive Officers of leading global employers and their peers.

This report is structured as follows: Chapter 1 reviews the global labour-market landscape at the beginning of 2023. Chapter 2 explores how key macrotrends are expected to transform this landscape over the 2023–2027 period. Chapters 3 and 4 then discuss the resulting global outlooks for jobs and skills over the 2023–2027 period. Chapter 5 reviews emerging workforce and talent strategies in response to these trends. The report’s appendices provide an overview of the report’s survey methodology and detailed sectoral breakdowns of the five-year outlook for macrotrends, technology adoption and skills.

In addition, The Future of Jobs Report 2023 features a comprehensive set of Economy, Industry, and – for the first time – Skill Profiles. User Guides are provided for each of these profiles, to support their use as practical, standalone tools.

As a foundation for analysing respondents’ expectations of the future of jobs and skills in the next five years, this chapter now assesses the current state of the global labour-market at the beginning of 2023.

Diverging labour-market outcomes between low-, middle- and high-income countries

The intertwined economic and geopolitical crises of the past three years created an uncertain and divergent outlook for labour markets, widening disparities between developed and emerging economies and among workers. Even as a growing number of economies have begun to recover from the COVID-19 pandemic and its associated lockdowns, low- and lower-middle-income countries continue to face elevated unemployment, while high-income countries are generally experiencing tight labour markets.

At the time of publication, the latest unemployment rates stand below pre-pandemic rates in three quarters of OECD countries, 1 and across a majority of G20 economies (Figure 1.1). At 4.9%, the 2022 unemployment rate across the OECD area is at its lowest level since 2001. 2

By contrast, many developing economies have experienced a comparatively slow labour-market recovery from the disruptions induced by the COVID-19 pandemic. In South Africa, for example, the formal unemployment rate has climbed to 30%, five percentage points higher than it was pre-pandemic (Figure 1.1). Developing economies, especially those reliant on the sectors hardest hit by recurring lockdowns, such as hospitality and tourism, still exhibit slow labour-market recoveries.

The asymmetry of the recovery is exacerbated by countries’ varying capacities to maintain policy measures to protect the most vulnerable and maintain employment levels. While advanced economies were able to adopt far-reaching measures, emerging economies have provided less support to the most vulnerable firms and workers due to their limited fiscal space. 3,4

In 2022, various employment indicators pointed towards a strong labour-market recovery for high-income countries, with many sectors experiencing labour shortages. In Europe, for example, almost three in 10 manufacturing and service firms reported production constraints in the second quarter of 2022 due to a lack of workers. 5 Nursing professionals, plumbers and pipefitters, software developers, systems analysts, welders and flame cutters, bricklayers and related workers, and heavy truck and lorry drivers were among the most needed professions (Figure 1.2).

In the United States, businesses in Retail and Wholesale of Consumer Goods reported close to 70% of job openings remaining unfilled, with close to 55% of roles unfilled in manufacturing and 45% in leisure and hospitality. 6 Businesses also reported difficulties in retaining workers. According to a global survey conducted in late 2022 across 44 countries, one in five employees reported they intend to switch employers in the coming year. 7

Diverging employment levels by gender, age and education level

Women experienced greater employment loss than men during the pandemic 8 , and according to the World Economic Forum’s Global Gender Gap Report 2022 9 , gender parity in the labour force stands at 62.9% – the lowest level registered since the index was first compiled. The global pandemic also disproportionately impacted young workers, with less than half of the global youth employment deficit projected to have recovered by the end of 2022. 10 As highlighted in Figure 1.3, the youth employment deficit relative to 2019 is largest in Southern Asia, Latin America, Northern Africa and Eastern Europe, with only Europe and North America likely to have fully recovered at the time of publication.

Workers with a basic education were also hardest hit in 2020, and slower to recover their prior participation in the labour market. In many countries the increase in unemployment from 2019 to 2021 of workers with a basic education level was more than twice as large as the impact on workers with advanced education (Figure 1.4).

Access to social protection

From January 2020 to January 2022, almost 3,900 social-protection measures were implemented across 223 economies to support the labour force impacted by COVID-19. 11 These measures are estimated to have reached close to 1.2 billion people globally. Wage subsidies, cash transfers, training measures and extending unemployment-benefit coverage have all been crucial tools to protect the most vulnerable during the pandemic. Most such short-term support measures are now being phased out, 12 and targeted medium to long-term investments will be needed to alleviate the long-term effects of recurring economic shocks on firms and workers.

Yet, there remains an urgent need to provide adequate social protection to those not covered by full-time employment contracts (Figure 1.5). Nearly 2 billion workers globally are in informal employment, representing close to 70% of workers in developing and low-income countries, as well as 18% in high income ones. 13 Given their susceptibility to economic shocks and working poverty, informal workers represent a crucial labour-market cohort and need better representation in data, broad-based income support in the short term and a longer term shift towards formalization.

Real wages and cost of living

According to the International Labour Organization (ILO), labour income in many developing countries remains below pre-pandemic levels. 14 In 2020, the global economy started experiencing inflation levels not seen in almost 40 years. 15 With high inflation, the global cost-of-living crisis has hit the most vulnerable hardest. 16 According to the ILO, for the first time over the last 15 years, workers’ real wages have declined – by 0.9% in the first half of 2022. 17

Across regions, real wage growth was most affected in Northern, Southern and Western Europe; Latin America; Asia Pacific; and North America. 18 In Africa, real wages saw a 10.5% drop in 2020 due to the global pandemic. 19 However, real wages have continued to increase in 2022 across Asia Pacific, Central and Western Asia and Arab states. 20

In line with rising inflation, purchasing power has declined for the most vulnerable, given the higher weight of energy and food in expenditures of the lowest-income households. 21 According to recent research by the United Nations Development Programme (UNDP), rising food and energy prices could push up to 71 million people into poverty, with hot spots in Sub-Saharan Africa, the Balkans and the Caspian Basin. 22 This cost-of-living crisis highlights the importance of designing permanent models of social protection for non-standard employment and the informal economy that provide security and support resilience. 23

Worker preferences

In this context of diverging labour-market outcomes, issues around the quality of work have come to the fore. This section reviews some of the latest worker preference research to analyse which job attributes are of most importance to workers currently. As a starting point, data shows workers, openness to changing employer. Data on worker preferences from CultureAmp 24 and Adecco 25 find that more than a quarter (33% and 27% of workers, respectively) do not see themselves at their current company of employment in two years’ time. In line with this, a little under half of workers (42% and 45%, according to CultureAmp and Adecco, respectively) actively explore opportunities at different companies.

Worker surveys at both CultureAmp 26 and Randstad 27 suggest that salary levels are the main reason workers decide to change their job. 52% of Randstad respondents say they worry about the impact of economic uncertainty on their employment and 61% of respondents to Adecco’s worker-preference survey worry that their salary is not high enough to keep pace with the cost of living given rising rates of inflation. 28

Additional data explores the protection and flexibility of employment: 92% of respondents to Randstad’s employee survey 29 say job security is important and more than half of these respondents wouldn’t accept a job that didn’t give assurances regarding job security. 83% prioritize flexible hours and 71% prioritize flexible locations.

A fourth theme identified by workers is work-life balance and burnout: 35% of CultureAmp respondents indicate that work-life balance and burnout would be the primary reason to leave their employer. Workers responding to Randstad’s employee survey 30 value salary and work-life balance equally, with a 94% share identifying both aspects of employment as important to choosing to work in a particular role.

Data also suggests that diversity, equity and inclusion (DEI) at work is particularly important to young workers. According to Manpower, 31 68% of Gen Z workers are not satisfied with their organization’s progress in creating a diverse and inclusive work environment, and 56% of Gen Z workers would not accept a role without diverse leadership. Meanwhile, data suggests that fewer women than men are trained.

Lastly, workers across age ranges indicate dissatisfaction about training opportunities. Manpower data 32 show that 57% of surveyed employees are pursuing training outside of work, because company training programmes do not teach them relevant skills, advance their career development or help them stay competitive in the labour market. Respondents to Adecco’s survey criticize companies for focusing their efforts too much on managers’ development, skills and rewards. Only 36% of non-managers who responded to Adecco’s survey said that their company is investing effectively in developing their skills, compared to 64% of managers.

Employment shifts across sectors

The past two years have witnessed a volatility in the demand and supply of goods and services resulting from lockdowns and supply-chain disruptions. The global economic rebound has reconfigured the sectoral distribution of employment across industries. Figure 6 presents OECD data demonstrating that, while Information Technology and Digital Communications experienced a strong rebound in most countries, the Accommodation, Food and Leisure; Manufacturing and Consumer; and Wholesale and Consumer Goods sectors are experiencing a slower rate of recovery. Since the first quarter of 2019, a majority of countries have experienced employment growth in Professional Services, Education and Training, Health and Healthcare, and Government and Public Sector, but employment in the Supply Chain and Transportation and Media, Entertainment and Sports sectors lags behind 2019 levels.

In addition to the pandemic-induced employment shifts we have seen across sectors during the last few years, generative AI models are likely to continue shaping sectoral shifts in employment. While AI applications are shown to be effective general-purpose technologies, 33 the development of general-purpose technologies have previously been hard to predict, which is why regulation needs to be both prompt and adaptable as institutions learn how these technologies can be used.

Through research conducted for the Future of Jobs Report, LinkedIn has identified the fastest growing roles globally over the past four years, shedding further light on the types of jobs employers have been seeking (Box 1.1).

The transformations that labour markets are experiencing have also increased the need for swifter and more efficient job reallocation mechanisms within and across different firms and sectors. The coming years represent a generational opportunity for businesses and policy-makers to embrace a future of work which fosters economic inclusion and opportunity, sets in place policies which will influence not only the rate of growth but its direction, and contribute to shaping more inclusive, sustainable and resilient economies and societies.

The green transition, technological change, supply-chain transformations and changing consumer expectations are all generating demand for new jobs across industries and regions. However, these positive drivers are offset by growing geoeconomic tensions and a cost-of-living crisis. 34

The Future of Jobs Survey was conducted in late 2022 and early 2023 bringing together the perspective of 803 companies – collectively employing more than 11.3 million workers – across 27 industry clusters and 45 economies from all world regions. The Survey covers questions of macrotrends and technology trends, their impact on jobs, their impact on skills, and the workforce transformation strategies businesses plan to use.

This chapter analyses findings from the World Economic Forum’s Future of Jobs Survey to explore how businesses expect macrotrends and technology adoption to drive industry transformation and employment.

BOX 1.1 The fastest-growing jobs support sales growth and customer engagement, the search for talent, and technology/IT

In collaboration with LinkedIn

Research conducted by LinkedIn for the Future of Jobs Report 2023 describes the 100 roles that have grown fastest, consistently and globally, over the last four years – known as the “Jobs on the Rise”. While ILO and OECD data show which sectors are employing more people, Jobs on the Rise data identifies the specific job types that have experienced significant growth. Figure B.1 organizes the 100 Jobs on the Rise into broad types.

In line with ILO and OECD data on the growth of roles in the Information Technology and Digital Communication sector, Technology and IT related roles make up 16 of the top 100 Jobs on the Rise, the third-highest of all job groupings. Jobs related to Sales Growth and Customer Engagement top the list, with 22 of the 100 roles. With roles such as Sales Development Representatives, Director of Growth, and Customer Success Engineer featuring in this group, this may suggest an increasing focus on broadening customer groups and growth models in a world with increasing digital access and rapid technological advancement (more detail on how increasing digital access and adoption of frontier technologies could transform demand for specific job types is available in Chapter 3). Human Resources and Talent Acquisition roles are the second-most popular roles, and most of these relate to Talent Acquisition and Recruitment, including a specific role for Information Technology Recruitment – perhaps illustrating the increasing difficulty and importance of accessing talent in a generally strong labour market.

Of the groups further down the list, Sustainability and Environment related roles are notable for all being in the top 40, including three of the top 10 roles (Figure B.2). This might suggest the green transition is both a significant and developing labour-market trend, where roles have titles such as “Sustainability Analyst”. Chapter 3 further examines the outlook for roles related to a green transition.

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The Shaping of Moscow: Industrialization, Labor, and Society

Related Papers

Evgeniya Bobkova

The urban history of Moscow, as well as the history of its masterplans, has been thoroughly described in many studies, not least in relation to the political processes of the 20th century that had an immense influence on the formation of cities in the post-socialist block. In this paper, the logic behind the historical evolution of Moscow in the 19th and 20th century will be discussed; the aim here is to introduce another perspective of looking at Moscow's urban transformations. It is proposed, that the evolution of the city is the constant alternative process between the state of utopia and the state of crises. The state of utopia is usually featured by new visions intending to solve the existing urban problems of that time. The state of crisis that often follows, is marked by the externality effects of realized visions and usually results in urban problems on a different level of scale: again marking the necessity of new visions. Technological developments are integral to these processes; they are used as instruments to solve urban problems, but at the same time, they cause unexpected outcomes that have to be dealt with. To demonstrate this concept, three key periods of Moscow urban evolution in 19 th and 20 th century will be studied, including the General Plan of 1935.

City and society

Anatoly Khazanov

Kolosov Vladimir

The Culture of the Stalin Period

Vladimir Paperny

Palgrave Macmillan

Marina Glaser (Kukartseva)

Introduction The book aims to trace and explain the historical evolution of Moscow, the capital of the Tsardom of Russia, Soviet Union and Russian Federation, as a political entity and political community, and to understand what place Moscow occupied within the Russian political space and what role it played in Russian political life for centuries until 2018. The authors consistently examine the dramatic political history of the contemporary Russian capital in the Moscow (13th – 17th centuries) and St. Petersburg (18th – 19th centuries) epochs, in the Soviet period, in the post-Soviet era, and identify its key points and the most pivotal events. Marina Glaser (Kukartseva) is Professor of Philosophy in the Department of International Relations at the National Research University Higher School of Economics, Moscow, and Professor of Philosophy at the Diplomatic Academy of the Russian Ministry of Foreign Affairs, Moscow, Russia.

Dr. ANIL ÇİÇEK

This paper argues that the two capitals of Russia, namely Moscow and St Petersburg, have each played a unique and defining role in the birth and development of the ideologies of Westernization and conservatism in Russia. With their distinctive characters and way of lives, the two cities constituted two poles in Russian political history as well as literature and art. The paper tries to give the reader a brief picture of the both cities from an architectural, cultural, historical and above all political and ideological perspective. Thus, in an attempt to explore the different roles the two cities played in Russian political history, the paper takes a brief look in to the history and dynamics which shaped the distinctive ideologies of the two capitals. Finally, the paper tries to make a clear identification and comparison of the character and roles of the two capitals in Russian political life and history.

Gordon Hahn

Dr. Anil Cicek

This book, written by Marina Glaser and Ivan Krivushin, aims at explaining one of the most important features characterizing contempo- rary Russia: the development of a vertical power. In doing so, the authors apply a different cultural, traditional, historical and geographical variables in determining the Russian structure of power. In recent literature, the main analyses have focused on the institutional setting that paved the way to the centralization of power in Moscow, with little reference to the role of social and cultural cleavages in shaping Putin’s Russia. The purpose of this work is to study the capital of Russia, the city of Moscow, as a space of the political, with emphasis on the opposi- tions in the country—capital and power, and Russia, Moscow and the Kremlin. The key questions are: to what extent can one trace the influ- ence of Russia’s population (regions) and the inhabitants of the capital itself on the processes taking place in Moscow? Where is the limit of such influence? And how can Russia’s paradoxes (Sakwa 2020) and the cultural legacies of the past be better understood? In this regard, I shall outline the operational notions and terms.

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Discrimination in the Labor Market Essay

Introduction, market oriented approach, the embedded approach, point of agreement, the future of impacted groups, works cited.

Though a lot of effort has been dedicated in ensuring that discrimination along any ideology is eliminated, discrimination is still perpetrated in various sectors of the economy. Studies show that in the American labor market, equality is yet to be achieved. Minority groups still account for a very small percentage of people employed.

The majority of the unemployed people come from the minority ethnic groups including the African-Americans, the Spaniards and the Latinos (Royster 37). This kind of discrimination has been there since time immemorial and is expressed in different forms including wage difference, and allocation of employment opportunities.

As a result, there are two schools of thought, the market oriented perspective and the embedded perspective, which try to explain the racial discrimination in the labor market. Though these two schools of thought have great differences, they concur on some explanations.

The market oriented approach argues that the disparities in the labor market are normal results of the forces of demand and supply. According to this approach, the market has ways of balancing itself and these will always cause disparities (Waldinger and Michael 85).

The minorities lack the required experience and expertise to carry out some duties thus, compelling employers to look for the best alternative. It should be noted that each employer is out to maximize the returns from each unit of input and will, therefore, employ only the best suited inputs including human capital. In addition, it is argued that people from the minority races are few in number. Therefore, it is quite natural that they will be statistically few in various sections of the labor market.

Instead of the minorities complaining about being unable to get certain employment opportunities or earn a specific salary, they should react to information from the market. Consequently, they should invest and train in professions where salaries are high because these professions are highly valued (Vallas, William and Amy 210).

On the same note, they should advance their education standards so that they can compete favorably with the others. Notably, the market oriented perspective is against any artificial interference in the name of balancing the labor market, arguing that this will cause inefficiency. As long as, the minorities are not ready to embrace the reality in the labor market, the elite class will continue to control resources thus leading to further discrimination (Waldinger and Michael 218).

On the other hand, the social embedded perspective argues that discrimination in today’s labor market stems from traditions that have been passed down through generations. The cultural values that are passed to each generation come with vested interests, which sometimes surpass the individual feeling that one may have towards a given ethnic group or race.

According to this perspective, the decline of social ties among people has paved way to social conflicts with the economically strong white group wanting to control the industrial economy (Royster 106). As a result, racial discrimination has emerged, though in a different form from what people were used to. The state has painfully added legitimacy, through its bureaucratic institutions, to actions which seem neutral but are actually improved forms of racism.

Proponents of this perspective argue that discrimination that is witnessed nowadays has its roots in the traditional social structure. Additionally, discrimination has been known to occur not because of the racist ideologies per se, but as a result of impartial circumstances.

Furthermore, the inherent practices of colonialism and privileges and traditions exercised by small white people have enhanced discrimination against minorities (Royster 108). In this regard, socially embedded perspective depicts that social norms to which people subscribe make it really hard for minorities to access labor.

Society is so vividly similar to what it was traditionally and cases of stereotyping are still prevalent. Therefore, some people have negative attitude towards certain races just because the race was considered inferior in ancient times (Vallas, William and Amy 198). Moreover, the society is also divided into economic and political groups where the superior groups still look down upon the inferior groups leading to discrimination.

Despite the two schools of thought having different views on the explanations of racial discrimination, they both agree on some points. To begin with, the two agree that lack of skills play a vital role in enhancing discrimination in various sections of the labor market. In this regard, it is argued that the minority groups have for a long period not taken education seriously (Royster 69).

Consequently, when employment opportunities arise it is found that the minority races cannot favorably compete for the same. The two schools of thought, therefore, agree that minority races also bear the blame of allowing discrimination in the labor market.

Another point of concurrence is that class distinction exists within the society and this still influences people’s decisions and actions. There are mechanisms in place which contrary to their objectives, only serve to separate the minority from others.

Instead of saving the minority from racist activities, these mechanisms deepen the miseries of minor races by exposing them to discrimination (Waldinger and Michael 229). In order to ensure that they increase their incomes and maintain their status quo as well, the ruling class will ensure the proletariats are not economically empowered. Therefore, the ruling class discriminates against other people to take care of their vested interests.

Discrimination is a reality that cannot be assumed in our society. Its there within our vicinity, and in one way or another it affects each one of us. It is very unfair to other people if they are eliminated from certain competitions just because of their skin color. The fact that one belongs to a given race does not make the person superior or inferior.

Unfortunately, the efforts put in place to eliminate discrimination are not doing much in curbing the vice and more needs to be done. Social embedded perspective argues that discrimination results from the basic structures of the society (Royster 105). Consequently, to eliminate discrimination the basics of the American society need to change.

People must be educated to get over their stereotypes and evaluate all people objectively. Minimization of the income gap is important to eliminate class distinction and thus avoid various causes of discrimination.

Since the market oriented perspectives argues that disparities witnessed are due to action of the market forces, it will be crucial to consider what the market requires. In this regard, it is upon the minority to invest heavily in education and thus enhance their employability.

On the same note, the minority need to join labor unions which will enable them to fight for better payments as well as their rights (Vallas, William and Amy 243). However, the government also needs to intervene and institute laws which will ensure that people with the same qualifications are paid equally regardless of their skin color. Essentially, it is a combination of strategies that will help in eliminating discrimination present in our society.

Royster, Deirde A. Race and the Invisible Hand: How White Networks Exclude Black Men From Blue-Collar Jobs . Berkeley: University of California Press, 2003. Print.

Vallas, Steven P., William Finlay and Amy S. Wharton. The Sociology of Work: Structures and Inequalities . New York: Oxford University Press, 2009. Print.

Waldinger, Roger and Michael I. Litcher. How the Other Half Works: Immigration and the Social Organization of Labor . Berkeley: University of California Press, 2003. Print.

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"Discrimination in the Labor Market." IvyPanda , 10 Dec. 2019, ivypanda.com/essays/discrimination-in-the-labor-market/.

IvyPanda . (2019) 'Discrimination in the Labor Market'. 10 December.

IvyPanda . 2019. "Discrimination in the Labor Market." December 10, 2019. https://ivypanda.com/essays/discrimination-in-the-labor-market/.

1. IvyPanda . "Discrimination in the Labor Market." December 10, 2019. https://ivypanda.com/essays/discrimination-in-the-labor-market/.

Bibliography

IvyPanda . "Discrimination in the Labor Market." December 10, 2019. https://ivypanda.com/essays/discrimination-in-the-labor-market/.

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Advancing social justice, promoting decent work

Ilo is a specialized agency of the united nations, schoolchildren discuss future of work: an essay contest in baku.

On 14 June 2019, the Ministry of Labour and Social Protection of Azerbaijan held in its premises an awarding ceremony of the essay contest on the topics of the ILO Centenary and the Future of Work. Schoolchildren from Baku took part in the contest.