Equilibrium Employment for Firms

Equilibrium Employment for Firms in a Competitive Labor Market In a perfectly competitive labor market, firms can hire all the labor they want at the going market wage. Therefore, they hire workers up to the point L1 where the going market wage equals the value of the marginal product of labor. Derived Demand Economists describe… Continue reading Equilibrium Employment for Firms

Published

The Largest American Unions in 2015

The Largest American Unions in 2015 (Source: U.S. Department of Labor, Bureau of Labor Statistics) In terms of pay, benefits, and hiring, U.S. unions offer a good news/bad news story. The good news for unions and their members is that their members earn about 20% more than nonunion workers, even after adjusting for factors such… Continue reading The Largest American Unions in 2015

Published

Equilibrium Level of Employment

Equilibrium Level of Employment for Firms with Market Power For firms with market power in their output market, they choose the number of workers, L2, where the going market wage equals the firm’s marginal revenue product. Note that since marginal revenue is less than price, the demand for labor for a firm which has market… Continue reading Equilibrium Level of Employment

Published

The Theory of Labor Markets

The Theory of Labor Markets By the end of this section, you will be able to: • The Demand for Labor in Perfectly Competitive Output Markets • The Demand for Labor in Imperfectly Competitive Output Markets • What Determines the Going Market Wage Rate? What is the labor market? The labor market is the term… Continue reading The Theory of Labor Markets

Published

Management Relations Act of 1935

Management Relations Act of 1935 (the “Wagner Act”) Establishes procedures for establishing a union that firms are obligated to follow; sets up the National Labor Relations Board for deciding disputes Social Security Actof 1935 Under Title III, establishes a state-run system of unemployment insurance, in which workers pay into a state fund when they are… Continue reading Management Relations Act of 1935

Published

The Marginal Cost of Labor paper

The Marginal Cost of Labor Since monopsonies are the sole demander for labor, they face the market supply curve for labor. In order to increase employment they must raise the wage they pay not just for new workers, but for all the existing workers they could have hired at the previous lower wage. As a… Continue reading The Marginal Cost of Labor paper

Published