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Economics and Labour

Issues and Concepts

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Work is a big part of our lives Why are you at school? What are they talking about when they talk about

an economic crisis? Can you recall a union job action?

Economics studies behaviour and markets What would an individual do if circumstances

change? Why do we see what wee see? Equilibrium. Labour market is just one of the many markets

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(super short) Introduction to Economics IES! We have preconceptions Economists are just a bunch with common

preconceived ideas = Economics paradigm Unlimited wants Scarce resources Choice is a consequence of scarcity Opportunity cost is a consequence of scarcity Opportunity cost = too important to miss Homo economicus = (smart) maximizer

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Economic systems Traditional economies Command economies Market economies Mixed economies Why mixed?

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Some (a little) more techy stuff Decision makers

Individuals Households Firms

Individuals/households maximize utility Scarcity => maximize surplus

Firms maximize profits Profits = surplus Why profits? “Corporations are people, my friend!” ® Mitt Romney

Marginal reasoning Marginal cost Marginal benefit Marginal revenue

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Labour markets are complex Market equilibrium (a distilled picture)

Demand Supply Equilibrium Efficiency of equilibrium

Institutions A firm as a black box Transaction costs

Internal labour market Long term contracts Labour contracts <= limitations from the government Labour contracts <= limitations from the (national) unions Labour contracts <= limitations from the set of rules/laws

Social forces Traditional economy, eh? Changes in social norms

Women labour market participation: two stories Gender/sex/race/ethnicity/age/citizenship/disability

Have you heard about the US corporations hiring veterans?

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Policies and morals Positive statements vs Normative statements Policy considerations are a mix of positive and

normative