Labor market in conditions of perfect and imperfect competition. Labor offer for the enterprise provided perfect competition in the labor market in the context of competing

Perfect competition in the labor market Presums the presence of four main signs:

1) the presentation of demand for a certain type of labor (i.e., on employees of specific qualifications and profession) a sufficiently large number of companies competing with each other;

2) the proposal of its work by all employees of the same qualifications and profession (i.e., incoming some non-competitive group) independently of each other;

3) the absence of any one association from both labor services ( monopsony ) and their sellers ( monopoly );

4) the objective inability of demand agents (firms) and agents of proposals (employees) to establish control over the market price of labor, i.e. forcibly dictation wages .

Consider first the dynamics demand and offers Labor on the market perfect competition With regard to a separate company (Fig. 11.8).

Fig. 11.8. Labor offer and demand for him for a separate company in the context of competing

The schedule shows: with perfect competition, firstly, the proposal of labor is absolutely elastic (straight s l parallel to the abscissa axis) and, secondly, limit costs The labor resource (MRC) is constant and equal to the price of labor, i.e., the salary rate (W 0). The reasons for this type of schedule of the proposal are obvious: the firm ¾ the perfect competitor is so small that changes in demand for work on its part do not have any influence on the market. No matter how much it hired workers, she will have to pay for them the same ¾ already established in the market ¾ wages and, therefore, with the same limiting costs, that is, SL \u003d MRC \u003d W 0.

For a company, it is advantageously increased to hiring workers up to the number L 0, the corresponding point of intersection of lines of supply and demand (B), when the magnitude of the limit costs for labor (MRC) will be equal to maximum monetary product (MRP). The shaded area of \u200b\u200bthe figure OABL o corresponds to the total income of the company, where one part of it (the area of \u200b\u200bthe rectangle OW about BL O) forms its total salary costs (the salary rate W 0 is multiplied by the number of employees of L o), and the other (triangle area W 0 AB) acts as pure income (profit) from the use of labor resources.

When moving from a separate company to the industry, which is the entire collection of firms, the schedule of supply and supply of labor will take another form (Fig. 11.9).

Fig. 11.9. The proposal of labor and the demand for it for the industry in the context of competing

Here you can see the intersection of multidirectional curves of supply and supply at the point of equilibrium, where the equilibrium payroll rate (W o) is formed and the equilibrium number of employees (L o). It is this particular thing at the level at the level of the industry in relation to the firm acts as a market reality, or a givenness that the one has to take a bad.

In the conditions of perfect competition, the classical laws of market self-regulation is directly manifested. At the point of equilibrium there are equally missing both excess and the shortage of labor (the demand is exactly equal to the proposal). And this means that there is neither unemployment With its negative social consequences, no shortage of working arms, which leads to a decrease in labor motivation, reducing the demands of the management of firms to personnel, etc. Equilibrium is sustainable: feedbacks are quenched by random deviations from it. Thus, the increase in the labor price (on the chart to the level W 1) leads to an increase in the supply (up to the value of L S) and reduce demand for labor (up to the value of L d). An excess of the supply of labor (L s\u003e L d) occurs. A part of those who want to go to work does not find vacancies, competing begins, during which employees agree to a reduced salary, just to be hired. Gradually, labor price is reduced to the initial level.

We emphasize that the equilibrium is achieved without any external (for example, state) interventions: each company hires exactly so many workers as it is necessary to maximize profits, and therefore is not interested in violating it. In conditions of imperfect competition, this happens not always. In the real practice of management on labor market (As, by the way, in the market of any other product) strict adherence to all the principles of free competition are rarely observed. And yet close to the perfect labor markets exist, including in our country.

The demand for work is the number of workers who are ready to hire manufacturers at a certain point at a given salary level.

The main feature of demand for the labor is that it is derived, i.e. The employer is needed not by itself, but in order to produce specific goods and services. Therefore, the demand for labor is determined by the situation in the commodity market and persistently responds to growth or fall in buying demand and to change production technologies. Since labor is not the only factor of production, it also depends on the state of the capital market.

In the context of competition, the technology, the volume of capital used and its price is fixed. Thus, the employer, taking a job or dismissing workers, is guided by the main criterion for the activities of a private firm - profit maximization:

p \u003d PY - WL-RK\u003e MAX (P, W, R, K \u003d const),

where P is the price index; Y - production volume in physical terms; w is the level of salary; L is the volume of labor used; R - capital price; K - capital volume.

That is, MP L · p \u003d W, or MP L \u003d W / P; MP L is an extreme product of labor in physical expression (so many units of products gives the last hired unit of labor).

The limit product in physical terms, multiplied by the price of goods P (p \u003d const in the conditions of perfect competition) is MRP L. This is a limit product in value terms: MRP L \u003d MP L · Mr \u003d MP L · P, because Each additional unit of goods is sold at a price P (in conditions of perfect competition, the income from each next unit of MR products is constant and is equal to P). It means that an entrepreneur benefits to increasing the amount of labor used until the MRP L \u003d W ratio (as can be seen, is a known condition for the maximum income of the maximum costs MRP \u003d MC, since in the conditions of perfect competition, each next unit of labor will be cost to the employer smoothly w).

According to the law of the limit productivity of factors, the dependence of the limit product of labor on the number of hired workers can be represented by the MRP L curve (Fig. 8.10).

Fig. 8.10. The dependence of the limit product of labor on the number of hired workers

Usually, in the theoretical models of the labor market, only the part of the MRP L curve is used as a curve of the MRP L, which has a negative slope, i.e. It characterizes the firms that have already taken a sustainable position in the market and those who have passed the short-term stage, when each subsequent employee works more productive than the previous one. Thus, in fact, taking into account the law of reducing the utmost utility of production factors for most firms with a fixed amount of capital, the work of each new employee is all less than more productive, and the standard line of demand function for labor DL \u200b\u200b(DL / W \u003d MRP L \u003d MP L · P) with The parties of a separate competing firm always have a negative tilt (Fig. 8.11).

Fig. 8.11. Demand for work on the part of a separate firm in the context of competing

With a specified equilibrium level of salary w e, the optimal amount of labor resources for the employer - L E. At the intersection point W E and L E, the necessary equality is achieved: W E \u003d Mrp L.

In modern conditions, the equation for the demand of the competitive firm will be corrected by the action of non-market factors (for example, the state intervention or trade union activities).

The firm, buying work on the competitive market, which is a monopolist in the commodity market, faces an inclined demand curve to its products: producing more products and services, it is forced to reduce the price, and (if this is not a discriminatory monopoly) the price decreases to all products. And this means that the MR income from each of the next sold units of labor will be lower than the price of this unit, therefore, the MRP \u003d MR L · MR curve will have a coolest slope compared to the DL demand curve determined by the ratio W \u003d MP L · p. That is, for the commercial monopoly MP L · Mr< MP L · p при любом уровне занятости (рис. 8.12).

Fig. 8.12. Demand for work on the part of the commercial monopoly

The company-monopolist, as well as a competing company, guided by the principle of maximizing profits, hires workers at a given salary level W E. In this case, the same ratio of MRP L \u003d MC L and for a monopoly should be performed: MP L \u003d Mr \u003d W E. Thus, the result of the introduction of a monopoly on the commodity market will be a decline in employment at the equilibrium level of wages WE, asked by a competitive labor market, the number of employees employed will decrease with L E to L M.

Thus, once again confirmed the inefficiency of the monopoly not only in the production area (decline in the issue and rising price), but also on employment in the labor market.

In the economy there are cases when the company acts almost the only employer of the labor force in this Labor Market: This situation is characteristic of small local markets (for example, a single hospital or school in a small remote town). In a similar case, the employer is called a monoponist.

The difference between the monoppsies company from the competing company is that it faces an inclined supply curve in the labor market (in contrast to the expense curve in the labor market for a competing company whose curve offers is a horizontal straight line w \u003d W e). So, hiring an additional employee, the firm is forced to increase his wages, and, if it is not a discriminatory monoplication, it will have to add a salary to everyone hired before. Therefore, the additional costs of MC L will always be higher than the wage W, and the curve of limit costs in this case will be located above the extentual curve S L (Fig. 8.13).

Fig. 8.13. Proposal of labor and limit costs for monoppsies

The monoponist-employer decides for itself the same task of maximizing profits, but for him this task turns out to be more difficult, because The level of salary depends on the volume of employment. As shown in Fig. 8.14, a monoponist firm, striving to fulfill the "golden rule" equality of the limit costs of limit income, will hire L M of workers and will pay them the same salary W M (in accordance with the labor supply curve).

Fig. 8.14. Demand for work by monoppsies

If there were no monoppsies in this market, competitive equilibrium would be achieved at point A. It is obvious that the level of employment, and the salary of the monoponist is lower than the corresponding values \u200b\u200bfor the competitive market. Thus, the monoplication, like any monopoly, is economically ineffective. There is a redistribution of "exilek" of the seller and the buyer (employees and employers): the monoponist instead of the arrival of DGA gets CGFB, employees instead of HAD receive HCB. There is a direct damage to employees, but, in addition, the monoplication reduces the efficiency of the economy as a whole: the BFA triangle is the so-called "loss of dead cargo", and those who lost their work (L E - L M) workers could produce products in the volume L M FAL e. The result is a fall in employment, salaries, production volumes.

In the long run, the firm can change technology, buy more perfect techniques, modernize production, in a word, change the amount of capital used. Suppose the firm changes the volume of capital in the conditions of perfect competition, i.e. price p., the salary w. and banking bid r. are specified. Maximizing profits, the entrepreneur is trying to increase the volume of production as possible at fixed production costs (or minimize costs at a certain issue level), which can be expressed as a ratio of MP L / W \u003d MP K / R.

By changing the relationship K / L., the employer is guided by the ratio of the utmost utility of these two factors of production, comparing it with proportion w / R.. limit costs. Therefore, any changes in labor or capital prices, while maintaining their former productivity, will necessarily lead to an increase or drop in employment. Or with an increase in the productivity of one of the factors of production, the volume of demand for labor will change if the prices of factors are unchanged.

Thus, in the long term, it is possible to observe the effect of substitution, i.e. The entrepreneur has a raised resource replaces the price for which the price is unchanged. So, with wage growth, it becomes beneficial to replacing labor labor, it means that the effect of substitution reduces employment. Therefore, in the chart, the demand curve for labor in the long run has a coolest slope relative to the horizontal axis. In the short term, when an entrepreneur cannot replace labor labor, employment declines not as sharply with wage growth (only the effect of scale is valid), in the long run period the possibility of such a replacement and the employer appears, seeking to maximize profits, reduces labor, replacing its capital ( Fig. 8.15).

Fig. 8.15. Demand for labor in long-term (a) and short-term (b) periods

If the simple models are displayed to use the company in the production of only two factors - labor and capital, then in reality production factors may be more, for example, land, NTP. If we talk about the labor market, many tenants use workers of different levels of qualification, which can be reflected in the construction of a demand model for labor. If the production is employed highly qualified and low-skilled workers, these two groups are considered as two different factors. Maximizing profits, the employer will use the work of both categories in such quantities so that MPL 1 / MPL 2 \u003d W 1 / W 2 proportion was performed, i.e. The ratio of limiting products of the two these categories should be equal to the ratio of their salaries. Obviously, a more productive and more "cheap" employee is more attractive for the employer, but not always one category can be replaced by another: such a interchange rate is determined by many factors of production (for example, the technological process). If employees are interchangeable, then the growth of salaries in the same group will necessarily lead to an increase in labor demand in another group. In this case, the factors L 1 and L 2 are substitutes. If the increased salary of employees of one group leads to a drop in employment in another, then such groups are complement (that is, in response to the rise in prices of one factor, the demand for both at once).

Market demand for labor. Market demand for work does not develop from the set of demand for the labor of individual firms. Let's turn to the schedule (Fig. 8.16): The graph (a) presents a typical curve of demand for work for any of n.- the number of firms; It is defined by the function of the form W \u003d MP L · P; R - the price of goods is considered to be given for the competitive market.

Fig. 8.16. Building a curve of demand for labor

Suppose that the equilibrium salary was established initially at W 1. Demand n."The firm for labor with such a salary is equal to l 1i, which means that the total demand for work will be equal to the sum of all l 1i for n. firms.

The graph (b) shows the horizontal summation of all points, similar to the firm for the company A. Point C, thus, belongs to the market demand curve. What happens when salary decreases to W 2?

The fall in salaries in all enterprises of the industry will simultaneously lead to a decrease in production costs and, as a result, in the conditions of free competition will cause the price of the price of goods (P ® P). This means that the demand curve for work for each company is included in the industry will be shifted. As a result, the change in employment caused by a salary drop with W 1 to W 2 will not be so significant for each company as at a constant price level p. For a separate company, as can be seen on the schedule, the number of employees will grow to the level of L 3, but not to L 2, as it was possible to expect. Accordingly, producing horizontal summation at the wage level W 2, we must add all values \u200b\u200bof L 3. Thus, the inclination of the cumulative market demand curve D L ¢ will be greater than with a simple summation of individual curves of the hiring firms D L. However, it is clear that the curve of market demand for labor has the same features as the individual demand curves: it always has a negative slope, i.e. With the growth of salaries, employment will fall, and vice versa.

Elasticity of demand for labor and laws of industrial demand.An important indicator in assessing demand for work is its elasticity of wages, or, as it is called, its own elasticity of demand. The coefficient of elasticity shows how much percent changes the demand for work when salary changes by 1%:

That is, with the growth of salary, the required number of man-hours is always reduced, and on the contrary, with a drop in salary, it grows; Obviously, the elasticity coefficient is always negative. More precisely, it takes values \u200b\u200bfrom zero (then they say that demand is absolutely non-ielastic, and the graph of the demand function looks like a vertical line) to minus infinity (in this case, the schedule takes the view of the horizontal direct, then they talk about the absolute elasticity of demand for work). If the elasticity coefficient in the module is greater than the unit, demand is elastic if less than units - inelastic:

\u003e 1 - elastic demand,< 1 – неэластичный спрос.

It should be noted that elasticity is always measured in the vicinity of a certain point belonging to the demand curve for work, and at different points this indicator will be unequal. During economic research, scientists are interested in a certain point and its surroundings, for example, a market equilibrium is violated as a result of trade union activities or as a result of state intervention. It is necessary to analyze the consequences, the reaction of employees and employers, employment and salary. In this case, estimates of the elasticity of demand in the vicinity of the equilibrium point are carried out; To speak about the elasticity of the entire demand curve incorrectly.

The elasticity of demand for labor labor is determined by the four laws of derived demand, or, as they are also called, the laws of Hicksa Marshall. So, the elasticity of demand for labor on the salary will be the greater than:

- the demand for final products is more elastic;

- higher elasticity of occupational replacement by capital;

- more percentage of work in total production costs;

- Above the elasticity of the proposal of other factors of production.

These laws explain why trade unions are always stronger in those sectors of the economy, where labor demand is less elastic.

In addition to the coefficient of own elasticity in economic studies, the indicators of the so-called cross-elasticity of demand for labor are also widely used. For example, the coefficient of elasticity demand for labor price of capital is equal:

Unlike its own elasticity of demand for labor, this coefficient showing how sensitive labor demand for capital price can take both positive and negative values. It depends on whether labor and capital are in this production complementary or replacing each other factors (complements or substitutors):

\u003e 0 - substitute factors,

< 0 - факторы–комплементы.

As studies show, in most cases, low-quality labor and capital act as substitutes, while highly qualified work, on the contrary, complements capital. It is important to understand that the value of the coefficient of cross-elasticity depends on which effect acts stronger with the increase in prices - the effect of the scale of production or the effect of substitution. For example, the growth of the salaries of low-voltage workers will cause the trend of their substitution highly qualified (if the salary of the latter and their productivity is unchanged). Then production costs will grow and the release will be reduced. So, as a result of the action of the replacement effect, the employment of more qualified workers should grow, and as a result of the effect of the scale - to reduce. The result is ambiguous, which is why the cross-elasticity coefficients may have different signs.

If it is necessary to know how the price of one production factor changes when the number of other factor changes, they say the cross-elasticity of factor prices. Consider the formula:

where ¶w j / w is the percentage of the salaries of another category of employees; ¶L j / l j - percentage change in the volume of production factor J.

Knowing this indicator, as in the previous case, gives us an idea of \u200b\u200bwhether the factors are substitutes or complements: if p ij< 0 - факторы-комплементы, p ij > 0 - substitute factors.

Estimates of the cross-elasticity of salaries of individual categories of workers are very important, because Allow to answer the question of how the level of immigration affects, with which countries periodically face, at the standard of living of the local population. There are two polar views on this problem: on the one hand, the flow of immigrants, consonant performing unattractive work for the local population for a lower fee, releases more qualified workers for more productive labor, where they can fully utilize their knowledge and skills; In this case, the flow of immigrants increases the productivity of local labor, and these categories of workers will be complemented in the labor market. However, at another point of view, the influence of immigrants on the labor markets of the local labor force is negative - the salary decreases, unemployment is growing. The standard of living falls, i.e. The cross-elasticity of salaries of local workers is negative, and immigrants and local workers act as factors substitutes. According to research recent years and statistical data, there is no significant reduction in salary in the host market. This is due to the mobility of the labor force within the country.

Do you miss a glooming tribe? He asked suddenly. Shcherbataya slowly covered her eyes

A. Are the activities of trade unions for the labor market?

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Ayrton Senna: Driving in rain and complex conditions - Chapter 8

The demand for factor (work) is derivative - it depends on the demand for the product produced in the industry.

On the competitive labor market, the equilibrium wage and the level of employment are determined by the point of intersection of the curves of supply and demand (Fig.

Fig. 8.2. Equilibrium on the competitive market of labor

Labor offer and demand for the work of a separate competitive firm

For a separate company, the market salary rate performs in the form of a horizontal direct supply of labor (Fig. 8.3).

Fig. 8.3. Equilibrium in the labor market for a separate company

Since the salary rate for a particular company hiring workers in the labor market, acts as a given value, the proposition curve S L \u003d MRC L is completely elastic. As its demand curve, the MRP L curve appears here.

The company will receive the maximum profit if it hits such a number of workers at which MRP L \u003d MRC L.

The company hires new employees only until its limit revenue from the product (MRP L) is equal to the limit costs for the resource (MRC L), in this case.

Determinants demand for labor

1. Changes in product demand: with other things being equal to the conditions, the increase in the demand for the product increases the demand for the resources used for the production of this product, while the decline in demand for the product leads to a decrease in demand for the resources required for its production.

2. Changes in performance: with other things being equal terms, the change in the performance of resources also causes a change in demand for a resource, and the derivative change is in the same direction as the initial, which is causing it. Performance may affect:

The number of other resources used;

Technical progress;

Improving the quality of resources.

3. Changes in prices of other resources.

If the replacement effect outweighs the effect of production, the change in the price of the resource causes the same change in the demand for the replacement resource.

If the effect of product volume exceeds the substitution effect, the change in the price of the resource causes the opposite change in demand for the replacement resource.

The limiting profitability of the product on the factor (work), or the limiting factor revenue - this is an additional income that will receive a company from using another, additional, resource units:

This value determines the demand for work.

Market demand for work is the amount of sectoral demands of various sectors of the economy.

The elasticity of the market (sectoral) demand at the salary rate is determined by the formula

The proposal of labor is determined by the salary rate, which is equal to the marginal value of labor (these are additional costs for hiring an additional unit of labor). The company, maximizing its profits, will hire new workers, while each new employee brings an additional revenue exceeding its salary rate, i.e. MRP L\u003e W and MRP L \u003d MRC L.

Profit will be maximum under the condition MRP L \u003d W.

The decision to hire will be determined by the equilibrium demand for labor and labor proposal in these wage rates.

Labor offer for the enterprise in the context of competing

In a completely competitive labor market, the company is one of the many labor services offered by many vendors (employees). Therefore, a separate enterprise cannot affect the price of labor and perceives it as a determinant market.

This means that the Curve of Labor Offers £, in a completely competitive market, has a view of a horizontal line passing through the market rate of wages, since the supply of labor in these conditions is absolutely elastic at a price (Fig. 13.5).

In the face of perfect competition in the labor market, the average labor costs (ACL) and the limiting costs for an additional unit of work coincide with the invariable salary rate. With a constant salary rate, the company can hire so many employees

Fig. 13.5. Curve suggestions for the enterprise in a completely competitive labor market

how much he will need. The same applies to the individual industry if this industry is not the main employer in the region or in a separate specialty. Although for a separate industry, the horizontal curve SL, rather an exception than the rule.

Offer labor for the industry

As a rule, large sectors of the economy are the main consumers of the hired labor of a certain qualification or specialty. For example, the coal industry is the only employer for miners, and at Steelhelov there is a demand for the metallurgical industry. In such conditions, the curve of the proposal of labor will have a positive (ascending) tilt (Fig. 13.6).

The reasons causeting an upward slope of the supply curve of the industry:

1) Exceeding the effect of free-time replacement effect working (labor) over the income effect due to from

Fig, 13.6. Labor supply curve for industry

the setting (increasing) of the salary rate, manifested in the fact that as the wage rate increases, the proposal of labor increases not only from the already occupied, but also those who abandoned work at a lower salary rate (students, students, pensioners , women who look after children, old men, patients, etc.);

2) Industries with a high payroll rate become attractive for employees of other industries with a smaller rate. Since the total number of economically active population (labor) in the short term is unchanged, "overflow" workers in highly paid industries determine the lack of waged labor in comparison with capital in industries with low payments. The investigation of this is an increase in the utmost product of labor in low-paid industries, which forces enterprises of these industries to increase wages;
3) an increase in the alternative value of labor utilization for employees of other industries.

Labor offer across the economy

World experience shows that an increase in the wage rate determine the increase in the supply of labor, i.e., the curve of the economy is as a whole positive (ascending) slope. If we assume that the increase in the wage rate will have a steady tendency towards growth and in the future, then upon other things, the proposal curve would have the type of SL, (Fig. 13.4, b), since the increase in salary several times with the same (saturated) The volume of economics consumption would lead to a reduction in working and an increase in free time. But the NTP during this time, most likely, will offer many new economic benefits, the existence of which we did not have the slightest presentation. To get these new benefits, employees will increase the proposal of labor again.

The proposal of labor at the level of the economic system as a whole is the subject of the study of macroeconomics.

The problem of education for the price of a resource is a microeconomic problem. Therefore, let us return to the micro level.

Market balance and equilibrium of enterprises on the competitive labor market

Market balance in the labor market is set at the point of intersection of the market demand curves for labor (DL) and the market supply supply (SL) (Fig. 13.7, a).

From fig. 13.7 And it is clear that the equilibrium point E corresponds to the equilibrium rate of wages ω and the equilibrium level of employment L. equilibrium in fig. 13.7, B reflects the state of complete and efficient employment.

Full-time - The situation in the economy, in which everyone who wants to offer on the equilibrium price established by the labor market (salary rate) of a certain amount of labor can realize their desires. Even when the efficiency of the equilibrium volume of employment V in the economy will have full employment. This is explained by the fact that an excess of the labor force in excess of L will form a natural unemployment rate, meaning that the number of owners of labor resources remaining voluntarily unemployed, they do not want to offer labor at the equilibrium rate Ω than L.

Effective In the volume of L, employment is because at the same time its employment level The limiting product of labor is equal to the maximum cost of the last unit of labor, i.e.mrpl \u003d MRCL.

It is clear that the demand of a separate enterprise in the labor market is insignificant compared to the market. Therefore, due to the fact that neither an enterprise nor an employee can affect the equilibrium salary rate Ω, they must adapt to it.

As mentioned above, in the competitive market, the labor supply curve L for the enterprise has the appearance of a horizontal line passing through an equilibrium payroll rate, which, in turn, is the result of the interaction of SL and DL curves.

The equilibrium scale of the enterprise (Fig. 13.7, b) is determined by the rule of optimization, which for a competitive enterprise has the form Vmpl \u003d Mrpl \u003d Ω.

As can be seen from Figure 13.7, B if the revenue curve from the implementation of the utmost product of labor (MRPL) is above the limiting curve for labor, the enterprise is interested in increasing the number of hired labor, which will ensure that the profit increases it, since each additional unit of labor will bring more income, than costs.

If the curve DL \u003d MRPL is below the SL -MRCL curve, then the cost of an enterprise for each additional unit of labor will exceed income income from using an additional unit of labor. Under these conditions, the company will dismiss employees until it reaches the equilibrium state at the point of intersection of SL and DL curves, where MrCl \u003d MRPL.

Equilibrium on the sectoral labor market. The role of sectoral labor markets in the economy

Equilibrium on industry labor markets is established at the point of intersection of sectoral curves of demand for labor DL \u200b\u200band SL labor supply.

Due to the fact that some industries are rapidly developing, while others - more slowly or come into decay, one should consider the mechanism of "overflow" employees from some industries to other and understand the consequences of such changes in the employment structure.

- first, the labor market connects and makes interdependent even those sectors of the economy that are not technologically related to each other;
- Secondly, the increase in wages in one industries determines in the short term a decrease in employment and production volumes in other industries;
- Third, the transition of hired workers from some industries to others becomes possible due to the mobility of the work of the "Labor" resource.

For a completely competitive labor market, the following properties are characterized:

In each industry, there is a significant number of firms competing with each other for the right to hire a specialist;
There are a large number of specialists of a certain profession that have equal qualifications, and each of them, regardless of others, offers its services in the labor market;
Neither a separate firm nor a separate worker is able to influence the wage established in the industry.

Based on the general laws of demand for the resource, in the context of perfect competition, the company will make demand for the resource until the value measurement in monetary terms it employs units of labor does not compare just work, those. Equality will not be performed until

P.l. \u003d Mrp.l.

For each firm downward part of the curve MRR is a demand curve.

The demand curve for work from the entire industry is the result of horizontal summation of the curves of the demand of individual firms. This means that the values \u200b\u200bof the magnitude of individual demand are summed up at the same price values.

By definition, the proposal curve reflects the ratio between the price and the number of goods that will be offered on the market. For a completely competitive labor market, each point of labor supply curve in the industry shows what a remuneration should be paid to a specific employee so that it proposes its services to its services. In the context of competing, all points on the proposal curve correspond to the costs of the whole society on the hiring of an additional worker in this industry, or, in other words, the limiting costs of the industry for labor as a factor of production (Mrc.).

Therefore, in the context of competing competition in the labor market in this industry, equilibrium level of wages (W.) I. equilibrium amount of employed labor resources, Defined point of intersection of the sectoral curve of demand for labor (curve Mrp.) and labor supply curve (curve Mrc.):

MRP \u003d MRC.

This equality is a condition for maximizing profits from labor use as a factor of production. Visually this situation is presented in Fig. 15.2.

Fig. 15.2.

Each company of this industry will hire workers based on the sectoral level of wages.

At the level of salary in the conditions of the market, differences in elasticity indicators of labor supply For different categories of workers: the proposal of qualified labor is less elastic compared to the proposal of unskilled labor. The more qualified work will be, the proposal becomes less elastic and the proposal curve will have a sharper nature, and therefore will be higher than the equilibrium level of wages.

Demand has a similar effect on the level of wages: when demand increases and the curve is shifted to the right, the wage level increases. When demand decreases, objective conditions appear to reduce wages.

In addition to market factors, there are also non-market factors affecting the level of wages. Among them, regional differences and government regulation of the minimum wage, duration of the working day, overtime, age restrictions, etc. can be distinguished.

Labor market in conditions of imperfect competition

As mentioned above, the labor market may be monopolized both by the demand and from the supply side. We first consider the imperfectly competitive labor market, monopolized by demand.

Monopsony, or the labor market on which the only employer is valid under the following conditions:

a) the labor market interacts, on the one hand, a significant number of qualified workers who are unconnected into the trade union, and on the other, either one large monoposonist, or several firms united in one group and speakers as a single employer of labor;
b) this company (group of firms) hires the main part from the total number of specialists of some kind of profession;
c) this type of labor does not have high mobility (for example, due to certain social conditions, geographical disunity, objective restrictions for obtaining a new specialty, etc.);
d) The monoponist firm itself sets the salary rate, and the workers are forced to either agree with such a bid, or to look for another job.

Labor market with elements of monoppsumia is not rare. Such situations often add up in small settlements, where only one large firm is valid - the employer of labor. For example, it may be a small city with one city-forming enterprise, and it is usually referred to as monogeard.

What is the feature of the monoppsony and what will it give entrepreneurs? With a completely competitive labor market, entrepreneurs have a wide selection of specialists, labor mobility absolutely, any firm hires workers at a constant price, and the labor supply curve in the industry reflects the limiting costs for additional attraction of a resource (labor).

In the conditions of the monoppsies, the Montopsonist personifies the entire industry, so the demand curves for work for the company and industry coincide. In this case, for a separate Montopsonist company, the curve of labor offerings shows not the limit, but the average value of labor costs, i.e. For monoposista labor proposal curve is an average resource cost curve (Arc), not limit.

Since the labor supply curve for the industry has uptaking, as the attraction of an additional employee from another industry requires an increase in wages for this worker, then for a monoponist company, the values \u200b\u200bof average resource costs increase.

This means that for it, the magnitude of the limit costs for labor is superior to the average costs (salary).

Example. If the monoponist firm hires N.1 \u003d 4000 workers at the rate W.1, \u003d 400 rubles, then hired ( N.1 + 1) -Ho working at the rate W.2 \u003d 410 rubles. It will mean that she must pay the same bid to the workers already hired, otherwise labor conflicts await it. Therefore, the limit costs for the MongopSonist firm on the hire ( N.1 + 1) -Ho worker will be not 410 rubles, and 40 410 rubles. (10 rubles. 4000 - additive already hired N.1 \u003d 4000 workers, plus 410 rubles paid ( N.1 + 1) -mu worker).

Taking into account the above, it can be concluded that the curve of limit costs for the monoposistian company passes above the labor supply curve.

But any company maximizes the profit when it lines the limit revenue obtained as a result of hiring an additional unit of resource, with limit (and not average) costs of the resource. In terms of monoppsies, this means that the equilibrium wages W.M and the number of employed workers N.M of the monoponist firms differ from the values \u200b\u200bW) and N.x, installed at a completely competitive labor market (Fig. 15.3).

Fig. 15.3.

With a completely competitive labor market, equilibrium values W.x I. N.1 correspond to the point E.x intersection curves demand for labor D. and labor suggestions S. For the industry.

If monoppsumonium arises in the labor market, the curve of supply for the industry turns into a curve of the proposal of the company monoponist and reflects the average cost of the company for work, i.e. The level of wages she should pay each employee. Montopsonist equalizes values Mrp. and Mrc. At point E.M, hiring N.M workers and paying them a payroll rate W.M.

Note that in the conditions of the monoplication curve D. Not a curve of demand for work, because for a monoponist company it is impossible to build a demand curve (Similar to the fact that the monopoly can not be built the proposals curve).

As follows from fig. 15.3, the monoponist will always hire less workers ( N.M. < N 1) and pay them a lower wage ( W.M.< W.1) than in the conditions of a completely competitive labor market.

We estimate the consequences of the monopreconization of the labor market from the point of view of the MongopSonist, workers and society as a whole. Hiring N.M workers, a firm, if it had been operating in the conditions of perfect competition, was supposed to pay a worker's work rate equal to; The total payments of the workers (the total cost of the company on the hatred) would be determined then by the area of \u200b\u200bthe rectangle. Setting the bid. W.M, the company potentially "plays" at the working rectangle, which goes to pay other factors of production (profit, percentage, rent).

Thus, the monoponist firm increases its profits. For the workers, the emergence of the monoppsum will turn loss N.1-N.M jobs and salary reduction with W.1 BE W.M. Because N.1 -N.M workers will not be occupied in the industry, then from the point of view of society as a whole, the loss will be the area of \u200b\u200bthe triangle Me.m. E.1.

Models with a trade union. Another option to monopolize the labor market is a monopoly on the part side, when a strong trade union has been created in the industry, which becomes the monopoly "seller" of labor by entrepreneurs.

First, consider a simpler model, when the trade union in the industry is opposed by many firms that do not act together.

Trade unions solve many issues related to the protection of the rights of their members, but still the main task of the trade union is to increase the salary rate. To present how the trade union is achieved to increase wages, turn to the situation characteristic of a completely competitive labor market (Fig. 15.4).

With perfect competition in the labor market, an equilibrium payroll rate is established W.1, on which in the industry is hired N.1 workers.

If the trade union is united only by qualified specialists and will perform a unified group, "selling" the work of its members, then we can consider such a situation as a classic monopoly. Then the sectoral demand curve becomes for the trade union of the medium revenue curve ( ARP.), and the curve of his limit revenue ( Mrp.) goes below the curve D.

Point T. Crossing curves Mrc. and Mrp. Determine the number N.2 members of the trade union employed by the industry at the payroll rate W.2. In the conditions of constant demand for labor in the industry, a decrease in the number of people employed is equivalent to a reduction in labor supply.

Fig. 15.4.

It should be noted that in developed countries, a way to increase wages by narrowing the proposal is quite often applied by trade unions. This is achieved in many ways, for example, by making legislative acts entering special licenses to occupy a certain type of professional activity (doctors, lawyers), creating other barriers to entry into the industry (the need for retraining, license fees, delivery of qualification exams, etc.). In recent years, this process can be periodically observed even in the developed European economies, where there are strong closed trade unions.

A little different situation will be in the labor market, if the union is united by all employees of the industry, from highly qualified to unqualified. As a rule, in this case, the trade union resorts to the method of establishing a minimum wage W.3 above equilibrium W.1 by threatening the announcement of the strike. If entrepreneurs agree with the salary rate at the level W.3, then formally for them, the curve of labor offerings turns into a horizontal line W.3V, those. The proposal of labor becomes absolutely elastic to the point V. If the demand for work will expand further, then hiring workers over N.V should entail an increase in wages. Point E.3 Crossing the curves of demand for work and its suggestions for the industry will determine the number of employed N.3. At the same time in fig. 15.4 values W.2 I. W.3 Selected arbitrarily for clarity of the presentation.

The fact that the increase in wages by reducing the supply of labor leads to a reduction in employment and potentially threatens the emergence of unemployment, causes anxiety from trade unions.

A more efficient way leading to the growth of wages, and to an increase in employment, is expansion of demand for labor. This can be achieved if:

a) the demand for goods manufactured in the industry is increasing, i.e. using this resource (labor);
b) labor productivity increases in the industry;
c) prices are growing for substitute resources.

The first task of the trade unions can solve, for example, using advertising of goods of their industry. The solution of the second task is achieved with appropriate agreements with employers. It is possible to achieve raising prices for substitute resources, supporting the struggle for increasing the minimum wage in industries, where workers are employed, ready to potentially replace the working industry. However, trade union opportunities to achieve expansion of labor demand are limited, therefore trade unions in order to increase wages more often resort to a reduction in labor supply.

Negative wage increase effect, i.e. Reducing the number of employed in the industry, can be reduced if the demand for work will be less elastic. The lower the elasticity of demand for labor, the less employment is reduced in the industry with one and the same increase in the level of wages. Elasticity of demand for labor depends on the availability of substitute resources. If the trade union is influential enough, it can resist the use of resources that replace labor.

Strictly speaking, the introduction of a minimum wage has a similar impact on the labor market W.mIN at the state level: by analogy with the "floor" prices in the commodity market. In this case, overboard the cumulative employment will be part of the country's working-age population, primarily unskilled workers who agree to propose their work at the payroll rates below the minimum law W.min. In an effort to reduce unemployment, the state will act the same methods:

First, initiate an increase in demand for labor (for example, in many countries the state programs for creating jobs are accepted);
Secondly, strive to reduce the supply of labor: to prohibit the use of child labor, reduce the duration of the working week, reduce the minimum age and work experience to retirement and others.

Double monopoly on the labor market. There may also be such a unique situation in the labor market, when a single trade union (monopolist - the seller of labor), uniting the industry workers, is opposed by a monoponist company (labor buyer).

In other words, the monopoly of the sentences in the face of trade unions faces a monopoly of demand for labor in the person of the monoponist. Since the main task of the trade union will be a desire to increase wages, and a monoponist firm, possessing market authorities, establishes a salary below the equilibrium, then the real level of wages will be determined by the degree of monopoly authority of the trade union and monoppsies.

A strong, organized trade union, enjoying other trade unions, is able to achieve a wage level exceeding monopsonistic and even equilibrium levels. On the contrary, a major monoponist firm in the conditions of a broken working movement is able to reduce the wage rates below the equilibrium. As a rule, in the conditions of a double monopoly, trade unions and entrepreneurs seek to conclude collective agreements that are mutual compromise.

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