APPLIED ECO: Labor and Employment (4TH QUARTER)

• Labor refers to the exertion of human effort to aqcuire an income. Human exertion includes physical and mental exertion.
• LABOR AND THE INDIVIDUAL ARE INSEPERABLE means a man working for wages cannot seperate his physical self from his labor if he wants to enjoy the comfort of another room.
• LABOR IS PERISHABLE means that the labor is incapable of being stored. Labor that is wasted is lost forever.
• LABOR SUPPLY DOES NOT CHANGE QUICKLY means that the supply of labor increases steadily as population grows. When there is a great demand for labor in a particular year, labor cannot be made to increase abruptly.
• MOST EMPLOYABLE PERSONS DO NOT LIKE TO MOVE means that even if the demand for labor is higher in some places, many people still prefer to remain unemployed.
• Manual Labor is the type of labor that mostly involves the exertion of physical effort specifically the use of brawn and muscles.
• Clerical Labor is considered as next higher order than manual labor. Most parts of the clerical work are done with physical effort; exertion is not as great as that in manual labor.
• Professional Labor is where most of the professions require sufficient training and experience.
• The labor of management are the managers of all kinds and types perform functions. This includes front line managers like supervisors and foremen, middle managers like branch and area manager.
• Labor of Entrepreneur is the one who organizes the business and sees to it that the business becomes stable.
• The Labor of Inventors are a very important ingredient of economic development is the output of inventors.
• Supply of Labor means it is important to know the circumstances that affect their decisions to make labor available in the market.
• MARKET ACTIVITY and NONMARKET ACTIVITY are the two kinds of supply labor.
• THE SUBSTITUTION EFFECT refers to households will naturally provide some time for nonmarket activites.
• INCOME EFFECT refers to when households wages rate is higher, more income will be available to the households for spending. When the households decides to spend its money on leisure or other nonmarket activity, it reduces the time available for pursuing a market activity.
• BACKWARD-BENDING LABOR SUPPLY CURVE refers to when the households begins to have sufficient income, labor supply tends to decrease.
• Labor is a factor of production that is required by business firms.
• Business Firms are sources of demand for labor.
• Quantity of labor demanded is the total number of man hours (or man day) hired by all firms in an economy.
• Real wage refers to the purchasing power of a given nominal (or money) wages.
• Nominal wage rate is the amount in pesos paid to a worker for a unit of work.
• THE LABOR DEMAND CURVE is a factor that is brought just like any commodity. Price depends on the quantity demanded. To business firm buying the factpr, price is the real wage rate. When the real wage rate increases, the quantity demanded of labor decreases, and vice versa.
• UNEMPLOYMENT occurs when a person who is of the working age, is willing and able ti wirk but cannot find work. It is an economic problem with undesirable social consequences.
• OUTPUT AND INCOME LOSS occurs when a willing and able workers do not find employment, they are deprived of income and economy does not benefit from the output they could have produced.
• DEPRECIATION OF HUMAN CAPITAL refers to the capability to work is reffered to as person's human capital.
• INCREASE IN CRIME occurs when unemployed persons who have families to feed or just plainly have nothing else to do sometimes turn to crimes as a way of having money or something to do.
• HUMAN DIGNITY occurs when a persons suffer of loss of employment for long periods, most of them loss their self-esteem as well.
• UNDEREMPLOYMENT occurs when a person who works either part-time or full-time but which in both cases recieve very little pay.
• Cause of unemployment are RAPID GROWTH OF POPULATION, SLOW GROWTH OF THE ECONOMY, TECHNOLOGY USED, and LACK OF SKILLS.
• SEASONAL UNEMPLOYMENT are some jobs that are seasonal in nature.
• FRICTIONAL UNEMPLOYMENT are those days that the person is not yet working.
• STRUCTURAL UNEMPLOYMENT happens when there are available and willing workers but their skills and training are not those required by the business firms.
• CYCLICAL UNEMPLOYMENT refers to when the demand for worker is lesser than the supply.
• Cause of inadequate wages are INFLATION, LACK OF SKILLS, TOO MANY DEPENDENTS.
• INDUSTRIAL AND LABOR-MANAGEMENT CONFLICT means strikes and lockouts are actions that bring misery to both the employer and the workers.
• ECONOMIC INSECURITIES means workers worry about having a permanent source of income.
• 2 investments in human capital are EDUCATION and TRAINING.
• EDUCATION is provided to the individual usually before employment.
• TRAINING is done when the person is already working.
• CLASSICAL THEORY states that employment increases at lower wages. Such theory further claims that widespread unemployment could be caused only by stubborn refusal of workers to accept low enough wages.