Dual Labor Market

Neo-classical Labor Market Theory Assumptions: A relatively free and open market exists in which individuals compete for position. Position in that market depends heavily on the individual’s efforts, abilities, experience, training, (e.g. human capital). There are automatic mechanisms that operate in the marketplace to ensure that imbalances between one’s input (human capital) and one’s rewards (wages) are corrected in a way to restore balance.

The ideology of individualism: supports the idea that a person should be rewarded to the extent that s/he contributes to the society (like Davis and Moore). EX: The more skills you have to offer, the greater your value to any employer, the greater the demand for one’s services and the higher the wages. (Education, training, skills and IQ are critical in determining individual’s wages. Change these and change your wages.) Critical component: the combination of supply and demand in the market and one’s resources determine what your wages in the market will be. The market is always moving toward an equilibrium.

Question: why are women and African Americans paid less?

Dual Labor Market Thesis Assumptions: The private economy is split into two major sectors. The labor market is divided into two parts. Mobility, earnings and other outcomes for workers are contingent on place in the labor market. A systematic relationship exists between race, gender and position in the labor market. Examples: Poor are members of a separate market—outside the central economy. Demands only refer to certain types of positions. (These skills (education) not directly tied to jobs). Range of jobs open to minorities, for instance, may be very narrow. Greater likelihood of being under-employed.

Secondary Labor Market Secondary Labor Market—(Peripheral or Competitive Sector) Smaller, more labor intensive, low productivity per worker, more local markets, not in control of a stable produce (restaurants, gas stations, grocery stores) Job instability and a lack of good skills, non-unionized, low wages, poor benefits. More quit jobs due to this type of market. People of color and women more likely to be found here.

Separate Markets strengthened by: Primary Labor Market: Stability, high wages, good working conditions, greater degree of internal job structure and unionization. (Core or Monopoly sector)—tend to be large , capital intensive, high productivity per worker, national and international markets (auto, railroad, steel, airlines) Internal Labor Market: Open to people already existing w/in labor market and open to those outside only at select points. Separate Markets strengthened by: 1) retaining people who have been carefully trained in large firms 2) unions in some and not in other industries 3) federal legislation.

https://www.bls.gov/cps/demographics.htm#age

https://www.bls.gov/opub/ted/2010/ted_20100809.htm

2016 Employed Persons detailed by Industry and Age https://www.bls.gov/cps/cpsaat18b.pdf