MARKET FOR LABOUR LABOUR MARKET IN EQUILIBRIUM SL 0Q = Actual employment Q-QF = Voluntary Unemployment W No involuntary Unemployment DL QF Q Actual employment Voluntary Unemployment

MARKET FOR LABOUR LABOUR MARKET IN DISEQUILIBRIUM SL Involuntary unemployment W W Voluntary Unemployment DL QD QS QF Actual employment

MARKET FOR LABOUR LABOUR MARKET IN DISEQUILIBRIUM SL W W SHORTAGE DL Voluntary Unemployment W W SHORTAGE DL QD QS QF

INSTITUITIONAL & SOCIAL CONSTRAINTS Labour markets like other markets will tend to return to equilibrium’ However, this does not happen because of barriers put in the Market place. These barriers could be either placed by GOVERNMENT regulations like: Minimum Wages or 2) Regulations regarding workplace safety 3) LABOUR UNIONS: They tend to pressure the wages to remain at higher levels. These wages are known as ‘STICKY WAGES’ as they are not allowed to fall below when the market forces require it to.