1. LABOUR ECONOMICS Dr. Gayatri Gupta

2. The central theme of economic science relates to the optimum utilization of resources to achieve maximum consumer satisfaction through the production processes. There are four factors of production: Land Labour Capital Entrepreneurship Of all the four factors of production labour is very special.

3. Some amount of labour is absolutely necessary to compliment other factors of production. Labour not only generates income but also consumes the output. Labour economics may be desired as a body of systematic knowledge which deals with the pricing, allocation and development. Labour economics analyses and seeks to understand in detail labour market situations in a manner that economics as a whole cannot afford to.

4. The term labour means any work whether mental or manual done by human beings for some monetary consideration. IMPORTANCE OF LABOUR ECONOMICS Man power planning Labour organisation Labour relations and public policy Wage and employment theory Collective bargaining theory Practice of social security and welfare

5. Concepts of Labour – Commodity Labour – during this time labour was affected by law of supply and demand. – Machinery concept – during this time labour was regarded as operating organisms – Goodwill concept – during this time there was a more liberal approach. – Humanitarian concept – during this time some basic rights were recognized – Citizenship phase – here workers or employees are recognized with a right to be consulted – Concept of Industrial Democracy – here the employee and the employer consider themselves as partners

6. Industrial Evolution Stages 1.Hunting and fishing stage – during this time there was no economic, political or social system hence there were no labour problems. 2.Pastoral stage - this was marked by some economic acting leading to conflicts among hard owners 3.Agricultural stage – this brought about the class systems of the have (s) and have-nots

7. 4.Handicraft stage – this marked the beginning of labour problems as merchants accumulated wealth 5.Workshop stage – during this time there was production in large scale leading to strains between employees and employers. 6.Modern factory system – this led to an exodus from country to town creating new labour problems. 7.Industrial revolution – this began in England and brought an end to the closed economy creating enumerable problems which have not been satisfactory solved.

8. Peculiarities of Labour as a Factor of Production 1.Labour cannot be stored 2.Labour cannot be separated from the labourer 3.The worker sales the efforts but retains the ownership 4.Bargaining power of labour is weak 5.Labour is not only a factor of production but also an end to production 6.Only labour can object to working conditions and disrupt production 7.Labour is not so mobile 8.Rapid adjustment to the supply of labour to its demand is not possible 9.Labour is a human factor and therefore not only economic but moral and social consideration should be taken into account.

9. Demand For Labour:- In labour market, demand for labour is made by individual firms, which want to employ labour to carry out their production. It means a firm is a buyer in the labour market. Unlike demand for consumer goods, demand for labour is a derived demand.

10. Demand for labour depends on the following factors 1.Demand for commodities produced by labour 2.Availability of Capital 3.Substitution between labour and machinery 4.Motives of the firms 5.Labour productivity 6.Wage rate

11. Supply of Labour Supply of labour refers to the number of labour units offering themselves for work. Supply of labour is normally measured as the number of person-hours (or person-days) which workers are willing to offer at the market wage. Factors, which influence the supply of labour in a country or to the economy as a whole:-

12. Supply of Labour 1.Size of population 2.Rate of working population to total population 3.Working Hours 4.Age of Retirement 5.Social Attitude 6.Wage Level 7.Potential Desire to Work 8.Training Period