The Price Of Labor Assignment Essay | Economics Homework Help

Various factors affect the price of labor. According to classical economists, supply and demand are the key determinants of wages. This concept is considered a market theory of wage determination (Curtis & Irvine, 2018).  The most essential factor affecting the supply and demand is the number of workers available with regard to the demand. When there are more available workers than the demand, the wages tend to be lower, while when the demand is higher than the available workers, the price of labor increases.

Additionally, the price of labor may be affected by the levels of skills possessed by a worker, and the skill set level expectation by the employer. Persons with high levels of skills are likely to attract higher wages as compared to those with lesser skills.  Another factor that affects the level of wage is the location of the job being offered. Some locations have more stringent conditions or are relatively more expensive compared to others. Such locations will, therefore, require higher wages to sustain the employees (Curtis & Irvine, 2018). Cities with severe conditions ought to offer high wages and remunerations as a way of attracting the right talent.

The interplay of these factors is a crucial determinant of what the employees earn. When negotiating about the salaries, these factors are tabled before settling on the best amount of salary and allowances, a given company can offer a worker. For instance, if the demand for workers is higher than the number of workers available, employers can continuously keep raising the wage offers until they attract more workers. Alternatively, an abundance of workers results in reducing wages until the surplus labor opts to seek for the extra jobs elsewhere. When supply and demand of wages are even, an equilibrium wage rate is established.

 

 

References

Curtis, D., & Irvine, I. (2018). Microeconomics: Markets, Methods & Models (Lyryx).

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The Price Of Labor Assignment Essay | Economics Homework Help . (2022, July 12). Essay Writing . Retrieved August 16, 2022, from https://www.essay-writing.com/samples/the-price-of-labor/
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