EconomicsNotes

  There are a number of ways to refer to the supply of labour. A precise one is that the supply is the number willing and able to work within the market at a set of wage rates for a given time. The supply curve is likely to be upward sloping as the wage required to maximise the hours people work will increase the more work that they do unless there is infinite elasticity of supply. There are across the developed world intense pressures on the supply of labour. In part, this is because of immigration restrictions which place barriers on the movement of people globally, so that national or regional labour markets are inelastic in supply. Another ‘global’ reason is the intense and accelerating decline in birth rates, which fell some time ago, or which are falling, to below replacement rates. This process means that there are fewer young people entering the workforce, and more older people in society. That in turn means that, in Japan, Korea, or Italy, for example, there is a gre...

  The idea of a wage gap is somewhat simplistic. It is undeniable that there is a gap in nominal terms between those who are not formally skilled and those with salaried jobs who hold professional qualifications. The development of the ‘precariat’ is something which tends to run against this idea. Many of those who are formally skilled are highly leveraged, and it is estimated, have so little in savings, and so much in housing, educational, and personal debt, that they are between one and two pay-days away from bankruptcy. Often, those who are skilled live in high-cost areas and rent, rather than own property, whereas some of those who are unskilled live in public housing or their family property with a much lower set of outgoings per month. In addition, many of those classed as unskilled are young, and are living with parents or relatives who can accommodate them. It follows that a wage gap predicated upon technological change which pushes out those in service positions, or wh...