Essay on Labor Market Demand and Supply: The Crucial Component of Any Economy

Introduction

Labor markets is the supply and the demand for labor in the job markets. In this case, the organizations (employer) demand while the employees provide for the supply. The demand and supply of labor is the major component of any economy, and it provides for the availability of goods and services for the smooth running of the economy of any given state. The demand for labor defines the countries level of employment that may either negatively when the demand for labor is too low or positively affect the economy when the demand is too high. In the flexible labor markets, the entire population feels the excellent taste of the economy by setting up standards of employment. At the macroeconomic level, the demand and supply for labor is determined and affected by several activities, such activities that are social economic and also affect the economy of such a country (Ndou & Gumata, 2017). Such factors include domestic economic factors and international market dynamics.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Tight labor markets are experienced when the economy is perfect, and cases of unemployment are very minimal, making recruitment of new employments difficult hence putting pressure on working wages and requirements. In an ideal economy where it is almost full employment, there is an increase in output by the organizations for the companies to meet the high demand for products. In contrast, when the economy is close to full employment, organizations find it hard to recruit new employees because there is a shortage of laborers in the marketplace. In such a situation, the economy favors the employees as there is a demand for increased wages and improved working conditions. Organizations in such an economy try to fight for the available employees for them to meet the high demand for their products in the market.

In microeconomics, there is loose labor markets, employers interact freely with employees and have the freedom to exercise their authority of firing and hiring employees their way and the way the think benefits their organizations. In loose labor markets, employees are faced with many challenges like wage cut by the employers, long working hours, and unconducive working hours. In such markets, organizations are not afraid of the possible consequences and scenarios that would arise from the employees' boycott of duties as they are assured of the source of an employee from the outside world. In states where there is loose markets, the level of unemployment is very high. Employees are desperate to have available opportunities. The relationship between the demand and the supply of employees influences the working hours and the compensations they get from their working in wages and salaries (Gumata & Ndou, 2017). In such markets, employees are also denied other benefits like the holiday and the leave because of the hash economy of such a country.

Skills and demand for employment

The skills of the job and employment are depended on the kind and the level of employment that the economy creates for its population. In modernized countries, the skills will rotate around technological advancement and the need for competitive production. The increasing demand for labor by organizations calls for the polarization of labor markets that motivates high growth in the high and low skilled jobs. The economy apparatus determine the kind of skills required in the labor markets (Lloyd, 2016). In situations where the economy of a state is poorly performing, the skills demand by the economy are poorly entangled as the main activities in such countries is the handy jobs. The situation further affects the labor market demand in that individuals find it hard to progress to high-skilled opportunities from the low-level opportunities because of the vacuum created in the middle-level occupations.

Skillful demands in countries like the United Kingdom is motivated by factors like demographic change, trade liberalization, and technical change. Technological advancement in information and communication has enabled employers to source the employees from across borders hence polarizing UK's tight labor market. With technology, employees can access skillful employees from far borders that are cheap to maintain than the UK's employees. In such a situation, the market is polarized, turning a tight market into loose (Lloyd, 2016). The recent Brexit exit vote was motivated by the employees to claim that immigrants were taking natives' opportunities. In the recent past, the unemployment rate in the UK has increased because of sourcing employees out of borders.

Trends in the contemporary labor markets in the United Kingdom

The last decade was marked with an increased labor market polarization because of the increased immigrants into the country. The immigrants' labor is cheaper to access, and they also easily comply with the laid down organizational policies avoiding a breach of their stay in the nation. The polarization has increased the performance of the labor markets from the perspective of the fallen to a now growing market. In 2008 and 2009, the labor markets in the United Kingdom have had experienced that stringent fall of the Growth Domestic Product that negatively pushed the markets to corners in the wake to source more laborers form the outside world. Comparatively, the labor market in the United Kingdom is more stable and organized that the neighboring countries in Europe. In the last decade, the United Kingdom has experienced a decent growth in Growth Domestic Product that has been directly reflected in the labor markets. Crepon et al. 2012 discussed that online gambling creates more employment opportunities in countries like the United Kingdom, China, the United States, and India. He also noted that the provisions in law and regulations controlling gambling industries direct the labor markets provided and available in the gambling industries (Van der Laan & Ruesga, 2019).

There are also trends in the gambling industry that interfere with the labor markets. Trends that affect the labor markets include the consolidation aspects in the industry, expansion of the business-to-business model, and entry of new organizations in the market with better strategies to perform in the industry like a casino (Gumata & Ndou, 2017). Online gambling is an institution in itself that is comprised of many industries and institutions. In the United Kingdom, the growth of online gambling marks the importance of labor markets in the gambling industry. The United Kingdom's economy has been developing tremendously to a state of sustained recovery. This has affected the economic structure of the country that has further evolved, making economic development to increase (Lloyd, 2016). All of these factors affect labor markets. In this sense, the rate of unemployment has increased in the country as the economy deteriorates.

The United Kingdom labor market has encountered challenges resulting from the productivity level among the employees in the same industry experiencing competitive development. In such a situation, the rate of high-level skilled employees is meager in the competitive markets (Gumata & Ndou, 2017). The competition in the labor markets has expressed the need for outlined principles to define market requirements and to enhance market flexibility.

The differences between tight labor and loose labor markets.

In tight markets, the number of jobs is always high than the available employees on the other side. In loose labor markets, employees are elevated more than the number of opportunities available. In the first scenario, the firms and employers compete for the available employees, and they offer handsome compensations to lure employees to work with them. This happens as the organizations want to meet the demand of their products that is available in the market. Employees in the loose labor markets are greatly challenged as they do not get all benefits from been in employment. Compensations of their working is retorted as they also experience low wages and salaries (Lloyd, 2016). In the United States, for instance, there is labor markets have been gauged by economic health by evaluating the output per hour by the employees. The output is evaluated and measured to show how much labor employees produced in such a market. However, it is notable that the economy of the United States has greatly risen because of the use of technology in supplementing labor markets to achieve something meaningful in the production sector. In the United States, however, the output generated per hour has not shown or reflected on the wages or salaries paid per hour. Workers are producing more goods and services per hour unit in the United States more than they are compensated. When accessing the United States, the labor market index unemployment grew with 0.7% from 2001 to 2015. On the other hand, the production rate exceeded 2%, this is to show that while the country is having a close to perfect economy, it does not have a close to full employment, and thus the labor markets are still loose (Gumata & Ndou, 2017).

In tight labor markets, employment status is almost full, while in loose labor markets, the rate of employment is high in such economies (Lloyd, 2016). Tight labor markets are available in countries where there is perfect economies; thus, the late of employment is very low, considering the economic development expressed in such economies. In these markets, they are affected by labor skills as the firms are after laborers and not the quality of their skills. The tight labor markets enable employees to enjoy various benefits resulting from economic development, and they also work for considerable hours with huge compensations and benefits.

In most cases, the tight markets happen in the microeconomic states, where labor markets in supply and demand is analyzed at organizational (employer) and employees level. In such scenarios, employee wages increase as the number of hours they work. In tight labor markets, there is no employee will accept to work voluntarily for underpaid jobs. They are after the wages they receive from their employers and not the quality of work or services they offer. They mostly mind getting payments. Tight labor markets do not involve employees working to gain experiences or training. They are after the salary and not afraid of offering poor services because there is a shortage of employees, and the organizations are desperate enough to acquire and their services. In the Tight labor markets, employers will offer handsome compensation to the employees to win them from other firms (Lloyd, 2016). An employer is willing to offer her/his services to a firm offering $10 an hour than the one that is offering $5 an hour. In the loose labor markets, the employees are ready to settle for any salary.

The influence of labor markets in labor resources and talent at the organizational level

Human resources operations in any given organization are affected either directly or indirectly by the labor market forces. Brand building in the HR department has become a business strategy in most institutions. Organizations are investing more in Human Resources operations within the organization to ensure high organizational productivity (Lloyd, 2016). The process of the Human Resource in the procedure of labor recruitment and selection the organization is affected by labor supply in the market. The integration of talent in labor has also increased at an organizational level as many organizations look upon making the excellent use of the best talents available.

In tight markets, organizational are forced to recruit by training the available laborers and keep upgrading their salaries to enhance their stay at the organizations. An example is that most organizations would prefer prom...