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In case of a competitive market model, the implementation of the minimum wage for all workers would result in a decreased demand for labor force. Therefore, the reduced employment would generate increased unemployment. If the demand and supplies are extremely elastic and sensitive to the legislation modifications, the increase in unemployment would be tremendous.
In the situation of a monopsony, the monopsonist will tend to correlate his employed staff with the established minimum wage rate. As such, if the government sets a minimum wage higher that his implemented salary, he will also tend to increase the number of employed personnel members. This behavior can be explained by the fact that the monopsonist sees himself in a competitive market.
Occupational Health and Safety Regulation
The Occupational Safety and Health Act of 1970 is the most important document regulating the internal conditions at the workplace. The importance of this act is given by the fact that professional activities often pose greater risks that one would estimate. Ensuring health and safety at the workplace however implies additional costs and may as such negative impact the organizational profits. In response to this challenge, managers implement measures which analyze the marginal cost and benefit of job safety. The measures are considered efficient and without major impacts upon profits when the graphic representation of the marginal cost and benefit intersect.
The level of safety and health can also be determined by the employees or the society - this however considers the access to information. If the employees have easy access to all relevant information, their desired level will correspond to the organization's level relative to profit maximization. If on the other hand, the population does not have sufficient access to information, the health and safety measures implemented by the organization will be reduced.
Government as a Rent Provider
The government possesses a more subtle means of influencing the labor market and this refers to the provision of economic rent to the players in the labor market. The economic rent refers to the difference between the wage paid to an employee and the wage he would accept to still be kept in that respective position.
Chapter 14: Labor Market Discrimination
Gender and Racial Differences
The hourly wages of women increased to 80% those of men and are being currently maintained at constant levels. Differences in earning patterns are also observable between whites and Africa-Americans. In terms of unemployment, the gap has been reduced and few discriminatory practices are still available. Discriminatory practices occur in terms of job distribution. The unequal practices can be explained through different levels of education.
Discrimination and its Dimensions
The act of discriminating against someone is defined by the inferior treatment of women and minorities within economic entities, and when this treatment is unfair as all candidates possess similar skills and abilities. There are numerous types of discrimination, the most common ones being wage discrimination (women and minorities receive lower salaries than white males), employment discrimination (women and minorities find it more difficult to become employed), occupational or job discrimination (women and minorities have been prohibited from entering certain fields of work, however equally qualified) and finally, human capital discrimination (women and minorities have a restricted access to activities which would enhance their professional abilities).
Taste for Discrimination Model
This subchapter explains that some employers simply have a "taste" for discrimination - they enjoy the practice however they are aware of its immorality and even illegality. Despite this still, they are willing to pay the price incurred just to be able to discriminate. International trade and outsourcing are offered as examples in support of this theory. Most of the "taste" for discrimination is based on prejudice. If the governments implement laws against discrimination and these succeed, the demand for labor force will increase and the market will meet stability and equilibrium.
Theory of Statistical Discrimination
This is yet another theory which aims to explain discriminatory practices and states that an employer or another authority power will discriminate against one individual based on the characteristics of the group to which he belongs. The features of the repetitive groups are true and objective, but may be untrue relative to the individual considered. A relevant example in this instance could be given by an insurance company offering a teenage male and a teenage female different rates, all other forces being equal. This discrimination is based on the statistical fact that teenage males stand increased chances of getting into a car crash than female adolescents. However, this may not be true in the case of the considered male adolescent.
The Crowing Model: Occupational Segregation
Occupational segregation deals with the historic fact that women and minorities have been offered reduced access to jobs. The crowing model deals with the matter in terms of supply and demand of labor force. The index of segregation shows the number of males who would have to change positions in order for the job allocations to be evenly distributed across genders. T can be measured for all discriminated categories and differs based on numerous features.
Antidiscriminatory Policies and Issues
However several opinions and even studies indicate that what is called discrimination is sometimes based on real and objective criteria, this does not mean that plain discrimination does not occur. In order to reduce it, the federal institution has developed a series of laws. The most important three ones in this instance are:
The Equal Pay Act of 1963
The Civil Rights Act of 1964, Title VII
The Executive Orders (1965-1968)
These policies have had a positive effect on…[continue]
"Labor Economics The Economic Impact" (2008, November 14) Retrieved December 8, 2016, from http://www.paperdue.com/essay/labor-economics-the-economic-impact-26797
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"Labor Economics The Economic Impact", 14 November 2008, Accessed.8 December. 2016, http://www.paperdue.com/essay/labor-economics-the-economic-impact-26797
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