The economy is defined as the wealth of a country to produce and utilize goods to meet the day-to-day needs of people. The presence of labor markets determines the capability of the country to produce goods and supply them to the society.
When the international exchange of goods is high in a country, the labor markets will grow and produce a large workforce.
The value of gross domestic product also affects the labor market. Economic stability is used to describe the financial situation of a nation whose outputs show minor fluctuations. This is highly predominant in developed countries like the United States, which is gifted with the best markets, education and employees. In developing countries, the rate of output growth switches from time to time.
The growth of labor markets is also dependent on the qualified education system offered by a country because the best education will provide the best laborers in the markets.
When the ratio of demand to the supply of commodities becomes constant in labor markets, there is substantial growth.
Characters of the labor market
The characters of labor markets include the fluidity of cash, interactive workforce, meeting supply and demand needs, and bargaining power.
The fluidity of cash is defined as the flow of cash transactions that happens between suppliers, laborers and employers in the job market. The starting point of cash will be from the employers who make their capital investment to run the business. The employees will be involved in the process of manufacturing goods that needs cash for production. Finally, the suppliers deliver the finished products to customers and receive cash from them.
A major characteristic of labor markets is the interactive workforce where an employer orders an employee to do work to meet customer requirements. As the interaction becomes stronger, more goods are produced from the company side. Less interaction in the work environment causes less productivity.
The labor markets work in supplying goods to customers to meet their demands. When the demand is high, the capital and the material resources needed will also be high. When the demand is less, the necessity of supply and production also decreases.
Bargaining power comprises the most important characteristics of the labor market where the employers bargain for the labor and the laborers in turn bargain for the suppliers. The employers bargain to have more laborers to work for them. In the same way, laborers will bargain with the suppliers to supply the ordered goods by the customers. Apart from this, the power of bargain can be also seen among customers when they demand a particular product or service from the market. In this way, bargaining power plays a crucial role in the functioning of labor markets.
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