The term ‘labour market’ is applied to the framework within which employers seek suitable employees to help them operate their businesses. As with materials and supplies, described in the previous section (3.3.2), a market is in equilibrium when the price level is such that supply is balanced by demand. In the labour market, the price is the wage level that is offered by the employer and is accepted by the employee.
Three aspects of the labour market are described further in the following sub-sections:
- The wage level that employers can afford to offer is affected by the productivity of the labour force (22.214.171.124).
- The employee’s bargaining position is affected by individual personal circumstances and by the employer’s alternatives to offering work in that situation (126.96.36.199).
- The government can intervene in the labour market by setting minimum wage policies (188.8.131.52).
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