The study of labour economics aims to understand the dynamics and functions of the markets at wage labour. By wage labour, we mean the socio-economic relationship the employer has with his/her employee, where the worker ‘sells’ his or her labour under an employment contract.
Labours markets actually function due to this interaction between workers and their employers, with labour economics looking at the suppliers of labour services of the workers, and the demands of labour services of the employers. It attempts to understand the consequent pattern on wages, as well as employment rates and individual income.
As previously mentioned, within economics, labour is merely a measure of work done by individuals in their work environment and is commonly contrasted against factors of production and capital. There is also such a thing as human capital, which refers to the skills a worker has, rather than his/her actual work.
The act of hiring labour, unlike that of a machine, is necessary but not sufficient enough for the completion of work. By this, we mean an employee has to be motivated to work to an acceptable standard; a standard that allows him to complete his work to the best ability and on time. A small issue perhaps for jobs that are easily completed, but for indispensable job roles that demand higher skill and organisation, creating a setting that suits their needs in order to keep them happy is certainly a high priority.
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