00:00 Hello, welcome to this lesson. My name is Cornelius and I will be taking you economics SS1.

00:16 And in this lesson our topic is labour markets.

00:20 Now in this lesson we are going to be looking at the concept of labour force,

00:24 the efficiency and mobility of labour, and factors that affect the size of the labour force.

00:29 Now what is the labour force?

00:33 The labour force can be defined as the total number of persons available to supply,

00:37 the labour required for the production of economic goods and services within a country or state.

00:43 It can also be defined as the total number of working-age persons within states who are able and willing by law to work.

00:53 The labour force comprises of all persons who have jobs and those who are seeking for jobs in the labour market.

01:01 Now when we talk about economic activities, we talk about production, we talk about who are we going to produce for.

01:07 Now we have to go about this production, we need the human resources to put into the production process.

01:14 And that's what we refer to as the labour force.

01:16 So the people that are available to go into the production processes or the production and bring about the resources or the goods and services that will supply to the consumers and the economy, those people account for the labour force.

01:29 Now in most countries the working age that determines the labour force is 18 to 65.

01:36 So people from 18 to 65 are those we record when we are discussing labour force.

01:43 Those who are working and are within this age range.

01:46 So we have people who are working but outside this age range will not count them as part of the labour force.

01:52 Now what is the labour market?

01:54 We talked about the labour force, we say that the people that are going to do the production processes.

02:00 So the labour market refers to the institution or arrangement through which buyers and sellers of labour come in contact to buy and sell labour required for the production of goods and services within the labour market.

02:12 It is in the labour market that wage rates and other conditions of service are determined and agreed upon.

02:22 That is the labour market, the exchange of labour services, the demand.

02:27 Those who have the supply that is workers meet with those who need that supply.

02:32 That is the defence, the industries.

02:35 And when that exchange goes on, that is what we call the labour market.

02:39 Like we said in our definition, it is in the labour market that we define the wage rates, how much we are going to pay for the labour that is going into the production.

02:47 And what the conditions of service, the things that would facilitate the production, how the labour force is going to be treated, would define all of that in the labour market.

02:58 Now we move on to efficiency of labour.

03:02 Efficiency of labour may be defined as the ability of labour to produce maximum output within a given period, working with a given quantity of inputs.

03:13 Now we have established in this course, in this subject, that resources are limited and we have to make the best use of those resources that we have.

03:23 Now efficiency of labour is saying, how can we get labour to produce, giving the resources that we have, how can we get labour to produce the highest possible output.

03:32 That is what we discussed when we were talking about efficiency.

03:35 Now we say increase in efficiency is usually expressed in terms of increase in output of labour within a shorter period of time, without any fall in the quantity of goods and services produced.

03:46 So what this means is, if we can get labour to reduce the amount of time that it takes to produce the specific quantity.

03:55 So for example, if it takes five men, say six hours to build a foundation of a house, and then those same five men can now build that same foundation in say four hours.

04:05 It means that without reducing the quality of the foundation of the building, it means that there's an increase in the efficiency of that labour.

04:16 If labour is efficient, the quality of goods and service produced will be high, and if labour is inefficient, we have the reverse as the case.

04:25 Now what factors affect or determine efficiency of labour? The first one is education and training. If the labour force is not well trained or well educated, then we cannot get the best out of them.

04:39 If we're using our dated means of production, or if we're using means that the own give us the highest possible output, then labour is not going to be efficient.

04:54 Efficient management is another factor that affects efficiency of labour. So when management is able to structure the production process well, and we see this in factories.

05:05 For example, we have chain processes. The product moves from here to this portion and this is done. When management is able to create that system where the production process is seamless, then we have an efficient labour force or an efficient labour in our production process.

05:22 Now the next point is job satisfaction. If the members of the labour force are not satisfied with the work that they are doing, if the terms of service are not enough, we talked about conditions of service and when we said labour markets, we define the conditions of service.

05:36 Now with those conditions of service are not really good. If for example the change over time and the labour force is no longer pleased with the conditions of service, it will affect the productivity level.

05:47 So job satisfaction is an important factor that affects efficiency of labour. Division of labour, we talked about division of labour when we discussed division of labour and specialisation.

05:59 Now if the work can be broken into component parts and which will now make the work move faster, but we decide to keep it and have one worker do the work from start to finish, then we're going to have a very inefficient labour.

06:12 Because we can actually produce more than what we are getting for the labour that we are putting in. Then the next point is worker skill level.

06:21 Now if the workers are not highly skilled or if their skill level is not up to the standard that we want for the goods or service we are trying to produce, then we're not going to have an efficient labour force.

06:34 Because we're not going to be able to get the highest possible product or service out of that labour force. And the next point is workers health status.

06:43 If the labour force is not healthy, then we cannot produce at optimum. We cannot get, we don't have an efficient labour force.

06:53 Now we move on to the next concept which is mobility of labour. So what does mobility of labour mean? It refers to the ease of movement of labour from one location to another or from one occupation to another.

07:07 So when labour can move with ease from where they are to their desired point, labour is the human element of production. So when labour can move with ease, then that is what we are discussing or not going to refer to as mobility of labour.

07:22 And there are types of mobility of labour. The first one is the geographical labour mobility. So this refers to the ease with which labour can move from one location to another while pursuing the same type of work.

07:34 So for example, a doctor living who works in Lagos can move to Abuja and still continue to practice as a doctor. That is geographical mobility.

07:44 The next type of mobility or the second one is occupational mobility. So this refers to the ease with which labour can move from one occupation to another occupation.

07:54 For example, an accountant leaves her accountant practice to take up a job as a computer programmer. So that is occupational mobility. You move from your current occupation to a new one too.

08:07 Now let's look at the factors that affect the size of labour force. So what are those things that define labour force? We've already established what labour force is. So what are those factors that define labour force?

08:18 The first one is the retirement age. So we said labour force accounts for those people who are actively working or who can work.

08:28 So if the retirement age sets or defines those who get counted as part of the labour force, so where the retirement age sets will define the size of the labour force.

08:39 For example, if the labour force is set at the retirement age that I set at 16 and we have a huge number of actively working people above 16, then they do not count. So we have a lower labour force.

08:54 Now the school living age, the average age at which people finish a round of their education programme will also define the size of labour force. If it takes longer for people to complete their education, then it means that we are going to have a shrunken labour force because we are waiting for people to finish their education.

09:13 Another point is immigration. So immigration refers to people that leave their current systems or their current state or their current nations.

09:23 So when people begin to leave or people begin to come in, that also affects the size of the labour force. If people move out of that country, then labour force shrinks. If more people come into the country, then labour force increases or grows.

09:37 Now, working hours, this is also another factor that affects the size of the labour force because if the working hours are decent, then we have more people who are willing to supply the labour that is required.

09:48 If the working hours are not good, so this also comes into the discussion of conditions of service. So the conditions of service are good, then we have more people that are willing to provide them or to lend themselves as available to work.

10:00 But if the conditions of service, in this case working hours, is not good, then or is not desirable, then we have fewer people who would want to be a part of the productive process.

10:12 Then the population size, the population is the total number of people that are in that country or in that state.

10:19 So if the population is where we draw the labour force out from, the population is small, then the labour force is also going to be small.

10:29 So for the factors that affect the size of the labour force, now I have an exercise for you, two questions.

10:36 The first one is, discuss seven factors that hinder the geographical mobility of labour, seven factors that hinder the geographical mobility of labour.

10:47 So we talked about the two types of mobility, occupational and geographical, so I want you to give me seven factors that hinder geographical mobility.

10:54 The second one is, again, seven factors that hinder occupational mobility of labour, and that will be all for this lesson.

11:03 Thank you, I'm Cornelius. Till next class.