Rpm Notes
RPM- Week 2
Theme: wages and salaries and competing models of the labour market
Topic: Competing models of wages and salaries and the labour market (neoclassical, institutional and radical approaches); the impact of competing approaches on policy prescription
Norris (1993:4) identifies that a supply side where individuals (labour) bring forth a diverse range of skills and other characteristics and have different preferences between work and leisure, and hence supply different number of hours of work. in assessing what is known as the demand side, Norris notes 'employers differ in the type of labour they seek. It is the (ideal) task of labour markets to allocate labour to its most productive uses to maximise the output of goods and services and the collective utility of workers.
The most prominent competing schools of thought is neoclassical theory which seeks to explain and assess the distribution of income in efficiency terms. there have been variations within neoclassical theory- in response to challenges to the explanatory power of neoclassical theory. These variations seek to explain discrepancies in economically rational terms regarding labour scarcity
Institutional and radical explanations are also competing school of thoughts. institutional and radical analysts give greater weight to the labour markets institutional features- trade unions, employer associations and industrial tribunals and the concept of power. approaches to the labour market often move between the seemingly objective (how the labour market works, understanding the basis of wages/renumeration) to the perspective and normative (how the labour market should work)
Neoclassical theory
renumeration can be understood through the interaction of the demand for labour (or how much employers are willing to pay), and the supply of labour ( or how much workers are willing to accepts). neoclassical theorist assert that a sophisticated understanding of demand and supply assists
Theme: wages and salaries and competing models of the labour market
Topic: Competing models of wages and salaries and the labour market (neoclassical, institutional and radical approaches); the impact of competing approaches on policy prescription
Norris (1993:4) identifies that a supply side where individuals (labour) bring forth a diverse range of skills and other characteristics and have different preferences between work and leisure, and hence supply different number of hours of work. in assessing what is known as the demand side, Norris notes 'employers differ in the type of labour they seek. It is the (ideal) task of labour markets to allocate labour to its most productive uses to maximise the output of goods and services and the collective utility of workers.
The most prominent competing schools of thought is neoclassical theory which seeks to explain and assess the distribution of income in efficiency terms. there have been variations within neoclassical theory- in response to challenges to the explanatory power of neoclassical theory. These variations seek to explain discrepancies in economically rational terms regarding labour scarcity
Institutional and radical explanations are also competing school of thoughts. institutional and radical analysts give greater weight to the labour markets institutional features- trade unions, employer associations and industrial tribunals and the concept of power. approaches to the labour market often move between the seemingly objective (how the labour market works, understanding the basis of wages/renumeration) to the perspective and normative (how the labour market should work)
Neoclassical theory
renumeration can be understood through the interaction of the demand for labour (or how much employers are willing to pay), and the supply of labour ( or how much workers are willing to accepts). neoclassical theorist assert that a sophisticated understanding of demand and supply assists