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Economics and Labour

Economics and Labour. Issues and Concepts. Work is a big part of our lives Why are you at school? What are they talking about when they talk about an economic crisis? Can you recall a union job action? Economics studies behaviour and markets

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Economics and Labour

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  1. Economics and Labour Issues and Concepts

  2. Work is a big part of our lives • Why are you at school? • What are they talking about when they talk about an economic crisis? • Can you recall a union job action? • Economics studies behaviour and markets • What would an individual do if circumstances change? • Why do we see what wee see? • Equilibrium. • Labour market is just one of the many markets

  3. (super short) Introduction to Economics • IES! • We have preconceptions • Economists are just a bunch with common preconceived ideas = Economics paradigm • Unlimited wants • Scarce resources • Choice is a consequence of scarcity • Opportunity cost is a consequence of scarcity • Opportunity cost = too important to miss • Homo economicus = (smart) maximizer

  4. Economic systems • Traditional economies • Command economies • Market economies • Mixed economies • Why mixed?

  5. Some (a little) more techy stuff • Decision makers • Individuals • Households • Firms • Individuals/households maximize utility • Scarcity => maximize surplus • Firms maximize profits • Profits = surplus • Why profits? “Corporations are people, my friend!” ® Mitt Romney • Marginal reasoning • Marginal cost • Marginal benefit • Marginal revenue

  6. Labour markets are complex • Market equilibrium (a distilled picture) • Demand • Supply • Equilibrium • Efficiency of equilibrium • Institutions • A firm as a black box • Transaction costs • Internal labour market • Long term contracts • Labour contracts <= limitations from the government • Labour contracts <= limitations from the (national) unions • Labour contracts <= limitations from the set of rules/laws • Social forces • Traditional economy, eh? • Changes in social norms • Women labour market participation: two stories • Gender/sex/race/ethnicity/age/citizenship/disability • Have you heard about the US corporations hiring veterans?

  7. Policies and morals • Positive statements vs • Normative statements • Policy considerations are a mix of positive and normative

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