Labour

Labour – Human resources determined largely by the size of the working population Labour force refers to the physical and mental effort of the working population, which consists of people who are available for paid employment and unemployed people of working age and below retirement age, excluding categories such as full-time students, caregivers, and the long-term sick and disabled. In macroeconomics statistics, the labour force is the sum of all employed or unemployed workers. The size of a labour force can vary between countries. Factors that affect the size include the number of births 16 or more years previously, number of deaths, proportion of individuals working or looking for work, the number of foreigners coming into the country to work and population size. Birth and Death Rate affect the size of labour force such that lower birth rate results in an ageing population in which there is an insufficient number of people to participate or be considered into the labour force. This is evident in many developed countries namely Singapore where there are less and less people in the labour force and have thus embarked on measures to ensure that people work well into their old age to ensure that the economy is good. Such that Singapore is planning to increase retirement age from 62 to 65 in 2012, relative to higher life expectancy. Since labour force refers to employed and unemployed people of working age and below retirement age, the age distribution of a country can also comes into consideration. Singapore for example, would have a decreasing labour force, as it is an ageing population, and the number of employed and unemployed people of working age and below retirement age is getting lower. For example, a country with a large population would naturally have a larger size of labour force as compared to a country with a small population. Also government policies and incentives that are able to attract foreigners to work in the country can affect the size of the labour force. Such that, if the country has a stable government and offers better job prospects to foreigners, foreigners may immigrate and work in that country increasing the size of the country’s labour force. Countries with a large labour force may not necessarily mean that it is doing well economically. This is because the efficiency and productivity of labour in the country may not be high. Efficiency and productivity of labour refers to a country producing the maximum amount of output (consumer goods or producer goods) using all the possible input (resources) at a fast rate. OR Labour productivity is the quantity of output per time spent or numbers employed. Could be measured in, for example, Singapore dollars per hour. A country may have the resources and labour force to produce a certain amount of goods, but it can choose not to produce lesser of a good than what it actually can. This leads to factors that affect a country’s efficiency of labour. The factors include the number of participating labour force (people who are employed and paid for their work), wealth of a country, government incentives,

natural disasters, literacy rate, culture and mobility of labour. Government incentives motivate workers to work harder thus increasing productivity and efficiency. Mobility of labour has various meanings, a few of which are, freedom of workers to practice their occupation wherever opportunity exists to the extent where workers are able to or willing to move between different jobs, occupations and geographical areas, flexibility of trade between countries. Mobility of labour allows the participating labour force to be open to wider opportunities and job prospects. Such as trade relations with other countries can create a need for a certain type or product to be produce, this would increase productivity of labour. Division of labour or also known as specialization is the specialization of cooperative labour in specific, circumscribed tasks and roles intended to increase productivity of labour. Through division of labour, each worker in a firm or company can concentrate on what they are good at and build up their expertise, becoming specialists. Specialist workers become quicker at producing goods increasing productivity of labour as the production per good becomes cheaper because of this, increasing profits. Although it may increase productivity, it is risky because if a country relies only focuses on one production area, when the product is not demanded, the country’s economy may fall, due to little diversification. Also, workers may be less motivated to do work as there is no variety in jobs. The economy of the country may suffer if the sectors of a country are not diversified when the specialised sector fails.