What is labor market

labour market

(external internal). The external labor market is the place where the labor is traded (balancing function between supply and demand of labor), whereby there is no such thing as "the" labor market, but only segmented partial labor markets that are based on occupations, qualifications, gender and location and differentiate in time. The distribution function of the labor market has the task of controlling the individual and also social chances of the material and immaterial shaping of existence or reproductive possibilities of the dependent employees. In economic reality, there is not always a compatibility between the equalization and distribution functions of the labor markets. This is not because the workforce is subject to an obligation to sell and the supply cannot be increased or reduced at will. Due to the subject-related nature of the work, there is a regular restriction in the sale and if the owner of the "commodity" labor is unemployed, it is devalued or worthless. In addition, there is a fundamentally structural buying power on the part of the demand for labor. In contrast to other markets (goods, money and capital markets), labor markets also have a wealth of peculiarities. In particular, property rights should be mentioned here; It is not workers that are bought, but their labor or services that are inextricably linked with them. There are information asymmetries between employer and employee, which means that the employment contract cannot be fully specified. Institutions (trade unions, employers' associations) and legal rules (of individual and collective labor law, etc.) largely determine what happens on the labor markets. In addition, labor markets are politically influenced by different neoclassical (market-oriented) as well as Keynesian or state interventionist labor market theories. In contrast to the external labor market, there is a company's internal labor market. This can relate to a single company or to all companies in a company or to several companies in a group. The area of ​​activity is also important here, so that the internal labor market is delimited within the previous or outside the previous area of ​​activity. When it comes to covering personnel requirements, the internal labor markets include the following instruments were used: overtime, short-time work, postponement of vacation, transfer through internal job posting, notice of change, instructions, qualification measures.

1. Labor market from an economic point of view ("objective" A.): This is understood to mean the totality of economic relationships between providers of and demanders for work. The providers as non-entrepreneurs face business enterprises (organizations in the broader sense) as buyers. Strictly speaking, it is not the workers themselves that are objects of A., but their work; Therefore one should correctly speak of the labor market. It is characteristic that people in this context simultaneously represent subjects and objects of economic processes. In pure theory, labor markets are special factor markets. The formation of wages (price formation) is viewed as a special problem in price theory and is explained with the help of considerations of demand and supply theory. On the other hand, the labor market is also counted "among the most imperfect markets" (Samuelson). The following characteristics are decisive for this: The individual employee is forced to offer his work for reasons of existence (»structural compulsion to sell«; Willeke). A shortage of the supply is at best possible at short notice (organized collective work restriction), the supply is therefore basically rigid. On the other hand, there is a demand that is in principle elastic. Extremely falling wages theoretically lead to an inverse adjustment reaction on the part of providers. The market does not come into equilibrium by itself. Minimum wages (e.g. fixed in a collective agreement) are intended to prevent inverse reactions. The adjustment possibilities of suppliers and buyers are z. B. restricted because of their location. In order to be able to influence the "natural monopoly of demand" (Willeke), employees agree to be able to exercise organized counterpower through association. Labor markets are then shaped by the relationships between employers and workers' associations (bilateral monopoly).
2. Labor market from a business point of view (company-subjective A.): Conceptual summary of all external relationships and interactions with possible employees who actually exist (more effective A.) or are basically feasible (potential A.). From the point of view of a specific economic organization, these market relationships can be segmented according to qualitative, spatial and temporal aspects. The labor market is thus made up of numerous specific / potential sub-markets.

In the health industry:

Market for the production factor labor. This is the market where the supply of work (from employees) and the demand for work (from employers) meet.

In the context of the health market, it is particularly the sub-labor markets for highly specialized activities or professions such as the labor market for doctors, nurses or elderly care workers.

The problem of the health labor market is in particular the lack of balance between supply and demand in certain sub-labor markets (e.g. doctors or elderly care workers). Since a restriction of admission to medical studies according to the expected need is not constitutionally permissible in Germany, there is no possibility of clear planning of supply and demand on the partial labor market for doctors. In the nineties of the last century there was therefore much speculation that there would be a massive oversupply of doctors in Germany in the foreseeable future. However, the actual development turned out differently. Today there is more discussion about a regional shortage of doctors (see below).

Other influencing factors for the supply of labor are in particular the collective bargaining conditions on the respective sub-labor markets. For example, the discussion about working hours for doctors has a significant impact on the labor supply, because many prospective doctors prefer working in the non-curative area to working in a hospital. Working as a resident doctor in structurally weak and / or poorly populated regions is also not attractive enough to find enough candidates to fill medical practices that become available. This has been particularly evident in eastern Germany in recent years.

The health care labor market is no longer restricted to the territory of one state. The free movement regulations of the EU treaty, but also the attractiveness of work opportunities abroad compared to their own home country, have prompted many professionals in the health professions to take up temporary or permanent work abroad. The German labor market is also affected: several thousand German doctors work abroad, mainly in Great Britain, Scandinavia, Switzerland, the USA or South Africa, while more and more doctors from the eastern EU countries are filling medical positions that are becoming vacant, especially in eastern Germany . In this context, there is also talk of a “brain drain” from the Eastern European EU countries to the old Western and Northern EU countries.

From the point of view of the hospital operator, there is another aspect that has an impact on employment relationships and thus on the labor market. We are talking about the effects of budgeting the hospital budget and the tight limitation of the possible rate of increase for the hospital budget. For several years now, the maximum annual rates of increase for hospital budgets stipulated by health policy have not covered the cost increases due to price and tariff increases. This discrepancy leads hospital management to use the job cuts as a way out of the imbalance in cost and budget developments.

The working conditions for the majority of employees in the hospital market are regulated by the Federal Employees' Collective Agreement (BAT). On October 1, 2005, the collective bargaining public service (TVöD) is to come into force as a BAT successor regulation. Above all, he is hoping for more flexibility, the possibility of performance-based pay and a solution for so-called low-wage groups, which, with the pay according to the BAT, were no longer competitive with the collective bargaining regulations of other industries, such as the cleaning trade.

Organizational form for the exchange of human labor (for dependent employment) for remuneration (work). Market partners are primarily private companies and public households with their labor demand, and private households with their labor supply. The wages to be paid as well as the resulting employment are determined depending on the situation from the effectiveness of market self-control processes and / or the action of association or state authorities (wage policy, employment policy, labor market policy). Traditionally, market theory, negotiation theory and institutionalist approaches are used to describe labor market processes (wage theory, bargaining theory, labor market theory). In addition, there have recently been aspects of the more recent labor market theories and political determinants of wage developments based on the New Political Economy. These approaches are based on different assumptions and are therefore able to capture certain situations and questions particularly well. It is difficult to explain the level and development of collectively agreed wages without taking bargaining-theoretical contexts into account, while the analysis of effective wages also requires at least market-theoretical approaches to be taken into account. Depending on the overall constellation on the labor market, there may be a divergence between the two wage figures or their development; it appears as a daring drift. The summarizing consideration of a single overall labor market is useful for certain macroeconomic analyzes, but it has to be abandoned in several respects in the case of correspondingly more detailed questions. A breakdown is necessary due to the heterogeneous requirements on the part of demand as well as due to the various possible uses of the services offered. This results in partial labor markets with regard to the direction of training, qualification level and personal characteristics of the workforce. In addition, there are subdivisions of partial labor markets with regard to spatial delimitation, temporal use and organizational differences. These distinctions already make it clear that the labor market is very imperfect in relation to a perfectly competitive market. It manifests itself in a lack of mobility of the workforce, which occurs in several respects and leads to market lack of coordination, as well as in information deficits, to which organizational deficits also contribute. Both of these mean that labor market decisions cost money. Furthermore, there are imperfections in the peculiarities of the market structure, which has historically developed from the "natural" monopoly of demand by employers through the organized supply monopoly of the unions and the organized monopoly of demand by employers' associations to a bilateral monopoly on the labor market. These market forms allow the market result to be determined by power politics. On the part of institutional segmentation theory, it is emphasized that some of the sub-labor markets mentioned are sealed off from one another. There is therefore hardly any competition between these sub-markets. In internal labor markets, to which access is only possible through a few entry points, habits and norms regulate the advancement and allocation of the workforce. All of the imperfections outlined above can lead to a more or less severe disruption of the allocation function that wages, as the price for the production factor labor, should fulfill in a market economy. This disruption is ultimately exacerbated by the fact that wage setting is often based not only on a dispute between the labor market parties, but also on an agreement to the detriment of other social groups. The various imperfections and the fact that, due to the prevailing constellation of conditions on labor and goods markets, a satisfactory level of employment is not automatically achieved (unemployment), are reasons and starting points for activities in employment policy and labor market policy. Literature: Author community, The job market in the Federal Republic of Germany in ..., appears in issue 1 of the messages from the job market and occupational research (MittAB). Brandes, W./Weise, R, Labor market and unemployment, Würzburg, Vienna 1980. Mertens, D., The labor market as a system of supply and demand, in: MittAB, 6th year (1973), p. 229 ff.

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