LESSON 2

2.1 LABOUR

Refers to any mental or physical effort of people which is used in the production of goods and services.

2.2 Characteristics of labour

Labour cannot be separated from the worker.
Labour cannot be stored (it if remains idle for some time it causes labour shortage)
Labour is human
It is a factor of production with varied productivity (the variation in productivity depends on the level of education and training, level of technology etc)
Labour is a very mobile factor of production both geographically and occupationally.
Labour as a factor of production is rewarded/ paid wages.

Labour force refers to the proportion of the population made up of the working age group in the country between 16—64years, but excluding full-time students and house wives.

(OR Labour force refers to the total number of people of the working age group that is available for employment at a given time)

2.3 Categories, of labour force

The labour force consists of the unskilled, semi-skilled, skilled and professionals.

The unskilled labour. This labour force consists of workers who have no special training and have a few/ no specific skills. It is labour in raw form.
Semi-skilled labour. This labour has received some form of education and training which is however not adequate to make it fully productive to handle special tasks. For example, labour provided by students in vacation.
Skilled labour. This consists of workers who have received the necessary special education and training to do their jobs and have specific skills.
These are the workers who have received advanced qualifications to do their jobs such as lawyers, doctors, teachers, etc.

2.4 FACTOR MOBILITY /MOBILITY OF A FACTOR OF PRODUCTION

Refers to the ease with which a factor of production moves from one geographical location to another or from one occupation to another.

2.5 Mobility of labour

Refers to the ease with which labour moves from one geographical location/place to another or from one occupation to another

Forms of mobility of labour

Geographical mobility. Refers to the ease with which labour moves from one geographical location /place to another.
Occupational mobility. Refers to the ease with which labour moves from one occupation/job to another.

Occupational mobility of labour can either be horizontal or vertical

Vertical labour mobility. Refers to the ease of movement of labour from a low-grade job to a job of a senior grade such as from the post of accountant to that of a chief accountant, from deputy head teacher to head teacher.
Horizontal labour mobility. Refers to the ease of movement of labour from one job to another but of the same grade. For example, an accountant leaving one bank to join another but still as an accountant, from nurse in one hospital to nurse in another hospital.

2.6 Factors determining labour mobility

The cost of movement/transfer from one place to another. High cost of transfer to places of alternative jobs implies that many workers find it expensive to move and thus labour is immobile. However low cost of transfer makes many workers afford to move to find new jobs and thus labour is mobile.
The level of awareness of the existing alternative jobs by workers. More knowledge about the available occupations such as due to adequate publicity makes labour mobile because they easily find the alternative jobs while ignorance about the alternative jobs such as due to inadequate publicity makes the labour immobile.
The level of development of transport infrastructure. Poorly developed transport network such as poor roads, absence of railway transport makes it difficult for people to move to places with alternative jobs and thus labour is immobile. However better transport network in some areas encourages people to move to places to get new jobs and thus labour is mobile.
The political situation in areas of alternative jobs. Political stability in areas of alternative jobs enhances labour mobility because the workers do not stay in panic of their lives and are assured of the security of their property. However political instability in some areas of alternative jobs makes labour reluctant to move to such areas and hence immobility of labour.
The cost of living in the current or alternative work place. High cost of living/high prices of goods and services in some places with alternative jobs limits labour mobility because many people fear to move to such areas (where life is hard to sustain) even when there are better jobs while low cost of living in some areas encourages labour mobility.
The level of education and training of labour. Highly educated / trained labour is in most cases immobile occupationally because they are highly specialized in a particular activity and hence cannot easily change to a new job while less educated labour is more mobile occupationally because they are generalists who are in position to perform many activities.
The length of training period for the new job. Shorter training period for alternative jobs makes labour mobile because they easily join the new jobs while long training period for alternative jobs makes labour immobile since it takes long to acquire the required skills.
Level of skills of labour. Labour with the required skills easily moves to different locations or occupations –hence enhancing labour mobility while inadequate job specific skills required makes labour immobile.
The level of wages (paid to workers). High/ better wages paid to workers at the current occupation makes labour reluctant to leave because they largely contented while lower wages paid to workers at the current occupation make labour unsettled and therefore looking for better paying jobs –hence mobile.
The working conditions. Poor working conditions in alternative jobs /locations such as lack of job security, absence of medical and housing allowances makes labour immobile because they reluctant to join such places of work. However good working conditions in alternative jobs such as job security and many allowances make labour mobile.
Level of specialization of labour. High degree of specialization of labour in the current occupation makes labour immobile occupationally because the workers do not easily take up alternative jobs (since they concentrate on that one activity). However, labour that is not specialized is more mobile occupationally.
The health status of the worker. Poor health conditions of workers such as sickness, old age, physical disability make labour immobile since they do not easily perform many alternative jobs. However good/sound health conditions of workers such as being physically fit make labour mobile.
Discrimination in the labour market according to race, tribe, religion, sex etc. High degree of discrimination in the labour market such as favouring certain races, religions among others – makes many workers unable to acquire alternative jobs and hence labour is immobile. However limited /no discrimination in the labour market makes more jobs available to workers and thus labour is mobile.
Level of social ties. Strong social ties make many people fear to move because they do not want to leave behind their friends and relatives and establish new social relationships in a new area—hence labour is immobile. However weak social ties favour labour to move to places with alternative jobs and hence enhancing labour mobility.
Level of trade union restriction into and out of a given profession. Restricted entry and exit by professional associations such as trade unions for certain occupations makes labour immobile because they do not readily enter or leave certain jobs. However free entry and exit makes labour mobile since they readily take up new jobs.
Variations in climatic conditions
Government policy on labour movement

S.5 ECONOMICS