Competition. Competition in the labor market (most important)

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Competition. Competition in the labor market (most important)

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29. Competition in the labor market

Underlying principles market economy - competitiveness, rivalry, competition. In the conditions of the spontaneous development of a market economy, healthy competition is not a frequent phenomenon. Therefore, in the labor market, two most common types of competition can be distinguished: monopsony and perfect competition.

monopsony in the labor market. Monopsony in the labor market means the presence of a single buyer of labor resources on it. A single employer is opposed here by numerous independent wage workers.

The main signs of monopsony include:

1) the concentration of the main part (or even all) employed in the field of a certain type of labor in one firm;

2) the complete lack of mobility of workers who do not have a real opportunity to change their employer when selling their labor;

3) the establishment by the monopsonist of control over the price of labor in the interests of profit maximization.

Monopsony in the labor market It is also expressed in the fact that for a monopsonist firm, the marginal cost associated with the payment of labor resources rises faster than the wage rate.

Perfect competition in the labor market. Perfect competition in the labor market implies the presence of four main features:

1) the presentation of demand for a certain type of labor (i.e., for workers of a specific qualification and profession) by a sufficiently large number of firms competing with each other;

2) the offer of their labor by all employees of the same qualification and profession (i.e., members of a certain non-competing group) independently of each other;

3) the absence of any one association on the part of both buyers of labor services (monopsony) and their sellers (monopoly);

4) the objective impossibility of agents of demand (firms) and agents of supply (employees) to establish control over the market price of labor, i.e., to dictate the level of wages forcibly.

Perfect competition in the Russian labor market. In the Russian labor market, which is still undergoing a process of complex formation, there are some segments within which the features of perfect competition prevail. With a certain degree of conventionality, today they include the markets of sellers, builders, drivers, cleaners, repair workers of various profiles, specializing in the repair of housing, offices, household appliances, furniture and shoes, and auxiliary workers. The demand here is represented by many small and tiny firms, and the supply is represented by an unorganized mass of workers who master these relatively simple professions.

Author: Ilyina V.N.

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