JOB FOR LIFE

Job for Life

Labour Market and Organizational Ability to Attract Employees

Introduction

Work is a part of life for almost all people around the world. Though the types of work people do and the conditions under which that work is done vary endlessly, people get up each morning and choose to use their human capital in ways that generate some sort of productive good or service or that help prepare them to be productive economic citizens in the future. Some of this work is done in the privacy of the home, where beds made, children raised, and lawns mowed. While this unpaid productive activity is essential to a well-functioning economy, this chapter addresses work time and skills that are sold in markets in exchange for wages and other compensation.

The purpose of this chapter is to explore the unique nature of labour markets and to consider how these markets will evolve in response to changes in the nature of the work people do over time. Use of labour, like any economic resource, has to be considered carefully in light of productivity and opportunity costs. Though many factors affect this decision-making process, in most cases labour is allocated by market forces that determine wages and employment. (Rosen, 1986, 641)

Discussion and Analysis

A person whose productive capacities are not fully used is underemployed. A part-time worker seeking a full-time job or a skilled worker doing unskilled work for lack of a job in his or her own trade, for example, is underemployed. Underemployment occurs for the same reasons as unemployment, although it is more difficult to measure.

Prior to the 1980s, the level of unemployment in European countries was typically lower than in the United States. In 1979, for example, the unemployment rate in France, West Germany, Italy, and Great Britain was 4.6%, compared with 5.8% in the United States. During the 1980s, however, employment growth in the United States far exceeded that achieved in Europe. Between 1980 and 1990, the U.S. economy generated more than 18 million additional jobs, whereas the economies of France, West Germany, Italy, and Great Britain, which together had a population roughly comparable to that of the United States, added less than 3 million new jobs. (Nelson, 1993, 279)

The result was that in 1990 the U.S. unemployment rate was considerably below that in those four European countries: 5.5% versus 7.1%. (In mid-2004 the unemployment rate of the four European countries—including the now reunified Germany—was 8.2 %.) The unemployment rate in Japan in 1990 was even lower, at 2.1%; by the end of 2003, however, it had climbed to 5.3%, but it receded to 4.6% by May the following year. Part of the rise in unemployment in most developed nations was due to increased competition from low-wage countries for jobs, particularly in manufacturing. In the United States jobless figures began to decline again in 1993, dropping to an annual rate of 4.5% in 1998 and reaching a 30-year low of 4.0% in 2000. By June 2003, though, the jobless rate had risen ...