labour market


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labour market

the economic relations between the buyers (employers) and sellers (workers) of labour power. In classical economics the assumption is that the supply of labour would be determined by its price (i.e. wage levels). Alternative economic models point to the existence of relatively autonomous, i.e. non-competing, internal labour markets within firms which could not be explained by the classical model; referred to as the Balkanization of labour markets by Clark Kerr (1954). These internal (firm specific) markets are connected to the external labour markets through recruitment mechanisms (i.e. criteria for selection), referred to as ports of entry, which explicitly emphasize educational qualifications, technical merit and experience, but also implicitly include criteria premised on tradition, geographic location and even prejudice.

Sociologists became particularly interested in labour market analysis in the early 1970s in their attempts to better explain the variations of employment experience between different social categories, in particular women, ethnic groups and the young (Fevre, 1992). This was initially attempted by reference to the dual labour market model which comprises two sectors: primary and secondary This model was initially developed by economists, notably by Doeringer and Piore (1971), who postulated that employers paid high wages and offered good career prospects only insofar as is necessary to ensure that they retained a stable group of primary sector workers. It is this group of workers who possess the necessary skills and commitment to ensure the firm could remain competitive by adapting to any technological changes necessary. It is for this reason, it is argued, that primary sector jobs are to be found in the larger corporation, for it is they that invest most in maintaining their dominance of the market through the application of technological innovation. The policy of maintaining a core of primary sector workers (who are usually adult white males) is, however, expensive, and in order for it to be viable, other groups of workers have to accept lower wages and poor, or less good, conditions of employment. In this secondary sector (usually comprised of young adults, women, blacks and other ethnic groups), employers can tolerate much higher rates of labour turnover because the tasks performed are generally viewed as less skilled and less crucial to the production process. This secondary sector may be included within the company or located within smaller firms that subcontract to it.

While, in general terms, the dual market model can account for some of the variability in labour market conditions, it has been found to be limited in its explanatory power. This is, in part, because it is based on a technologically deterministic assumption that companies pursue labour market policies solely in order to maintain their economic dominance through the application of technology (Rubery, 1978). It is also the case that the model fails to explain why the social groups associated with the two parts of the dual labour market are as they are, e.g. why women tend to get secondary sector jobs. In adopting labour market forms of analysis, sociologists have attempted to overcome these limitations, notably by the development of the concept of segmentation (see SEGMENTED LABOUR MARKET), and the identification of local labour markets (see LOCAL LABOUR MARKET). Both developments emphasize the socio-historical patterns that underpin labour market behaviour and the integral interconnections between work and non-work institutions (e.g. the family). see also FLEXIBLE LABOUR MARKETS.

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