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Supply of labour may be defined as the total number of people of working age offered for employment at a particular time and at a given wage rate. This supply of labour also relates to the quantity of labour.

                           FACTORS AFFECTING SUPPLY OF LABOUR

  1. The size of population and population growth
  2. The age structure of the population
  3. The official school leaving age
  4. Official age of entry and retirement
  5. The number of people the pursue full time education beyond the normal school leaving age
  6. The number of married women who take up paid employment
  7. The number of people of working ages in the country who are disable or incapacitated
  8. The number of able bodied person in the country who are not willing to work
  9. The number of working hours per week
  10. The rate of remuneration or the wage rate



Demand for labour may be defined as the total number of workers employer are willing and ready to employ or  hire at a particular time and at a given wage rate The demand for labour relates to the quantity of human effort required by entrepreneur for carrying out production. The demand for labour is a derived demand


  1. The number of industries in a country
  2. The nature of industries
  3. The quantity of other factors of production available
  4. The price of labour or the wage rate
  5. The state of employment in the economy
  6. The demand for labour output and the price level within the economy.



Wages refers to payment to labour on a daily or weekly basis

Salaries refer to the payment made to labour on a monthly basis.



  1. Nominal Wages: It is the actual money paid for labour in a particular period of time
  2. Real Wages: This is the purchasing power of labour. Real wages refer to wages in term of goods and services the wages can buy.


  1. The forces of demand and supply in a market economy. The wages of labour in a market economy can be determined through the forces of demand and supply.

Wage rate in a competitive labour market can be determined in the following manner

  1. When the supply of labour exceeds the demand, wage rate will fall
  2. When the demand for labour exceeds the supply, wage rate will rise
  • When the demand for labour equals the supply wage rate will be favourable to both the employer and the employee.
  1. Government activities and policies: Government institution and wages commissions set up by the government help in determining wages, especially in the public services.

In fixing wages, the government agency or wage commission takes the following factors into consideration.

  1. Cost of living: The  higher the cost of living, the higher wages are likely to be
  2. Level of productivity: The greater the level of production in the country, the higher the wage rate.
  • Type of occupation: The wage structure varies from one occupation to another.



  1. Differences in cost of training
  2. Differences in period of training
  3. Skill needed at work
  4. The bargaining power of the trade union
  5. Degree of risk involved in an occupation
  6. The prestige attached to an occupation.



Unemployment is defined as a situation in which persons of working age, able and willing to work are unable to find paid employment. Unemployment of labour occurs in the economy if there are people who are capable of working and who are qualified by age, law, custom, and other factors to work, but who cannot find jobs.



  1. Structural Unemployment: This is the type of unemployment which arises as a result of changes in the pattern of demand of certain commodity.  If the demand is low, it could lead to industries reducing their workforce and this eventually results in structure unemployment.
  2. Seasonal Unemployment: This type of unemployment occurs in industries whose production is subject to seasonal variations.
  3. Voluntary Unemployment: Voluntary unemployment arises from the deliberate refusal of labour to work, even though employment opportunities exist (and such people are fit to work).
  4. Technological Unemployment: This is a type of unemployment which results when industries introduce capital intensive technique of production.
  5. Frictional Unemployment: It is associated with switching from one job to another.  Frictional unemployment occurs in the process of search for new jobs.  The time it takes to find new jobs will cause frictional unemployment.
  6. Casual Unemployment: It usually occurs with jobs of an unsettled nature or jobs which are not permanent
  7. Residual Unemployment: This type of unemployment includes all these who cannot work due to physical or mental disabilities.
  8. Cyclical Unemployment: This type of unemployment occurs during the depression or recession stage of the business or trade cycle.
  9. Disguised Unemployment: Disguised unemployment occurs if workers are not efficiently utilized in production or if they are underemployed.



  1. Economic recession
  2. Changes in the pattern of demand
  3. Seasonal changes in agricultural and other forms of production
  4. Economic reform policies
  5. Inadequate educational curricular and poor educational planning
  6. Use of capital intensive methods of production
  7. Rapid population growth and slow rate of economic growth
  8. Physical and mental disability.



  1. Increase in crime rate
  2. Threat to peace and stability
  3. Waste of human resources
  4. High rate of dependency
  5. Migration



  1. Industrialization
  2. Population control
  3. Redesigning educational system
  4. Proper development plans
  5. Provision of social amenities



A trade union is an association of workers formed to enable the members to take collective, rather than individual, action against their employers in matters relating to their welfare and conditions of work.  E.g. Academic staff union of universities (ASUU), National union of petroleum and Natural Gas Workers (NUPENG) etc.



  1. To secure good wages for members
  2. To safeguard interest of members
  3. Helps in policy formulated
  4. They also regulate the entry qualifications into the various professions
  5. Job security
  6. To secure better working conditions



  1. Negotiation or Collective bargaining with Employers: Collective bargaining is a process by which a trade union and the management try to resolve their differences through joint negotiations.
  2. Threat to Strike: The trade union my give an ultimatum to the employer or to the management informing them of an impending strike by the union if their demands are not met within a given period of time.
  3. Work to Rule: This involves the workers deliberately showing down operations in order to press down their demands for improved conditions of services
  4. Picket lines: This involves the workers refusing to work, parading and sometimes blocking the entrance to the plant or factory
  5. Strike: A strike involves workers refusing to work and staying away completely from their place of work until their demands are met.


  1. Explain the factors which influence the level of employment in your country
  2. Distinguish between labour and labour force
  3. State four reasons for difference in earning among workers.


See also







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