Reading. If the price/cost factor is the main to affect supply and demand of commodity goods, how does it refer to the labour market?

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If the price/cost factor is the main to affect supply and demand of commodity goods, how does it refer to the labour market? Can you think of any other factor?

Read an article from the website ehow.com and do the tasks following the text.

Know the factors that affect your labour supply and demand so your business can remain competitive.

(1) In every business that deals with a collection of employees, labour supply and demand must be a consideration by management or ownership. No business that requires additional employees can reach their potential without them; striking a balance between the labour available and the labour needed is always a concern that relates to productivity and to profits. Understanding the main factors that can sway labour supply and demand can help you to run a successful business.

(2) Before learning the factors that affect labour demand, you must first know exactly what is meant by the term. Simply put, labour demand is the amount of workers needed to get the job done. Labour demand is a decision by management or ownership concerning how many employees or labour hours to use to complete a necessary task. Usually, the decision is heavily influenced by money. It is in the company's best interests to use as little labour as necessary to save money while still accomplishing the workload that is required.

(3) On the opposite side of this carefully balanced scale is labour supply. Labour supply is simply the amount of workers available to a business at a given time. During times when labour supply is low, it can be tougher to retain employees because of other opportunities and fewer out-of-work people.

(4) The wage factor is the most significant issue affecting labour supply and demand. People do not typically work for fun. They work for money and the amount they get paid is a central factor in deciding whether they will take a job or stay at a job when something else is available. Higher wages increase the labour supply for a company because it makes the job more attractive to more people. Lower wages, however, may increase the labour demand because companies can afford to hire more people at a lower rate than at a higher rate. This results in a constant tug of war in the delicate balance between supply and demand.

(5) Barriers to entry are a second factor that affects labour supply and demand. Demand from hiring companies may go up because the employees they seek are specialized in some particular skill or have many requirements of new hires. Meanwhile, the labour supply decreases significantly because of these barriers. If a company only considers master's degree holders for a position, the supply of candidates for the job drops significantly compared to a company seeking candidates with a bachelor's degree. In addition, companies that require complicated testing or that require new hires to "jump through hoops" to getthrough the interview process usually find that their labour supply drops off significantly because of other options in the market that are easier to nail down.

Task 1. Explain in your own words what labour demand and labour supply mean.

Task 2. Paraphrase the following sentence: Striking a balance between the labour available and the labour needed is always a concern that relates to productivity and to profits. (para.1)

Task 3. Why is it more difficult to retain employees when labour supply is low? (para.3)

Task 4. Explain what consequences changes in wages have. (para.4)

Task 5. Expression “jump through hoops” means

a) to do smth too soon, before the right time;

b) to do smth difficult in order to achieve smth;

c) to enthusiastically accept an opportunity or offer. (para.5)

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