Extract

Managing labour supply is a topic that seems to be a simple proposition until one starts counting the number of potential manager and worker groups and watching how they interact. It quickly becomes difficult to determine who is managing whom. The diagram in Figure 16.1 is a reminder that a specific national labour market reflects the power of workers, businesses, pubic policymakers, and other exogenous players (such as labour unions, and labour markets in other countries). Not shown but also important are sporadic events, disruptive changes and shocks (such as weather patterns, economic crises, inflation, expectations, macroeconomic cycles, exchange rates, and trade), ageing and demographic changes, innovation and technology cycles. Over time the power of the various players in a labour market also varies. In periods of growth worker shortages shift power from employers to employees.