Economics 12 Notes for Economics Notes

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Labor is mental or physical service provided to others for economical reward. There should be economic objective behind the performance of any work. The economic reward paid to labor may be in any form like wage, salary, commission, bonus, provident fund etc. it is paid per unit of time and per the contract between an employer and an employee. The unit may be day, hour, week, month, and year and so on.

Features of labor

Indispensable factor:
Without labor, production is not possible. It must be used for production because only the other factors of production don’t give production.

Active factor:
Labor is active factor of production. It moves because it is associated with human beings. It activates capital and uses the other factors of production too.

Mobile factor:
Labor is mobile factor of production. It moves from the one place to another place from one organization to another organization. However, its mobility depends upon climate, culture, language, nationality etc. Its mobility is limited by these factors because human are related to these factors.

Laborer sells labor:
The person who provides mental or physical service to others is called laborer. The laborer sells service not him/her.

Not storable:
Labor is not storable. It is used once; the labor used in a time period is not usable in other time. The laborer obtains remuneration for his/her contribution only for labor service. If any work is not done s/he doesn’t obtain any amount.

Not perishable working strength:
Doing work the working strength doesn’t perish. It is restored with rest and refreshment in the regular interval of time.

Paid for productivity:
Generally laborer is paid for productivity. Productivity depends upon ability to work, willing to work and capacity of laborer.

Weak bargaining power:
Labor has weak bargaining power. In most the countries bargaining power of labor is least among the factor of production. However, it may have strong bargaining power if the trade unions are powerful.

Efficiency of Labor

“Efficiency of labor depends partly on the employer and partly on the employee, partly on the organization and partly on individual efforts, partly on the tools and machinery etc. with which the worker is supplied and partly on his skill and industry in making use of them.”

Efficiency refers to production capacity. It is classified into following types they are:

Racial Qualities –
Every person has different qualities acquired from race/community to which he/she belongs. The quality that A person accede to the skill of the parent/community by birth is called racial quality. And so s/he will be more efficient if he gets into the right trade that has been followed by his/her race since the history.

Individual Qualities –
If a labor has good physique, mental fitness, intellectuality, honesty and is responsive then s/he is supposed to be more efficient and qualitative than others. A worker, who is educated and trained, specialized than s/he is much more efficient.

Factory environment –
If the factory environment is healthy and there is sufficient space for movement of machines with proper flexibility then the efficiency will be higher. In addition to that, the climatic or weather conditions have much effect on the efficiency of the laborer. If the climate is too humid then he will get tired soon and his work efficiency will get disturbed.

Working Hours –
Effective working hours with pantry breaks and recreations always improves efficiency of labor.

Wages –
A laborer who is paid reasonable wage will have good efficiency than that of those who receives fewer wages. And also the event of reward and promotion to higher grade will increase efficiency of labor.

Cooperation –
Based on the social condition the cooperation amidst the workers are regarded.

Relationship –
There must be cordial relationship between employee and employer to increase the efficiency of labor.

Social Security –
In the event of injury, sickness or death of any worker must convince the worker that his family would be taken care of to cross the condition. This factor improves efficiency.

Political Stability –
If the state can maintain peace at home then this factor also helps one to work effectively.

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