IGCSE Edexcel Economics: Wages and Employment in a Free Economy
Division of Labour
This is a process where each worker specializes in doing a particular task. If people concentrate on those tasks they are most adequate and skilled at, a lot more can be produced.
Advantages and disadvantages of division of labour: for the worker and for the firm.
Advantages to Worker and Firm
- More goods and services can be produced: Division of Labour can allow workers to specialize in something, and hence become more skilled at what they do. And if you’re better at something, you are bound to be able to do more of it in the same period of time.
- Time is saved: This saves for workers from not having to move from one work bench to another.
- Allow use of machinery: Workers can specialize in a certain machinery, hence further improving productivity.
Disadvantages to Worker.
- May become demotivated as they do a boring repetitive job- Let’s see how motivated you are after whisking eggs 12 hours a day, 7 days a week?
- Demotivation may cause skill to suffer: Pretty self explanatory here.
- May eventually be replaced by machinery: We’re in the age of technology, and soon, previously Labor Intensive work will be eventually replaced by Capital machinery. When that time comes, what will happen to the worker? I mean, hes been whisking eggs for 30 years. What else can he do?
Disadvantages to Firm
- Greater Costs of Training Workers: Pretty self explanatory
- Additionally, diminished quality due to demotivated workers will have an impact on the firm. They may have quality problems, decreased production, etc.
Factors affecting demand for labour:
· Demand for final product.
- Availability of substitute factors
- Productivity of the workforce.
Factors affecting supply of labour:
· Determinants of working population i.e age distribution, retirement and school-leaving age, female participation in labour force
- Qualification and Training
- Determinants of working population: Age distribution, females, retirement age,etc.
