Why the market metaphor is misleading

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Chapter 2 in The Labour Market Myth, 2024, pp 25-47 from Edward Elgar Publishing

Abstract: The concept of a ‘labour market’ is explained as the interaction between supply and demand of labour through the price mechanism. First, this concept is criticized from an economic perspective. The assumptions underlying an upward-sloping supply curve and a downward-sloping demand curve are scrutinized. Both theoretically and empirically, the existence of a stable relation between supply and demand on the one hand and the wage rate on the other hand is questioned. This also applies to the price mechanism (wage adjustments) as an instrument for balancing supply and demand. From a sociological perspective, even more fundamental criticism of the standard labour market model is formulated. From this perspective, work cannot be considered to be a burden (‘disutility’) for workers, for which they have to be compensated by paying them a wage. Neither can employers’ behaviour be understood as the result of a rational weighing of the short-term costs and benefits of hiring workers.

Keywords: Economics and Finance; Sociology and Social Policy; Sustainable Development Goals (search for similar items in EconPapers)
Date: 2024
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