Blackwell Reference Online

Extract

In principle a labor market is the primary method of allocating people to paid work, of whatever nature, within capitalist economies/societies. Within capitalism, the separation of the producer of a good or service from the means of its production has rendered a situation where labor power, that is, the capacity of a person to work, has become a commodity to be bought and sold. In theory both buyers and sellers of labor power are free to choose from or to whom they would like to buy and sell. Thus, the “market” can be represented as an efficient, voluntary mechanism of exchange wherein the economic rules of efficiency, perfect competition, and supply and demand apply, and equilibrium can be achieved. From such a perspective market imperfections, or disequilibria, when they occur, do so because interest groups within a market are, for example, able to strengthen their position, restrict entry to their group, or force pay changes. Actions or events such as these are regarded essentially as “glitches” and, over time, theory suggests, equilibrium will be reachieved. From a general picture of labor markets within the context provided, we can hone our examination by considering the notion of external and internal labor markets. The model of the dual labor market, developed by Doeringer and Piore (1971) , introduced the idea of the primary and secondary sectors. The primary sector represents ... log in or subscribe to read full text