Marginal labor costs. Mathematical commentary

Model of direct impact on wages (schedule)

Monopsony at the intersection of MRC and MRP determines the optimal level of L1 employment.

salary = w1. When crossing sentence s

The labor market is characterized by imperfect competition with elements of monopsony and monopoly. Monopsony is the only buyer of labor. The state must actively interact with monopsony.

It is not the state that plays a BIG role in interfering in the activities of the monopsonist, but unions!!! Intervention is necessary to limit the influence of employers, ensure increased wages, increased employment, improved working conditions for workers and provide social guarantees for the unemployed.

49. Factor labor and its price. Salary forms .

Labor market- a special area of ​​market relations where purchase and sale transactions are made work force.Vkach-vegeneral. indicators of the labor available to the population. Economists and statisticians use almost identical resources. the concept of “total slave. strength" and "ec. assets. population of the country. This usually includes everyone employed in any type of work (together with military personnel) and the unemployed. Entrepreneurs (mostly small ones who do not use hired labor), as well as people in liberal professions, also fall into this category.
Wages, their forms, system and amount.
Wage. The price of labor. In modern conditions market economics, the labor market is part of common market factors of production on which various forms of money are formed. rewards for the use of e. resources. The forms of this payment, or factor prices, differ greatly in their formation mechanisms and are given special names:
-price of labor - wages,
-the price of land - rent,
-price of capital - interest.
Essence of salary. Salary is income per day. form, the hire received. slave-com for providing the definition. labor services. It can also be defined as the price of the production factor of labor.
Salary is the main source of income for the working population. From the point of view of the farm worker, its purpose is to provide economics. conditions of human existence. From the point of view of payment - in ensuring staff motivation to work.
Share of labor income. An important structural indicator reflecting the maturity of market development. fur-mov in the field of labor. relations, is the share of salary (labor income) in the total money. income of the population.
Salary is a special kind of price, the value of which is closely related to the standard of living of the population. It is divided into types:
1) Nominal salary - the amount of money received for performing some labor service.
2) Real salary - the number of goods and services that can be purchased for a nominal salary.
Assessing the relationship between these concepts, it is important to emphasize that the real salary reflects the purchasing power of the nominal salary, and this purchasing power itself is directly dependent on the value of the nominal salary and inversely on the level of prices for consumer goods and services. This dependence can be depicted in the form of a formula: From here it is clear that real salary will increase with an increase in nominal wages, but decreases with an increase in prices (this reduction occurs especially sharply in conditions of inflation).
Salary forms:
1. time-based is a monetary payment for the labor service of an employee, calculated depending on the amount of time worked (hour, day, week...) a) Simple time-based payment includes payment for full-time employees and hourly payment for part-time workers for the time actually worked.
b) Time-based bonus.
2. piecework is a monetary payment for the labor services of an employee, calculated depending on the amount of products produced by him. a) Simple piecework
b) Piece bonus (fixed bonus for increasing quantitative and qualitative indicators.
c) accord system (for performing work according to the estimate).
Advantages of the main forms of salary. Each of the main forms of salary has advantages and disadvantages. Time wages:
+ convenient when performing complex and complex work;
+ creates potential prerequisites for quality work (no need to rush!).
- does not stimulate the intensity of work (the soldier is sleeping, but the service is going on);
- requires control over current work activity, and not over its results, which is much more difficult (it’s easier to weave yourself than to force someone careless).
Piece wages:
+ intensifies work;
+ reduces supervision costs (own material interest is the best controller).
- does not interest the employee in improving quality and even stimulates the release of defects;
- not suitable for complex, lengthy, complex work.
Without going into details of the evolution of wage forms at various stages of development of market relations, we emphasize that at present time wages and their varieties are more widespread. The main reasons for this transformation are: firstly, qualitatively new level labor processes in the sphere of material production, developing on the basis of modern technology (complex labor has become predominant) and, secondly, the accelerated and advanced development of the sphere of intangible services, within which essentially the only possible measure of labor becomes its duration.
Organization Z/P includes several elements:
1. Actions of the tariff system, which normalizes labor costs, cash payments, workers of various professions and various qualifications (6-8 categories)
2. A system is installed for engineering and technical employees official salaries, one by one tariff system(E.T.S.) from 1 to 18 digits. Salaries are differentiated by length of service and qualifications.
3. When setting wages important role take into account the severity (harmfulness) of labor.
4. The rate of growth of wages should not outpace the rate of growth of labor productivity.

50. Activities of trade unions in the labor market.

Trade unions are associations employees created to protect their economic interests and improve working conditions. According to the composition of the united workers, they can have a narrow professional, sectoral, regional, national and even international character.

The primary task of trade unions is to protect employees from possible exploitation by enterprises that demand labor and pay it at a low price. Therefore, trade unions organize collective forms of labor sales instead of individual ones. They are trying to ensure an increase in wages, an increase in the number of employees, improved working conditions for workers and social guarantees for the unemployed. Along with performing cleanly economic tasks trade unions often intervene in political life their countries. Economic activity trade unions can be built according to several models, characteristic of individual countries and different time periods

Ø model for stimulating labor demand

Focused on increasing wages and employment by increasing the demand for labor. The trade union can achieve such an increase by improving the quality of work.

Ø labor supply reduction model

Focused on increasing wages by reducing labor supply. These are narrowly professional trade unions (closed). They limit the number of their members, for which they use long training periods for the relevant profession, restrictions on the issuance of licenses, high entrance fees, etc. Reduced immigration into the country.

Ø model of direct impact on wages

Direct pressure from the trade union. For example, under the threat of a strike, it is able to force enterprises to agree to the increase in wage rates desired by the trade union.
Work Contradictions Trade Unions Direct pressure is used to achieve an increase in workers' wages. BUT there is a contradiction: wage increases as a result of trade union activity come at the expense of reduced employment in the industry! IN market economy unions can influence the supply of labor, but not the demand for it. At high rates, the demand for labor is less than at low rates. The consequence of rising wages is unemployment. From this we can conclude that the work of trade unions is inconsistent.

Explanation of the graph: the graph shows that the equilibrium wage rate in conditions competitive market labor could be W 0 . However, the industry trade union is seeking to set wages no lower than W TU, threatening a strike. The labor supply curve S L turns into a broken curve W TU CS L. That is, an increase in the wage rate from W O to W TU will entail a reduction in the number of employees from L O to L TU.

51. Monopsony in the labor market.

Labor market under monopsony conditions

Monopsony in the labor market means the presence of a single buyer labor resources . A single employer is opposed here to numerous independent wage workers.

The main signs of monopsony include:

1) concentration of the main part (or even all) of those employed in the field certain type labor in one company;

2) complete (or almost complete) lack of mobility of workers who do not have real possibility change employer when selling your labor;

3) establishment by the monopsonist (sole employer) of control over the price of labor in the interests of maximizing profits.

The main thing that distinguishes the situation under monopsony from perfect competition is the increase in wage rates when hiring an increasing number of workers. In other words, if for a company  a perfect competitor the supply of labor is absolutely elastic and the company can hire any number of workers it needs at the same rate, then with a monopsony the supply schedule has the usual form, increasing with rising prices. And this is understandable: a monopsonist is actually a company-industry. An increase in its demand for labor automatically means an increase in industry-wide demand. To attract additional workers, they have to be lured from other industries. The relationship between supply and demand in the economy is changing, labor prices are rising.

The industry labor market may develop monopsony, when there is only one buyer of labor services in the industry. Such a situation may arise, for example, in a small city, where the only employer is one company located in it.

Demand curve D L for the monopsonist it is the curve of the marginal product of labor in monetary terms MRP L and the labor supply curve S L- line of average costs per resource (in in this case for work) ARC L. TO In addition, it should be recalled that the monopsonist has marginal costs per factor MRC L grow faster as purchases of labor services increase than average resource costs, i.e. ARC L.

This happens because a monopsonist who hires an additional number of workers is forced not only to attract newly hired workers more high rate wages, but also establish this increased rate for workers hired earlier. Equilibrium in the labor market in the case of monopsony is determined by the point of intersection of the marginal cost curves for the factor (MRC L) and the marginal revenue from the product of the factor used (MRP L),T. e. point V. P drawing a vertical line from it to the curve S L, we define the point M, respectively, the level of wages under monopsony w M . And in conditions of perfect competition, equilibrium would be determined by the point of intersection of the curves MRP L; And ARC L, i.e. point ABOUT. Therefore, the industry will hire fewer workers than in conditions of perfect competition (by the amount L o L M) and at a lower wage rate (by the amount w ow M).

52. Characteristics of the working capital market, liquidity indicators .

Characteristics of the working capital market.

Working capital is used once and is completely consumed during each production cycle (and a little accounting - completely transfers its value to the products produced!) The working capital market is a typical resource market. The demand for material resources is derivative in nature with respect to the demand for final products and depends on the latter. In this case, profit maximization is achieved at the point of equality of the marginal monetary product and the marginal costs of the corresponding material resource. Rule MRC=MRP.

Types of working capital markets:

Ø Perfect competition. It is observed in the markets of those material resources where both suppliers and buyers are numerous.

Ø Monopsony (/oligopsony). Occurs in enterprises processing agricultural products. For example, a local dairy plant for collective farms is a monopsonist, because There are no factories nearby, and if milk is transported, it will turn sour.

Ø Monopoly (/oligopoly). Suppliers of resources that serve other firms as working capital. Monopolists have the ability to impose inflated prices on supplied resources to their consumers. In Russia they are like this natural monopolists, like Gazprom, Transneft, former. RAO UES, etc.

Ø Mutual monopoly (/oligopoly). It occurs when one monopolist is the supplier of certain material resources, and another monopolist is the buyer.

Labor is the most important factor production and the main source of income for the economically active part of the population. The market always consists of buyers and sellers, who respectively create supply and demand for a particular product or service.

According to the standard definition, the labor market is the sphere of contacts between sellers and buyers of labor services, as a result of which the price level and distribution of labor services are established. The labor market includes a wide range labor relations and the persons involved. Through the market, the majority of the working population receives income and, having received work, spends the bulk of their active time there.

In the labor market, labor power is bought and sold, and wages act as the price. Demand in the labor market is determined by entrepreneurs (employers). It depends on the production needs for additional labor, the availability of free capital for its purchase and the price level (wages). Supply in the labor market is determined by the number of people job seekers(unemployed). In this case, market equilibrium is established based on the equality between supply and demand.

The company hires an additional worker when his marginal profitability is equal to his wage rate: MRP (L) = W. Thus. the labor demand curve is plotted in the coordinates “wages” (W) - “number of employees” (L) and has a downward slope.

The supply of labor is based on the problem of each person’s choice of the relationship between work and rest. Nominal wage (Wn) represents the amount of money that a worker can receive for his work. Real wage (Wr) is the amount of goods and services that can be purchased with this money. The relationship between these quantities will be determined by the price level for goods and services: Wr = Wn: P.

Theoretically, the labor market can be perfectly competitive or imperfectly competitive. In both cases, the demand for labor on the part of an individual firm, industry, and the economy as a whole will be determined by the marginal return to labor. Differences in pricing in different markets will relate primarily to labor supply.

A perfectly competitive labor market is characterized by:

A large number of equally qualified workers offer their services in this field of activity;

A bunch of small firms compete with each other when hiring workers in a given specialty;

Neither workers nor firms are able to influence the price of labor, i.e. by the amount of salary.

Under perfect competition, the marginal cost of labor will be equal to the wage (MRC(F) = W). This is explained by the fact that the supply of labor for an individual firm will not depend on the size of the salary, since workers are not able to change it. At the same time, an individual company does not hire everyone, but only a small part of the total market supply work force. Therefore, at a given wage rate, the supply of labor can be as large as desired. Then any firm, taking advantage of the situation, will increase employment in production until an additional worker provides an increase in income equal to the value of his salary: MRP (L) = W.

If we consider the labor market not for one, but for all firms that employ the labor of workers in a given profession, then the supply in this case will be limited. Therefore, in order to expand production, it is necessary to attract workers from other fields of activity, and for this, wages should be increased.

Consequently, the labor supply curve for a particular industry is upward sloping.

The equilibrium in the labor market may be disrupted. One of the factors of imbalance in the labor market is state regulation. In particular, the state sets a minimum wage to increase the wages of unskilled workers to a level that would protect them from poverty. Changes in equilibrium in the labor market may be influenced by various factors: labor productivity, its capital-labor ratio, skill level, etc.

The most common type imperfect competition is a monopsony. A similar situation often occurs in small towns, where the city’s economy practically depends on the activities of one large company. It is this company that provides work to the bulk of the population and acts as the main buyer for local market labor. Therefore, she has every opportunity to influence the level of salaries.

Such a company will be forced to increase wages to attract additional workers engaged in production. Therefore, the marginal cost of resources will be above the wage rate by the amount necessary to bring the wages of all workers already hired to the new wage level.

Magnitude marginal cost labor for a monopolist will be higher than the average salary. On the graph, this position is reflected by the MRC(L) curve, which is located above the labor supply curve S(L). The specific number of workers hired by the company will be determined by the condition of profit maximization, which in turn is based on the need to maintain equality of marginal profitability and marginal labor costs: MRP(L) = MRC(L). On the graph, this is point E where the corresponding curves intersect. Number of employees hired corresponding to this condition, - Le, and the salary value is We.

Law of Diminishing Returns

Factors of production must be used by the company in compliance with a certain proportionality between constant and variable factors. You cannot arbitrarily increase the number of variable factors per unit of constant factor, since in this case the law of diminishing returns(see 2.3).

According to this law, a continuous increase in the use of one variable resource in combination with a constant amount of other resources at a certain stage will lead to the cessation of increasing returns, and then to their decrease. Often, the law assumes that the technological level of production remains unchanged, and therefore the transition to more advanced technology can increase returns regardless of the ratio of constant and variable factors.

Let us consider in more detail how the return from a variable factor (resource) changes in the short-term time interval, when part of the resources or factors of production remains constant. After all, within short period, as already noted, the company cannot change the scale of production, build new workshops, purchase new equipment, etc.

Let us assume that a company in its activities uses only one variable resource - labor, the return of which is productivity. How will the firm's costs change as the number of workers it hires gradually increases? First, let's look at how output will change as the number of workers increases. As the equipment is loaded, product output quickly increases, then the increase gradually slows down until there are enough workers to fully load the equipment. If we continue to hire workers, they will no longer be able to add anything to the volume of production. Eventually there will be so many workers that they will interfere with each other, and output will decrease.

Marginal product

The increase in production due to an increase in the quantity of a variable factor by one unit is called marginal product this factor. In the example under consideration, the marginal product of labor MP L (marginal product) will be the increase in production volume due to the attraction of one additional worker. In Fig. 10.2 shows the change in the volume of output with an increase in the number of workers L (English labor). As can be seen from the graphs, production growth is rapid at first, then gradually slows down, stops, and finally becomes negative.

However, in its activities, a company primarily faces not the quantity of resources used, but their monetary value: it is not interested in the number of workers hired, but in wage costs. How will the firm's costs (in this case, labor costs) change for each additional unit of output?

Rice. 10.2. Law of diminishing returns. Dynamics of output with an increase in the number of workers (a) and dynamics of the marginal product (b): Q - output volume; L - number of workers; MP L - marginal product of labor

Marginal cost

The increase in costs associated with the release of an additional unit of production, i.e. The ratio of the increase in variable costs to the increase in production caused by them is called the marginal costs of the company MC (marginal costs):

where?VC is the increase in variable costs; ?Q is the increase in production volume caused by them.

If, with an increase in sales volume by 1OO units. of goods, the firm's costs will increase by 800 rubles, then the marginal costs will be 800: 100 = 8 rubles. This means that an additional unit of goods costs the company an additional 8 rubles.

As production and sales volume increases, the firm's costs may change:

a) evenly. In this case, marginal costs are a constant value and are equal to variable costs per unit of goods (Fig. 10.3, A);

b) with acceleration. In this case, marginal cost increases as production volume increases. This situation is explained either by the action of the law of diminishing returns, or by the rise in prices of raw materials, materials and other factors, the costs of which are classified as variables (Fig. 10.3, b);

c) with slowdown. If the company's expenses for purchased raw materials, supplies, etc. decrease as output increases, marginal costs decrease (Fig. 10.3, V).

Rice. 10.3. Dependence of changes in firm costs on production volume

Let's take a closer look at the effect of the law of diminishing returns on a firm's marginal costs. Let us assume that the variable is one factor - labor. Let us determine how a change in the return from the employed workers will affect the firm's costs when the volume of output increases.

Let's assume that hiring each worker costs the company 1 thousand rubles. In our example, one worker is not able to produce any product at all, two workers can produce 5 units, three workers can produce 15 units. etc. (Table 10.2).

The company will not hire the eighth and ninth workers, since the eighth will not be able to provide an increase in production, and the ninth will simply interfere, and production will decrease. Therefore, the company will either decide to expand production space, which will allow the efficient use of additional workers, or limit itself to hiring two to seven workers from existing facilities. However, it is impossible to answer the question of how many specific workers will be hired, because there is no information about the demand for the product and the company’s income from its sale.

Table 10.2. Costs and output for one type of variable resources

We assumed that only one type of resource is variable - labor. However, in practice, a firm faces several variable resources. To expand production, it needs more raw materials, materials, energy, etc. Some of its costs will remain constant: rent, insurance premiums, the cost of the equipment used. In the short run, when costs can be divided into fixed and variable costs, the law of diminishing returns will apply.

In table Table 10.3 shows data on the company’s costs: fixed, variable, marginal and average.

Based on the calculations given in table. 10.3, you can construct a graph of changes in the average (fixed, variable and gross) costs of the company, as well as marginal costs, depending on changes in the volume of output (Fig. 10.4). Mutual arrangement curves on the graph are always subject to certain patterns. When the marginal cost curve falls below the average variable cost curve, the latter always has the character of a downward curve, as these costs are reduced.

Table 10.3. Dynamics of company costs in the short term

Rice. 10.4. Family of company cost curves in the short term: C - costs; Q - output volume; AFC - average fixed costs; AVC - average variable costs; ATC - average gross costs; MC - marginal cost

From the moment the marginal cost curve intersects the average variable cost curve (point A), average variable costs begin to increase. The same pattern exists for the marginal and average gross cost curves: the marginal cost curve intersects the average gross cost curve at the point with their minimum value(point B).

Average variable costs will be minimal at point A when producing 9 thousand units. products (in Table 10.3, the minimum average variable costs are 353.3 rubles). The minimum average gross costs are 436 rubles. in the production of 14 thousand units. products (point B).

When plotting a cost analysis, you should always start by drawing the marginal cost curve. Then you should make sure that it intersects the average variable and total cost curves at their minimum points. These points may not coincide exactly with the data given in the table, since it provides information only for whole units of production, and cost curves may reflect production in fractions of a unit.

Analysis of production costs affects the firm's choice of output volume in the short-term time interval, when some of the costs are constant. For example, how many loaves of bread can a bakery produce with existing production facilities and available equipment? How much grain can be grown on fixed crop areas with the available amount of agricultural machinery?

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The main thing that distinguishes the situation under a monopsony from perfect competition is the increase in wage rates when hiring an increasing number of workers. In other words, if for a perfect competitor company the supply of labor is absolutely elastic and the firm can hire any number of workers it needs at the same rate, then with a monopsony the supply schedule has the usual form, increasing with rising prices. And this is understandable: the monopsonist is actually a company-industry. An increase in its demand for labor automatically means an increase in industry-wide demand. To attract additional workers, they have to be lured from other industries. The balance of supply and demand in the economy changes, and labor prices rise.

Monopsony in the labor market is also expressed in the fact that for a monopsonist firm, the marginal costs associated with paying for labor resources grow faster than the wage rate (cf. columns 4 and 2 in Table 11.1).

Indeed, let the company decide to hire a third worker in addition to two (moving from the second to the third line in the table). What will be its additional costs? Firstly, you will have to pay a salary to the third worker (6 units - see table), that is, in this part the marginal costs will increase in accordance with the increase in the wage rate. But the additional costs don’t stop there. Secondly, the company will have to increase the salary rate for two already employed employees from 4 units. to the same level of 6 units. As a result, although wages will only rise from 4 to 6 units, marginal costs will increase from the original level of 6 units. up to 10 units (really, 6 + = 10 ).

The consequences of this situation are clearly visible in the graph (Fig. 11.6).

The marginal cost of labor curve (MRC L) is located above the wage rate curve at which labor is offered (S L). In this case, the labor demand curve (D L), which coincides for the firm with the monetary marginal product of labor curve (MRP L), will intersect with the marginal labor cost curve (MPC L) at point B.

Therefore, according to the rule MRC = MRP In this case, the company will hire L M people. More people It is not profitable for a monopsonist to hire. Therefore, the demand for labor on the part of the monopsonist breaks off at this level and takes the form of a broken curved line (ABL M), highlighted on the graph by thickening. And since, in accordance with the supply curve S L, such a number of workers can be hired with payment for their labor at the rate W M, then this is exactly what the monopsonist will pay them.

Let us pay attention to the fact that point M does not coincide with the point of intersection of the demand and supply schedules O. That is, equilibrium is established at a different point than under perfect competition. Compared to a firm operating in a free competitive market, a monopsonist acquires less labor ( L M< L O ), while simultaneously paying workers lower wages ( W M< W O ). In other words, the elimination of employer competition by establishing the dictates of a monopsonist firm naturally leads to a general decline in employment (and hence production) and a decline in the living standards of the population.

The state is obliged to actively promote the limitation of monopsony. It is obligatory for the reason that natural forces are unable to cope with this problem. After all, they operate only in conditions of competition, which does not exist under monopsony. In this case, government intervention is not an anti-market measure at all. “The establishment [of the state] of a minimum wage for a monopsonist is the same as the establishment of a maximum price for a monopolist: both of these policies force the firm to behave as if it were in a competitive market,” writes the leading American microeconomist H. R. Varian.

And yet, it is not only the state that needs to intervene in the formation of a competitive labor market. Special role A social institution such as trade unions is also called upon to play a role here.

The main goal of any entrepreneur or enterprise is to achieve the maximum level of profit in the production process. When planning the expected profit, it is necessary to realistically estimate the actual costs and calculate their maximum value.

The concept of marginal cost

Marginal costs mean a certain amount of additional costs that were spent on producing a unit of additional output. At each stage of production, marginal costs have their own value.

The value of marginal costs is mainly influenced by costs classified as variable types, namely: wages, rent and the cost of purchasing raw materials necessary for production.

This type of costs is divided into costs incurred in the short term and in the long term. In the short term, the amount of costs is influenced only by factors that change at the moment production activities. In the long term, their value is adjusted based on all resources consumed and costs incurred.

This type of cost appears in planning productivity or labor efficiency (the share of labor costs allocated to a unit of production). There is an inversely proportional relationship between these quantities. The lower labor costs, the higher its productivity. However, in conditions economic development, the term marginal productivity of labor is increasingly used.

Labor productivity is marginal

Marginal labor productivity is understood as an additional increase in the number of workers, which leads to a decrease in the amount of marginal product. Marginal product is expressed by the additional quantity of output that became achievable by hiring one more employee.

Since the enterprise seeks to make high profits from the sale of the produced goods, the number of employees will increase as long as the marginal revenue remains above the marginal costs aimed at workers' wages.

The marginal cost of labor is considered to be an increase in the total cost of employee salaries at a constant value of consumed resources.

Companies and enterprises can hire additional employees as long as the marginal revenue from sales is higher than the marginal cost of labor.

The optimal situation is considered to be in which the size of the marginal product is equal to limit value labor costs. In this case, the number of employees is selected correctly, and the profit received under such conditions will be maximum.

What determines the size of marginal labor costs?

In some cases, this type of cost can be reduced. Their value is influenced by the following circumstances:

• degree of technical equipment of production;
• methods aimed at improving labor productivity and increasing the volume of production;
• changes in the structure and volume of products produced;
• limiting the influence of external factors.

An attempt by entrepreneurs to achieve maximum profit levels leads to a decrease in the number of workers and, as a consequence, an increase in the unemployment rate and the number of workers with a seasonal work schedule or part-time work. In such a situation, the state must encourage enterprises to maintain the number of workers and increase their number by expanding production.