(a) Define labour as a factor of production. (b) Explain five characteristics of labour.

Answer Details

(a) Definition. Labour is the human effort, both physical and mental, applied to the production of goods and services in return for a reward (wages or salary). It is one of the four factors of production, and its reward is wages.

(b) Characteristics of labour:

• Labour is human: it is inseparable from the worker, who has feelings, rights and personal preferences, so it cannot be bought and owned outright like land or capital.
• Labour is perishable: a day's labour not used today cannot be stored and sold tomorrow; unemployed labour time is lost permanently.
• Labour is mobile but imperfectly so: workers can move between occupations and places, but movement is limited by cost, family ties, skills and other barriers.
• Labour has weak bargaining power individually: a single worker is at a disadvantage against an employer, which is why workers form trade unions to bargain collectively.
• Labour is variable in efficiency: its productivity differs from person to person and depends on education, training, health, motivation and working conditions.
• Labour is an active factor: it sets the other factors of production to work, since land and capital are unproductive without human effort.

Any five well-explained characteristics are acceptable.