(a) Distinguish between labour and labour force. (b) State four reasons for the differences in earnings among workers.

Answer Details

(a) Labour versus labour force.

• Labour is any human physical or mental effort, whether paid or unpaid, that is directed towards the production of goods and services. As a factor of production it is the human effort used in production.
• Labour force is the total number of people in a country who are of working age (for example 15 to 64 years), who are able and willing to work, and who are actually working or available for work. It excludes children, the aged, the sick, full-time students, and those unwilling to work.

In short, labour is the effort supplied, while the labour force is the number of people available to supply that effort.

(b) Four reasons for differences in earnings among workers.

1. Differences in skill, training, and qualifications. Highly skilled and well-trained workers (for example doctors, engineers) earn more than unskilled workers because their services are scarce and more productive.
2. Nature and risk of the job. Jobs that are dangerous, unpleasant, or require heavy responsibility usually attract higher pay to compensate the workers.
3. Demand for and supply of the particular labour. Where the demand for a type of labour is high relative to its supply, wages rise; where labour is abundant relative to demand, wages are low.
4. Bargaining power (trade unions). Workers in strong trade unions can negotiate higher wages than unorganised workers. (Other valid points: differences in experience, location of work, and government wage legislation.)