Labor Economics · intro
What moves on the Labor Market diagram
Labor demand is derived from product demand; a recession shifts it left, cutting both employment and wages.
Start at full strength.
Sales collapse across the economy, firms need fewer workers at every wage.
Ld shifts sharply left: employment and wages both fall. Labor demand is DERIVED demand, it lives and dies with output.
Examiners ask this as: recession jobs, layoffs demand falls, downturn wages.
Other scenarios on Labor Market