The labour market refers to the number of people who want to work in relation to the avaliable Jobs. The human resources in a Company are the people working there. The labour market is determined by the laws of the supply and demand. There is a low demand for skilled workers who get higher salaries due to the specific work they have.
Nowadays permanent contracts are being replaced by termporary ones as well as salaries have experienced a significant reduction.
According to work and employment population can be divided into active and inactive population.
- Active population: includes all the people who can work. The ones who are working and the ones who are unemployed. Labour force is made up of people who have a job or employed population and those who avaliable to undertake it but are not working at the moment (= unemployed population)
Labour force = Employed population + unemployed population
2. Inactive population includes people who can not work or live on incomes not related to work. Landlords, students, domestic duties and pensioners.
3. The labour force participation rate is the percentage of the active population in relation to those who are included in the age working population. It also can be defined as the percentage of the active population in a country. It is calculated using this formula:
Labour force x 100
Working age population ( population over 15 to 65)
4. Unemployment rate is the percentage of the unemployed labour force in relation to the full labour force. The formula to calculate it is :
Unemployed labour force x 100