The case of oil and gas field workers illustrates the reaction of wages and employment in excess demand in the labor market. A second example illustrating the opposite case of how wages and employment adjust to excess labor supply is in the shutdown of the Armour Company meat packing plant in July in the City of Fargo, North Dakota.
The adjustment of wages and employment in the Fargo labor market is in response to the plant shutdown. The closing of the Armour plant resulted in an immediate loss of approximately 450 jobs. This loss is represented by a leftward shift of labor demand, illustrating that at the going wage there is now a smaller demand for labor in the market.
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