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Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

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BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

A government passes a family-friendly law that no companies can have evening, nighttime, or weekend hours, so that everyone can be home with their families during these times. Analyze the effect of this law using a demand and supply diagram for the labor market: first assuming that wages are flexible, and then assuming that wages are sticky downward.

To determine

The effects of banning working hours in evening, night time or weekend on the labor market are to be determined.

Explanation

If the government passes the law as mentioned in the question, this will indeed affect the labor market in the respective country. The factors that affect labor market demand supply are:

  • Immigration
  • Income inequality
  • Unions
  • Unemployment
  • Corporate / State policies

Therefore, a family friendly law will affect the labor market in the following manner:

Wages are flexible: Here, the companies shall not compromise on their profitability, so they will pay more to the same work force...

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