Labour economics seeks to understand the functioning and dynamics of the markets for wage labour. Labour markets or job markets function through the interaction of employers. Labour economics looks at the suppliers of labour services and the demanders of labour services, attempts to understand the resulting pattern of wages and income. Labour is a measure of the work done by human beings, it is conventionally contrasted with such other factors of production as capital. Some theories focus on human capital. There are two sides to labour economics. Labour economics can be seen as the application of microeconomic or macroeconomic techniques to the labour market. Microeconomic techniques study individual firms in the labour market. Macroeconomic techniques look at the interrelations between the labour market, the goods market, the money market, the foreign trade market, it looks at how these interactions influence macro variables such as employment levels, participation rates, aggregate income and gross domestic product.
The labour force is defined as the number of people of working age, who are either employed or looking for work. The participation rate is the number of people in the labour force divided by the size of the adult civilian noninstitutional population; the non-labour force includes those who are not looking for work, those who are institutionalised such as in prisons or psychiatric wards, stay-at home spouses and those serving in the military. The unemployment level is defined as the labour force minus the number of people employed; the unemployment rate is defined as the level of unemployment divided by the labour force. The employment rate is defined as the number of people employed divided by the adult population. In these statistics, self-employed people are counted as employed. Variables like employment level, unemployment level, labour force, unfilled vacancies are called stock variables because they measure a quantity at a point in time, they can be contrasted with flow variables. Changes in the labour force are due to flow variables such as natural population growth, net immigration, new entrants, retirements from the labour force.
Changes in unemployment depend on inflows made up of non-employed people starting to look for jobs and of employed people who lose their jobs and look for new ones, outflows of people who find new employment and of people who stop looking for employment. When looking at the overall macroeconomy, several types of unemployment have been identified, including: Frictional unemployment – This reflects the fact that it takes time for people to find and settle into new jobs. Technological advancement reduces frictional unemployment. Structural unemployment – This reflects a mismatch between the skills and other attributes of the labour force and those demanded by employers. Rapid industry changes of a technical and/or economic nature will increase levels of structural unemployment; the process of globalization has contributed to structural changes in labour markets. Natural rate of unemployment – This is the summation of frictional and structural unemployment, that excludes cyclical contributions of unemployment.
It is the lowest rate of unemployment that a stable economy can expect to achieve, given that some frictional and structural unemployment is inevitable. Economists do not agree on the level of the natural rate, with estimates ranging from 1% to 5%, or on its meaning – some associate it with "non-accelerating inflation"; the estimated rate varies from country from time to time. Demand deficient unemployment – In Keynesian economics, any level of unemployment beyond the natural rate is due to insufficient goods demand in the overall economy. During a recession, aggregate expenditure is deficient causing the underutilisation of inputs. Aggregate expenditure can be increased, according to Keynes, by increasing consumption spending, increasing investment spending, increasing government spending, or increasing the net of exports minus imports, since AE = C + I + G +. Neoclassical economists view the labour market as similar to other markets in that the forces of supply and demand jointly determine price and quantity.
However, the labour market differs from other markets in several ways. In particular, the labour market may act as a non-clearing market. While according to neoclassical theory most markets attain a point of equilibrium without excess supply or demand, this may not be true of the labour market: it may have a persistent level of unemployment. Contrasting the labour market to other markets reveals persistent compensating differentials among similar workers. Models that assume perfect competition in the labour market, as discussed below, conclude that workers earn their marginal product of labour. Households are suppliers of labour. In microeconomic theory, people are assumed to be rational and seeking to maximize their utility function. In the labour market model, their utility function expresses
Automation is the technology by which a process or procedure is performed with minimal human assistance. Automation or automatic control is the use of various control systems for operating equipment such as machinery, processes in factories and heat treating ovens, switching on telephone networks and stabilization of ships and other applications and vehicles with minimal or reduced human intervention; some processes have been automated, while others are semi-automated. Automation covers applications ranging from a household thermostat controlling a boiler, to a large industrial control system with tens of thousands of input measurements and output control signals. In control complexity it can range from simple on-off control to multi-variable high level algorithms. In the simplest type of an automatic control loop, a controller compares a measured value of a process with a desired set value, processes the resulting error signal to change some input to the process, in such a way that the process stays at its set point despite disturbances.
This closed-loop control is an application of negative feedback to a system. The mathematical basis of control theory was begun in the 18th century, advanced in the 20th. Automation has been achieved by various means including mechanical, pneumatic, electronic devices and computers in combination. Complicated systems, such as modern factories and ships use all these combined techniques; the benefit of automation include labor savings, savings in electricity costs, savings in material costs, improvements to quality and precision. The World Bank's World Development Report 2019 shows evidence that the new industries and jobs in the technological sector outweigh the economic effects of workers being displaced by automation; the term automation, inspired by the earlier word automatic, was not used before 1947, when Ford established an automation department. It was during this time that industry was adopting feedback controllers, which were introduced in the 1930s. Fundamentally, there are two types of control loop.
In open loop control the control action from the controller is independent of the "process output". A good example of this is a central heating boiler controlled only by a timer, so that heat is applied for a constant time, regardless of the temperature of the building.. In closed loop control, the control action from the controller is dependent on the process output. In the case of the boiler analogy this would include a thermostat to monitor the building temperature, thereby feed back a signal to ensure the controller maintains the building at the temperature set on the thermostat. A closed loop controller therefore has a feedback loop which ensures the controller exerts a control action to give a process output the same as the "Reference input" or "set point". For this reason, closed loop controllers are called feedback controllers; the definition of a closed loop control system according to the British Standard Institution is'a control system possessing monitoring feedback, the deviation signal formed as a result of this feedback being used to control the action of a final control element in such a way as to tend to reduce the deviation to zero.'
A Feedback Control System is a system which tends to maintain a prescribed relationship of one system variable to another by comparing functions of these variables and using the difference as a means of control. The advanced type of automation that revolutionized manufacturing, aircraft and other industries, is feedback control, continuous and involves taking measurements using a sensor and making calculated adjustments to keep the measured variable within a set range; the theoretical basis of closed loop automation is control theory. One of the simplest types of control is on-off control. An example is the thermostat used on household appliances which either opens or closes an electrical contact. Sequence control, in which a programmed sequence of discrete operations is performed based on system logic that involves system states. An elevator control system is an example of sequence control. A proportional–integral–derivative controller is a control loop feedback mechanism used in industrial control systems.
In a PID loop, the controller continuously calculates an error value e as the difference between a desired setpoint and a measured process variable and applies a correction based on proportional and derivative terms which give their name to the controller type. The theoretical understanding and application dates from the 1920s, they are implemented in nearly all analogue control systems. Sequential control may be either to a fixed sequence or to a logical one that will perform different actions depending on various system states. An example of an adjustable but otherwise fixed sequence is a timer on a lawn sprinkler. States refer to the various conditions that can occur in a sequence scenario of the system. An example is an elevator, which uses logic based on the system state to perform certain actions in response to its state and operator input. For example, if th
A raw material known as a feedstock, unprocessed material, or primary commodity, is a basic material, used to produce goods, finished products, energy, or intermediate materials which are feedstock for future finished products. As feedstock, the term connotes these materials are bottleneck assets and are important with regard to producing other products. An example of this is crude oil, a raw material and a feedstock used in the production of industrial chemicals, fuels and pharmaceutical goods; the term "raw material" denotes materials in minimally processed or unprocessed in states. Many raw metallic materials used in industrial purposes must first be processed into a usable state. Metallic ores are first processed through a combination of crushing, magnetic separation and leaching to make them suitable for use in a foundry. Foundries smelt the ore into usable metal that may be alloyed with other materials to improve certain properties. One metallic raw material, found across the world is iron, when combined with nickel, this material makes up over 35% of the material in the Earth's inner and outer core.
Places with plentiful raw materials and little economic development show a phenomenon, known as "Dutch disease" or the "resource curse", that occurs when the economy of a country is based upon its exports due to its method of governance. An example of this is the Democratic Republic of Congo. Raw materials are used by non-humans, such as birds using found objects and twigs to create nests. Karl Marx, Vol. 1, Part III, Chap. 7
Inventory control or stock control can be broadly defined as "the activity of checking a shop’s stock." However, a more focused definition takes into account the more science-based, methodical practice of not only verifying a business' inventory but focusing on the many related facets of inventory management "within an organisation to meet the demand placed upon that business economically." Other facets of inventory control include supply chain management, production control, financial flexibility, customer satisfaction. At the root of inventory control, however, is the inventory control problem, which involves determining when to order, how much to order, the logistics of those decisions. An extension of inventory control is the inventory control system; this may come in the form of a technological system and its programmed software used for managing various aspects of inventory problems, or it may refer to a methodology for handling loss prevention in a business. An inventory control system is used to keep inventories in a desired state while continuing to adequately supply customers, its success depends on maintaining clear records on a periodic or perpetual basis.
Inventory management software plays an important role in the modern inventory control system, providing timely and accurate analytical and forecasting techniques for complex inventory management problems. Typical features of this type of software include: inventory tracking and forecasting tools that use selectable algorithms and review cycles to identify anomalies and other areas of concern inventory optimization purchase and replenishment tools that include automated and manual replenishment components, inventory calculations, lot size optimization lead time variability management safety stock calculation and forecasting inventory cost management shelf-life and slow-mover logic multiple location supportThrough this functionality, a business may better detail what has sold, how and at what price, for example. Reports could be used to predict when to stock up on extra products around a holiday or to make decisions about special offers, discontinuing products, so on. Inventory control techniques rely upon barcodes and radio-frequency identification tags to provide automatic identification of inventory objects—including but not limited to merchandise, fixed assets, circulating tools, library books, capital equipment—which in turn can be processed with inventory management software.
A new trend in inventory management is to label inventory and assets with a QR Code, which can be read with smart-phones to keep track of inventory count and movement. These new systems are useful for field service operations, where an employee needs to record inventory transaction or look up inventory stock in the field, away from the computers and hand-held scanners. Inventory control systems have advantages and disadvantages, based on what style of system is being run. A purely periodic inventory control system takes "an actual physical count and valuation of all inventory on hand... at the close of an accounting period," whereas a perpetual inventory control system takes an initial count of an entire inventory and closely monitors any additions and deletions as they occur. Various advantages and disadvantages, in comparison, include: Periodic is technically the more accurate as it considers both counted and valued inventory. Periodic is more time-consuming than perpetual. Perpetual can lower the cost of carrying inventory vs. periodic.
Perpetual is more costly to run than periodic. Perpetual needs to be verified from time to time against an actual physical count, due to scrap, human error and other variables
Inventory management software
Inventory management software is a software system for tracking inventory levels, orders and deliveries. It can be used in the manufacturing industry to create a work order, bill of materials and other production-related documents. Companies use inventory management software to avoid outages, it is a tool for organizing inventory data that before was stored in hard-copy form or in spreadsheets. Inventory management software is made up of several key components working together to create a cohesive inventory of many organization's systems; these features include: Should inventory reach a specific threshold, a company's inventory management system can be programmed to tell managers to reorder that product. This helps companies avoid tying up too much capital in inventory; when a product is in a warehouse or store, it can be tracked via its barcode and/or other tracking criteria, such as serial number, lot number or revision number. Systems. For Business, Encyclopedia of Business, 2nd ed. Nowadays, inventory management software utilizes barcode, radio-frequency identification, and/or wireless tracking technology.
Companies that are service-oriented rather than product-oriented can use inventory management software to track the cost of the materials they use to provide services, such as cleaning supplies. This way, they can attach prices to their services. Barcodes are the means whereby data on products and orders are inputted into inventory management software. A barcode reader is used to look up information on the products they represent. Radio-frequency identification tags and wireless methods of product identification are growing in popularity. Modern inventory software programs may use QR codes or NFC tags to identify inventory items and smartphones as scanners; this method provides an option for businesses to track inventory using barcode scanning without a need to purchase expensive scanning hardware. A automated demand forecasting and inventory optimization system to attain key inventory optimization metrics such as: Reorder point: the number of units that should trigger a replenishment order Order quantity: the number of units that should be reordered, based on the reorder point, stock on hand and stock on order Lead demand: the number of units that will be sold during the lead time Stock cover: the number of days left before a stockout if no reorder is made Accuracy: the expected accuracy of the forecasts The Universal Product Code was adopted by the grocery industry in April 1973 as the standard barcode for all grocers, though it was not introduced at retailing locations until 1974.
This helped drive down costs for inventory management because retailers in the United States and Canada didn't have to purchase multiple barcode readers to scan competing barcodes. There was now one primary barcode for other retailers to buy one type of reader for. In the early 1980s, personal computers began to be popular; this further pushed down the cost of readers. It allowed the first versions of inventory management software to be put into place. One of the biggest hurdles in selling readers and barcodes to retailers was the fact that they didn't have a place to store the information they scanned; as computers became more common and affordable, this hurdle was overcome. Once barcodes and inventory management programs started spreading through grocery stores, inventory management by hand became less practical. Writing inventory data by hand on paper was replaced by scanning products and inputting information into a computer by hand. Starting in the early 2000s, inventory management software progressed to the point where businesspeople no longer needed to input data by hand but could update their database with barcode readers.
The existence of cloud based business software and their increasing adoption by businesses mark a new era for inventory management software. Now they allow integrations with other business backend processes, like accounting and online sales. Companies use inventory management software to reduce their carrying costs; the software is used to track products and parts as they are transported from a vendor to a warehouse, between warehouses, to a retail location or directly to a customer. Inventory management software is used for a variety of purposes, including: Maintaining a balance between too much and too little inventory. Tracking inventory as it is transported between locations. Receiving items into a warehouse or other location. Picking and shipping items from a warehouse. Keeping track of product sales and inventory levels. Cutting down on product obsolescence and spoilage. Avoiding missing out on sales due to out-of-stock situations. Manufacturers use inventory management software to create work orders and bills of materials.
This facilitates the manufacturing process by helping manufacturers efficiently assemble the tools and parts they need to perform specific tasks. For more complex manufacturing jobs, manufacturers can create multilevel work orders and bills of materials, which have a timeline of processes that need to happen in the proper order to build a final product. Other work orders that can be created using inventory management software include reverse work orders and auto work orders. Manufacturers use inventory management software for tracking assets, receiving new inventory and additional tasks businesses in other industries use it for. There are several advantages to using inventory management software in a business setting. A company's inventory represents one of its largest investments, along with its workforce and locations. Inventory management software helps companies
A tax is a mandatory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund various public expenditures. A failure to pay, along with resistance to taxation, is punishable by law. Taxes may be paid in money or as its labour equivalent. Most countries have a tax system in place to pay for public, common or agreed national needs and government functions; some levy a flat percentage rate of taxation on personal annual income, but most scale taxes based on annual income amounts. Most countries charge a tax both on corporate income and dividends. Countries or subunits also impose wealth taxes, property taxes, sales taxes, value-added taxes, payroll taxes or tarrifs; the legal definition, the economic definition of taxes differ in some ways such as economists do not regard many transfers to governments as taxes. For example, some transfers to the public sector are comparable to prices. Examples include, tuition at public universities, fees for utilities provided by local governments.
Governments obtain resources by "creating" money and coins, through voluntary gifts, by imposing penalties, by borrowing, by confiscating wealth. From the view of economists, a tax is a non-penal, yet compulsory transfer of resources from the private to the public sector, levied on a basis of predetermined criteria and without reference to specific benefit received. In modern taxation systems, governments levy taxes in money; the method of taxation and the government expenditure of taxes raised is highly debated in politics and economics. Tax collection is performed by a government agency such as the Ghana Revenue Authority, Canada Revenue Agency, the Internal Revenue Service in the United States, Her Majesty's Revenue and Customs in the United Kingdom or Federal Tax Service in Russia; when taxes are not paid, the state may impose civil penalties or criminal penalties on the non-paying entity or individual. The levying of taxes aims to raise revenue to fund governing or to alter prices in order to affect demand.
States and their functional equivalents throughout history have used money provided by taxation to carry out many functions. Some of these include expenditures on economic infrastructure, scientific research and the arts, public works, data collection and dissemination, public insurance, the operation of government itself. A government's ability to raise taxes is called its fiscal capacity; when expenditures exceed tax revenue, a government accumulates debt. A portion of taxes may be used to service past debts. Governments use taxes to fund welfare and public services; these services can include education systems, pensions for the elderly, unemployment benefits, public transportation. Energy and waste management systems are common public utilities. According to the proponents of the chartalist theory of money creation, taxes are not needed for government revenue, as long as the government in question is able to issue fiat money. According to this view, the purpose of taxation is to maintain the stability of the currency, express public policy regarding the distribution of wealth, subsidizing certain industries or population groups or isolating the costs of certain benefits, such as highways or social security.
Effects can be divided in two fundamental categories: Taxes cause an income effect because they reduce purchasing power to taxpayers. Taxes cause a substitution effect when taxation causes a substitution between taxed goods and untaxed goods. If we consider, for instance, two normal goods, x and y, whose prices are px and py and an individual budget constraint given by the equation xpx + ypy = Y, where Y is the income, the slope of the budget constraint, in a graph where is represented good x on the vertical axis and good y on the horizontal axes, is equal to -py/px; the initial equilibrium is in the point, in which budget constraint and indifference curve are tangent, introducing an ad valorem tax on the y good, the budget constraint's slope becomes equal to -py/px. The new equilibrium is now in the tangent point with a lower indifferent curve; as can be noticed the tax's introduction causes two consequences: It changes the consumers' real income It raises the relative price of y good. The income effect shows the variation of y good quantity given by the change of real income.
The substitution effect shows the variation of y good determined by relative prices' variation. This kind of taxation can be considered distortionary. Another example can be the Introduction of an income lump-sum tax, with a parallel shift downward of the budget constraint, can be produced a higher revenue with the same loss of consumers' utility compared with the property tax case, from another point of view, the same revenue can be produced with a lower utility sacrifice; the lower utility or the lower revenue given by a distortionary tax are called excess pressure. The same result, reached with an income lump-sum tax, can be obtained with these following types of taxes (all of them cause only a budget constraint's shift without causi