Mobility of Labour (With Barriers)| Economics

The mobility of labour has two aspects:

(a) The spatial or geo­graphical mobility of labour, which relates to the rate at which workers move between geographical areas and regions in response to differences in wages and job availability (e.g., a worker from Calcutta moving to Mumbai) and

(b) The occupational mobility of labour which relates to the extent to which workers change occupations or skills in response to differences in wages or job avail ability (e.g., a jute mill worker joining a tea garden).

It may apparently seem that labour is the most mobile of all factors — both occupationally and geographically. Workers can move both freely from one industry to another and from one region to another.

Importance of Mobility of Labour:

The importance of labour mobility is that it determines the rate at which labour markets adjust to equilibrium from disequilibrium situations. Sup­pose, the country consists of two regions A and B, that initially there is full employment in each region and that wages for a given type of labour are equal. Suppose that there is an increase in demand for some products in A, which causes an increase in the demand for some types of labour, and that the reverse happens in B.

The result would be that wages are higher in A than in B, with an excess of job vacancies over available workers in A and unemployment in B. If the particular type of skill now in increased demand in A match those in reduced demand in B, then the duration of the ‘regional employment’ problem depends on the geographical mobility of labour.

If the skills do not match, however, then the occupational mobility of labour would also be important. Thus, one could take the persistence of a ‘regional unemployment problem’ as evidence of a very low geographical and occu­pational mobility of labour.

Barriers of Mobility of Labour:

There are many factors — economic, social and psychological — which tend to lead to low geographical and occupational (and skill) mobility.

The following are the most important barriers to labour mobility:

Geographical of Mobility of Labour:

1. Monetary cost:

Moving to a new location often appears to be costly due to numerous expenses involved in buying and selling a house (apart from renewal costs, i.e., costs of moving a family together with all its possessions).

2. Housing shortages:

Housing shortage, particularly in most urban areas, is the second major geographical barrier to mobility. There is very little chance of a worker getting rental accommodation in any of the metro­politan cities of India.

3. Social ties:

Moving to a new place means uprooting a family from its known surroundings and starting a new life at a strange place. Most people do not like it. This is, however, not an important barrier for many profes­sionals like doctors or business people, most of whom have an extra temp­tation to move to other places quickly in search of higher return.

4. Education:

Family problems due to considerations such as children’s education may act as another barrier. Many people are reluctant to move at certain stages of their children’s education. This is no doubt a genuine problem which most people face if different parts of the country are oper­ating different systems of education.

Occupational of Mobility of Labour:

1. Natural ability:

People differ in skill, ability and efficiency. Some occupations require a high level of intelligence, or particular natural apti­tudes which are only possessed by a very small percentage of the popula­tion. For these reasons, surgeons, athletes, singers and star entertainers are a class by themselves and always stand on a different platform. They start from a higher point on the income ladder than most of other people.

2. Training:

Many professionals require a long period of training and education (e.g., doctors, architects, lawyers, etc.). Such training and educa­tion are very costly not only in financial terms but also in real terms — in terms of opportunities foregone.

A doctor, for example, spends 10-15 years’ of his life for establishing himself during which period he earns virtually nothing. So, there is lot of financial sacrifice by a medical student and his family. The length of the training period as also the cost involved may act as a deterrent to some people.

3. Capital:

A certain amount of capital is required in order to enter some occupations (such as retail trade or hairdressing or book publishing). These financial requirements often prove to be a barrier to many potential entrants.

4. Class:

The existing class structure often in a society imposes some restrictions on the occupational mobility of labour. In developing countries like India a particular type of social background with an education at one of the more famous public schools provide a distinct advantage in certain fields of employment (such as those of marketing and salesmanship).