Working hours and wages III

After discussing the "elite" labour market, let's dive into the general labour market. In the labour market, if firms are able to form a union to create an oligopolistic market and create an excess of labour supply, they will do so. I personally believe that this happens in almost all industries, even those which do not offer descent wages. If this only happens in the "elite" labour market, then it is not a significant problem; however, if this happens to most industries' labour markets, then this is a serious social issue. Is it possible to occur in all sectors?

This is very likely to happen in a society where the population size is large and the social benefits are low. When the population size is large, it means that even if there is a tiny increase in the market wage, the excess of labour supply can be significant. Moreover, the larger the population size is, the less likely the firms are to face labour supply limitations, they are easier to find substitutes for their labours. The social benefit is important, a better welfare system means labours are easier to reject requests from their employers, because the costs of quitting their jobs are lower when they can be provided with better benefits which are crucial for low income labours. When the social welfare is improved, firms will have less power to exploit their labours.

Overall, improving social welfare is important for the entire population including both employed and unemployed populations.