Working hours and wages

Some people complain about their long working hours with unsatisfying wages. Today I want to discuss what can lead to long working hours. I do not want to discuss this topic in a perfectly competitive market situation, I think that it is probably more suitable to discuss this topic using an oligopoly market model. Why is an oligopoly market more suitable in this case? This is because the people who complain this problem are from urban areas(or at least have been educated in urban areas) and usually have good education background. When they look for jobs in the labour market, they want to enter the industries which can provide higher incomes and more opportunities, so basically they want to enter good firms. How many good firms are there? Maybe there are many good firms and firms with great potentials; however, there are not so many obviously good firms and opportunities out there in the labour market.

Firstly, it is easier to get into the big companies rather than small companies if we hold other factors the same. This is because the hiring environment is more open in large firms than it is in small firms (many small firms’ hiring processes are very exclusive). It is easier for job seekers to get information access to big firms, so they are more likely to know about hiring information (including hiring opportunities) in large firms rather than in small firms. But there are so many large firms out there in the labour market for each individual industry. Secondly, although there are many opportunities out there, it does not mean all these opportunities are de facto open to you. For example, although you may hear people with various (education) backgrounds enter the banking industry and succeed, when opening the hiring websites, having a maths or finance related degree is absolutely required for almost all kind of graduate schemes in the banking industry. Since even an industry like banking sets some entry barriers, the industries requiring more technical skills can have much higher bans for many people. Therefore, it restricts the supply of jobs at the individual level. Thirdly, when having a large population size, a tiny proportion of the population which meets the entry bans set by companies is enough for firms, especially the large firms. When an economy is becoming more productive, it means producing a same level of output requires fewer labours now.

Overall, in the job market, especially in the market with only large firms, the number of suppliers is limited while the number of demander is enormous, this is definitely an oligopolistic market.