Courbe WS et Économie du Travail

Study Notes

Introduction

The WS curve (Wage-Setting) represents the relationship between the real wage and the level of employment.
It illustrates the nominal wage that firms are willing to pay workers considering the equilibrium level of employment.
The WS curve is upward sloping, indicating that higher employment levels are associated with higher real wages.

Factors Influencing the WS Curve Shape

Market power of firms: Larger firms typically have more negotiating power, leading to less responsive wage adjustments to employment levels.
Bargaining power of workers: Strong labor unions or worker organization can lead to real wages that are relatively insensitive to employment changes.
Expectations: Expected inflation and future wage adjustments affect worker and firm expectations. Higher expected inflation implies a higher nominal wage demand.
Productivity: Increases in labor productivity will reduce wage demands. Higher productivity thus leads to a shift downwards in the WS curve.
Unemployment rate: Higher unemployment levels often correlate with reduced wage demands, with a corresponding shift downwards or left in the WS curve.
Economic Conditions: Overall economic prosperity or downturns influences real wages and employment. More expansionary conditions can lead to a shift upwards and to the right
Government policies: Wage policies or minimum wage laws often influence the shape and position of the WS curve.

Determinants of the WS Curve's Position

Productivity: Higher productivity tends to shift the WS curve downwards as firms can afford to pay higher wages while still delivering profits.
Worker bargaining power: Strong labor unions or worker organization usually lead to a higher position of the WS curve.
Economic conditions: A buoyant economy often leads to a shift upwards in the curve, as both firms and workers demand higher wages. Conversely, during recessions, the WS curve shifts downwards.
Legal minimum wages: Minimum wage laws directly impact the WS curve by establishing a minimum that firms must pay. Higher minimum wages result in a shift to a higher position.
Social norms: Expected wages and social norms about wages influence workers' demands and firms' willingness to pay.
Wage indexation: When contracts adjust wages based on inflation, it directly affects the position of the WS curve.

Intersection with the PS Curve

The WS curve intersects with the PS curve (Price-Setting) curve to determine equilibrium real wage and employment levels.
The point of intersection is crucial in determining the equilibrium employment and wage rates.

Shifts of the WS Curve

Changes in labor market conditions: Stronger or weaker labor unions, productivity shocks, and changing unemployment levels all cause shifting in the curve.
Public policies: For example, government-mandated wage increases or minimum wage laws will cause upward shifts in the WS curve.
Inflation expectations: Changes in inflation expectations will produce an upward or downward shift in the WS curve depending on whether expectations increase or decrease.

Description

Ce quiz aborde la courbe WS, qui illustre la relation entre les salaires réels et le niveau d'emploi. Il explore les facteurs influençant la forme de cette courbe, tels que le pouvoir de marché des entreprises et le pouvoir de négociation des travailleurs. Testez vos connaissances sur l'économie du travail et la détermination des salaires !