LABOR MARKETS: Perfect, Imperfect, and Structured
A LABOR MARKET consists of those forces of demand and supply that establish a single price and the quantity sold of a particular labor service. Most labor markets can be defined spatially as local in character: the supply of machinists in Springfield, Vermont, for example, does not influence the price of machinists in Cleveland, Ohio. National markets can, however, be said to exist for some occupations, such as transistor engineers, airplane pilots, or certain types of government administrators. The factors determining the geographical size of a labor market depend upon the concentration demand in certain centers and upon the degree of mobility of labor supplies.
Although most labor markets are local, they are not identical with the geographical labor markets used by the United States Employment Service. The Employment Service's concept is based on a list of central cities or groups of cities and the surrounding areas within which workers commute to jobs. Thus each of the geographic markets is an aggregate of several of the economists' local labor markets, each of which may have its own geographical configuration.
Local labor markets for specific occupations are linked together by movements of both workers and firms. A worker may leave his job in a textile factory and enter a nearby electronics firm without change of residence. Or a machinist may leave his position in Springfield and migrate to a job in Cleveland. Movement in the latter case does not merge Cleveland and Springfield into one labor market, however, because, unlike an airplane