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A labour market

We already know what a market is. We also know that the conceptconceptconcept of the market is very wide, as it covers various trade transactions. If we take into account the criterion of the subject of the transaction, apart from commoditiescommoditiescommodities, services and capital markets, we would also distinguishto distinguishdistinguish the labour market. There is no doubt that it is a very specific market. The emergenceemergenceemergence of the labour market was a consequence of treating human work as if it was a commodity. This “product”, however, stands outto stand outstands out from other “products” because of its propertiespropertyproperties. UnlikeunlikeUnlike any other product, labour is characterized by its “own will and the ability to make decisions”. What is the subject of exchange on the labour market (i.e. work) may look for the buyer (employer) to the same extentto the same extentto the same extent as the buyer is looking for the product. The main componentscomponentcomponents of the labour market are, therefore:

• the supply of labour (labour force) created by people who are able and willing to work,

• the demand for work (availableavailableavailable workplaces, both in terms of quantity and quality of workplaces offered), which manifeststo manifestmanifests itself in a specific configuration of jobs offered in the market.

The relations between supply and demand for labour are determined by its value (price), which in the case of the labour market takes the form of a wage. Labour resources, both on the scale of an economic organization as well as the national and world economy, are very valuablevaluablevaluable. Effective use of these resources is the basis for economic growth and development.

The demand side of the labour market are employers who are searching for someone who will work for them. On the other hand, the labour supply are potential employees, looking for jobs.

The balance between these sides of the market is very rare. The labour market is also subject to economic changes. Sometimes we deal with the so‑called employer's market (when the labour supply exceedsto exceedexceeds the demand and we face the phenomenon of unemployment). Other times it is an employee’s market (in this situation, the demand for labour is greater than the supply and there is a shortage of employees, for example in some industries or occupations). There is also a possible imbalance in the market with a small number of people who are unemployed but are not willing to work. In economics, such unemployment is called natural unemployment.

An important element of the labour market is the price of work, i.e. the remuneration for the work performed. It is called a salarysalarysalary or a wage. It can be assumed that this is a benefit which the employer is obligedobligedobliged to pay to the employee periodicallyperiodicallyperiodically in return for the work he has done, according to the type of work, quantity and quality.

A salary

A salary is both basic pay and additional remuneration components, e.g. bonusesbonusbonuses, awards, overtimeovertimeovertime pay, holiday pay, as well as various types of benefits and receivables being a consequence of employment, such as retirement and pension benefits, jubilee bonuses, cash equivalents, compensation, etc.

The provisions on remuneration (in the Labour Code) mention two types of remuneration components:

• obligatory elements, i.e. the rates of basic remuneration for a particular type of work or a specific position,

• optional components, i.e. additional components that are awarded to an employee under the employer's payrollpayrollpayroll regulations. From the employer's point of view, all this is the cost of employment.

A bonus

A bonus is a one‑offone‑offone‑off financial award for specific employee's performance, a component of remuneration awarded to the employee as a supplementsupplementsupplement to the basic pay, and dependent on meeting certain criteria. Bonus rules in a company should be precisely defined. There are many types of bonuses, e.g. for: a quantitative increase in the tasks performed, quality improvement, reduction of operating costs, saving raw materials, energy and other resources, timely or early performance of tasks.

When talking about the components of a salary, it is worth explaining the difference between gross and net, as well as nominal and real salary.

Gross salary (wage) is the amount of remuneration from which the employer deductsto deductdeducts compulsorycompulsorycompulsory public benefits, such as social security and health insurance contributions, and an advanced payment of personal income tax. Net salary, in other words “take‑home paytake‑home paytake‑home pay”, is what remainsto remainremains after the deduction of public benefits.

It should be noted that the concept of gross or net remuneration does not appear in the labour law at all, and is colloquial in nature. The law only uses the concept of remuneration for work. Therefore, the information about remuneration contained in the employment contract without additional word definition must be understood as „gross” remuneration.

The nominal remuneration does not take into account the phenomenon of inflation. When real remuneration is given, the increase in prices in the economy is taken into account. Thus, we include in it the so‑called purchasing power of money.

How much we earn depends on many factors – for example, the region (country) in which we work or our education. However, there is a specific type of remuneration, called minimum wage, uniformuniformuniform throughout the country, below which a full‑time employee cannot be paid. This is a kind of „minimal price” on the labour market.

In Poland, the minimum wage is set annuallyannuallyannually on the basis of the Act on the minimum remuneration for work. In accordance with the act, the minimum wage is negotiated in the so‑called Social Dialogue Council and accepted by the government. It was first established for 2003 and was 800 zlotys then. From January 1, 2018 it is 2100 zlotys.

According to the data of the European Statistical Office (Eurostat), in January 2013 twenty European Union countries had some kind of minimum wage regulations. These were: Belgium, Bulgaria, the Czech Republic, Estonia, Ireland, Greece, Spain, France, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Poland, Portugal, Romania, Slovenia, Slovakia and the United Kingdom.

The minimum wage arouses many controversies. Its supporters emphasize the importance of such a regulation for combatingto combatcombating poverty and believe that the higher it is, compared to the level of average pay, the better the situation of employees. Opponents stress that wages should not be „imposed” or determined officially, but freely shaped by the market. The existence of such remuneration – in their opinion – causes an increase in labour costs, especially in the case of young employees. The increase in the level of the minimum wage also results in an increase in unemployment.

Keywords

labour market, labour force, wage, employers, employees, employer's market, unemployment, employee’s market, natural unemployment, working person, Central Statistical Office, the Labour Code, contract for specific work, contract of mandate, employment contract, juvenile, vocational training, nominal/real remuneration, gross/net salary , bonus, retirement, pension, take‑home pay, minimum wage, Social Dialogue Council, Eurostat, Convention No. 122 on the Employment Policy, International Labour Organization, Declaration on Fundamental Principles and Rights at Work, freedom of association, collective bargaining, forced/compulsory labour, slavery, decent work, child labour

Glossary