Ralf Einert


Studies of Economic Change

Introduction (Labour Market)

The marked for goods and services is in order: If there is no final agreement about the price between buyer and purchaser goods and services are not even produced. Therefore supply and demand develop according to the generally known economic equilibrium theories.

The labour market is different: Even if there is no demand for labour humans have to offer their labour force in any case as they simply exist. Offered wages below the poverty line are the evidence that today many employers do not have any morality and sensibility at all anymore.

How it can happen that the "labour market" does not depend on market mechanisms nowadays is shown according to the development of the labour supply and labour demand in connection with the "law" of diminishing marginal utility and the idea of the evolution theory:

Labour demand:

The productivity increases caused by the scientific and technological development. As a consequence the demand for highly qualified experts and managers increases as well while repetitive jobs are made redundant or are shift to low-wage countries. Labour supply and demand converge more and more.

Therefore the curve shifts to the right and gets steeper over the time.

Labour supply:

According to the increasing gap between the rich and the poor which results from the development of the labour demand the lower wage groups increase their labour supply because of the fear of losing social status. Contrary the upper wage groups are able to reduce their labour supply - they do not need to work any more.

Therefore the curve rotates and gets steeper over the time.

"Labour market":

If the curves of the development of labour supply and demand are put on the top of each other we can see that the intersection between supply and demand disappears.

The "labour market" as a market does not exist any longer.


The reason for appearance of unemployment is system immanent. Therefore unemployment is not caused individually.

The overcome of the economic equilibrium theories requires further basic research in this subject.