Labour is an important factor of production. In Economics, the term ‘Labour‘ is used for indicating any work, whether manual or mental, which is undertaken for a monetary consideration. It may be noted that any work done for the sake of pleasure or love or obligation is not called labour in Economics. There are some special characteristics of labour as a factor of production.
For example, the services rendered by the parents for their children, the sufferings undergone by the elders for the sake of members in a family etc., are not treated as labour in Economics. The reason is that these services do not bring any monetary income or rewards. Labour may be physical or mental. Both are equally important for the prosperity of a country. Those persons who offer their labour at a particular wage are described as labourers. In this connection the Scientists, Lawyers, Doctors, Engineers, Chartered Accountants, Income-tax practitioners etc., are known as labourers.
Types of Labour: Productive and Unproductive –
Labour is classified into two types, namely productive and unproductive labour. By the term ‘productive labour‘ we mean the creation of economic utility through the production of a good or service. In this connection, the services of Doctors towards a patient, the Magician’s performance, a musicians programme etc., are considered productive labour. The term ‘Unproductive labour‘ denotes the absence of creation of economic utility. If a musician commits mistakes and if the audience feels bore or headache to see and listen to his performance, then such labour is described unproductive. The entrepreneur’s mismanagement of financial resources or the money lender’s inability to recollect the loans etc., come under the category of unproductive labour. Hence these are called unproductive labour.
The classification of labour into productive and unproductive is not clear and definite as the Economists differ in their opinions. For example preparing food on large scale in a small family is an example of unproductive labour. But preparing food on large scale in a Hotel on commercial basis is an example of productive labour.
Characteristics Of Labour As A Factor Of Production :
The following special characteristics or peculiarities distinguish labour from the other factors of production.
1. Labour is inseparable from labourers: A fundamental peculiarity of labour is that it is inseparable from the labourers. Labourers have to render their labour in person. They have to engage themselves in productive enterprises for delivering their labour. As labour is linked with the mental or physical skills and efficiencies of labourers, it cannot be delivered by the labourers by keeping themselves away from the enterprises.
2. Labour is perishable: Labour is perishable in nature. It can’t be reserved or stored by the labourers. As a result the labourers are compelled to deliver their labour at any level of wages. If the labourers did not render their labour on a particular day, their labour is lost forever. Hence labour is perishable.
3. Labour requires special atmosphere and conditions: As labour can’t be separable from labourers, it requires special atmosphere and certain conditions. Labourers deliver labour effectively and efficiently when the conditions in and outside of the industry are conducive. They must be given sufficient leisure, reasonable hours of work, attractive and minimum level of wages, medical and health amenities. Then only labourers completely engage themselves in their work and help in maximizing output.
4. Labourer sells only his labour and not himself. A peculiarity of labour is that labourer delivers his labour. He sells only his labour and not himself.
5. Labour has less mobility: Labour is less mobile. Most of the labourers do not like to move from one place to the other place, from one occupation to other occupation due to several reasons. Attachment to the native place, Linguistic problems, cost of living, transport cost, non-adjustability in new areas, property, children’s education, close intimacy with the people of an area etc. are some of the reasons for less mobility of labourers.
6. Labour has a weak bargaining power: Normally labourers have weak bargaining power. This is due to the reason that their labour is highly perishable in nature. So they are ready to offer their services at any wage level. As most of the labourers are poor, they can’t withstand and continue their existence without work. In order to protect themselves and their family, they accept any wage. Another cause for weak bargaining power of labourers is that their supply is more than the demand for labour. Hence they have weak bargaining power.
7. Labour is heterogeneous: Labour is described as a heterogeneous factor. Labourers differ in their efficiency. All labourers can’t have equal efficiency. Some labourers have more efficiency and others have less efficiency.
8. Labour is not transferable: Unlike land and capital, labour is not transferable from the labourers. The labourers sell their skills or capacities in the productive activities by their personal involvement. We can’t transfer the skill or services of one labourer to the others. For example, it is not possible to transfer the intelligence and efficiency of a doctor to a lawyer or Engineer. But in the case land and capital, it is easy to transfer the ownership through sale deeds.
9. Supply of labour is fixed at a particular time: The supply of labour can’t be increased or decreased over night. Hence, the supply of labourers is fixed and inelastic in the short period. But in the long run the supply of labour can be raised by increasing the Population. Hence the supply curve in the short period is inelastic.
