Shortage of Labor
Definition
A shortage of labor occurs when the demand for workers exceeds the available supply in a particular market or industry.
Analogy
Imagine you're hosting a party and you need 10 people to help set up, but only 5 people show up. You have a shortage of labor because there aren't enough people to meet the demand for help.
Related terms
Labor Market: The labor market refers to the interaction between employers and employees, where workers provide their skills and services in exchange for wages.
Demand for Labor: The demand for labor represents the number of workers that employers are willing and able to hire at different wage rates.
Equilibrium Wage: The equilibrium wage is the wage rate at which the quantity of labor demanded by employers equals the quantity supplied by workers, resulting in no shortage or surplus.
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