Assignment First





作業代寫 :勞動力過剩造成的失業情況

However, even when the wages are in equilibrium, the migration does not stop naturally. People still move to urban areas driven by social motives like better access to living facilities. The Harris-Todaro model takes into account only the economic motives like better wages or better jobs while considering the effect of migration. In essence, they have assumed that the lifestyle between the urban and rural areas is equivalent, if not the same. But, in reality, there exists a gap between the kind of life an urban resident leads and a rural resident leads. Urban people have better access to infrastructure, better healthcare facilities, better communication facilities, improved access to water resources, improved access to electricity, and so on. On the contrary, rural areas in developing countries are deprived of most of these facilities. They have poor roads, not so good means of transportation and communication, unequipped hospitals and so on. So, the migration does not occur solely based on economic motives. It is also driven by social motives, the most important of them being the desire to lead a better life. What the Harris-Todaro model fails to account for is this desire. However, it lays the basics for the analysis of movement of people from one place to another.
Furthermore, what the migrants don’t realise is that an excess of labour even in the urban areas creates a situation which is similar to the one, in fact sometimes worse than the one they used to have in the rural areas. Due to over-burden of labour in the urban areas, the wage declines until there is equilibrium i.e. the demand of labour and supply of labour stabilise at a suitable wage rate. This wage rate often gets so low that sustenance in the urban areas becomes a problem particularly given the fact that they have a higher cost of living. A higher cost of living implies that the migrants have to spend more on food, clothes and shelter due to which they have lesser net income and often the situation gets worse. The migrants end up staying in slums with worse access to basic facilities.
Most of the times however, the wage is not as free to slide up and down the scale as one would expect in a free market. Either due to trade unions or due to government legislations, the wages usually have a lower bound. This is where the global economy comes into picture. In a pursuit to ensuring a better lifestyle, the legislations or trade unions try to force the wage to a level which is sustainable for the workers. In the face of such a situation, with minimum wage fixed, when there is a higher supply of labour, the firms are not ready to pay wages which do not conform to it. So, the demand declines so that the market again reaches an equilibrium thereby reducing the need of labour. This, leads to unemployment in the economy.