What impact does a free market economy have on jobs?

Answer 1

Answer 1

It means the market for jobs is driven by businesses and the economy. So, if economy is slow, businesses are losing money, that would mean potentially lack of growth. Lack of growth across the sector would mean widespread redundancies and lack of jobs. In a free market economy - almost everything is driven by consumer behavior. Businesses rely on consumers and so do jobseekers. Jobseekers need jobs to ultimately become consumers for businesses. Businesses cannot survive without consumers willing to buy their goods and services. What this means to have any major positive impact on the economic cycle, one has to fuel consumer spending and the only way to do that is to put the money back in the pockets of taxpayers. In a free market, the government does not get involved in regulating markets and setting supply and demand. the market is supposed to handle that on its own. It is essentially stablization of the economy based on the factors within the market adjusting on their own - primarily determined by the forces of supply and demand rather than any artificially driven intervention.

Answer 2

In free market, disparity in job market increases. However, this is offset again by the supply and demand for skilled and unskilled workers as well as for the jobs. Ultimately, market equilibrium provides for the redistribution and balance. This is often as a result of market forces driven in form of competition. However, competition does not need to be fueled, it should be natural as the market should allow for new entrants as there is a high profit incentive. As a result, the market provides a way to reduce prices. In terms of jobs, more supply of workforce compared to jobs would mean lower wages as there more workers competing for each job.