Labor Market Equilibrium

Labor market equilibrium occurs when the supply of workers matches the demand for jobs. In simpler terms, it's the point at which the number of people looking for work is equal to the number of available jobs. When this balance is achieved, unemployment is typically low, and employers can find suitable candidates for their positions without difficulty. If more jobs are available than workers, wages may rise to attract more applicants. Conversely, if there are more workers than jobs, wages may stagnate or decrease, leading to higher unemployment.