Supply and Demand Balance in Labor Market

Supply and demand balance in the labor market refers to the relationship between the number of available workers (supply) and the number of jobs available (demand). When demand for workers matches supply, wages tend to stabilize, and employment levels are steady. If demand exceeds supply, wages typically rise as employers compete for workers. Conversely, if supply exceeds demand, wages may fall, and some jobs may go unfilled. This balance helps determine employment rates and wage levels, naturally adjusting as economic conditions change to ensure an efficient allocation of labor resources.