The Markets for the Factors of Production (Term Paper Sample)

Shortage of Skilled Labor in Canada
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Topic: The Markets for the Factors of Production
The Markets for the Factors of Production
This topic examines the factors of production. The factors of production entail inputs used by firms to generate goods and services. These factors of production incorporate land, capital, and labor. The market for factors of production is similar to the market for goods and services in many ways. However, the primary difference between the market for products and factor market is that the demand in factor market is derived demand CITATION Man14 \l 1033 (Mankiw & Cosgrove, 2014). Some of the factors that affect the demand for labor include the output price, technological change, and the supply of other inputs. On the other hand, the supply of labor is influenced by factors like immigration, changes in tastes, and shifts in alternative opportunities.
Overview of Article One
The article “Canada facing labour shortage: BDC boss” by Frank Peebles on February 7th, 2019 talks about the shortage of labor in Canada, impacts on businesses, and possible solutions to this issue. The research commissioned by the Business Development Bank of Canada (BDC) reveals that the major problem facing firms in Canada currently is the shortage of labor. The shortage of labor in this country emanates from the aging workforce, the growing economy, and inadequate individuals entering the workforce CITATION Fra19 \l 1033 (Peebles, 2019).
The shortage of labor means that the businesses in Canada have to reduce their operations even if other factors are conducive. This situation will, therefore, drag down the local economies of communities and towns all over the country. The article gives some of the measures that businesses in this country can undertake to lessen the impact of labor shortage on their operations. Foremost, the businesses are encouraged to take advantage of the Immigrant Worker Program to find the required workforce to avail the needed labor in the firms. Investing in technology to automate sections of the company for which they cannot locate suitable workers will also play a crucial role in helping the businesses to overcome the issue of the labor shortage CITATION Fra19 \l 1033 (Peebles, 2019).
Furthermore, the businesses should enact a variety of in-house social plans to keep the personnel engaged and thus minimize worker turnover and increase retention rates. The other approaches for dealing with the shortage of labor suggested in the article include finding the underemployed persons within Canada, bringing back the retired employees to the workforce, and reaching out to the disabled population.
Overview of Article Two
The article “Canada’s Labour Shortage Is Actually Harming The Economy At This Point” by Daniel Tencer on January 17th, 2019 highlights the problem of the labor shortage in Canada, the effects of this problem, and potential solutions. According to the article, the issue of the labor shortage in Canada is worsening and businesses have started feeling the impact of this problem since they are unable to undertake certain investments because of insufficient labor. The study conducted by the Business Development Bank of Canada showed that 53% of small and medium-sized enterprises will be hindered from undertaking new investments in 2019 due to lack of sufficient labor. The most affected regions by the shortage of labor are British Columbia, Quebec, and Ontario CITATION Dan19 \l 1033 (Tencer, 2019).
One of the causes of the labor shortage in Canada is the aging population. In this country, a significant number of baby boomers are approaching the retirement age. This situation has slowed down the increase in the labor force and making it difficult for businesses to get workers. Skill mismatch has also been pointed out as a factor contributing to the shortage of labor across the country. The article goes ahead to suggest that the firms should make use of non-traditional networks such as older workers, young recent graduates and immigrant communities to tackle the problem of labor shortage CITATION Dan19 \l 1033 (Tencer, 2019).
Economic Analysis
The labor shortage is an economic condition in which the employers or businesses believe that there are inadequate qualified personnel or candidates to fill the existing or upcoming vacancies. Normally, labor shortage can be good news to employees as this implies higher wages. However, for employers, labor shortage presents a problem since as this could imply deploying personnel who fall short of particular skills. In Canada, the labor shortage is particularly a major issue among small and medium-sized enterprises (SMEs). The regions that are most affected by the scarcity of labor include Atlantic Canada, Ontario, and British Columbia while the most hit sectors include manufacturing, construction, and retail trade CITATION Bus18 \l 1033 (Business Development Bank of Canada, 2018).