Elasticity or inelasticity of labor question...?

Question

Is the demand for labor relatively elastic or relatively inelastic?

What factors make labor's demand elastic or inelastic?

Answer 1

That depends on what kind of "labor" you are talking about.  If you are talking about ditch diggers or fry cooks, it is relatively elastic, meaning the if wages increase by a little, a lot less will be hired.  If you are talking about nuclear powerplant operators or rocket scientists, then it is more inelastic, meaning that wages can increase by more and we will still need the same number of those jobs.

The main reasons are because of the amount of skill required to do a job and the necessity of that job.  McDonald's can pay anyone minimum wage to drop fries, so why would they pay someone who wants more when they can just go find another person who will accept minimum wage?  And MIT needs highly trained and well-established people to teach nuclear physics, so if the top physicists in the field started demanding more money, they'd have little choice but to pay them (or end their nuclear physics department)