Glossary
Dual Labor Market
Apr 6, 2024

What is a Dual Labor Market?

The dual labor market is a system that divides workers into two groups, the primary and secondary labor markets. These markets differ in skills and wages, which can create a situation where certain jobs are inaccessible to those who don't have them.

Why do we have a dual labor market?

The dual labor market is a result of the Great Depression. It was created to allow employers to hire workers for different wages based on their skill level, experience, and race.

The dual labor market theory states that there are two types of workers: high-skill/high-wage earners and low-skill/low-wage earners. The idea behind this theory is that if you have more education or experience in your field, then you will be paid more than someone who doesn't have those things.

What is the difference between primary and secondary labor markets?

The primary labor market consists of jobs that offer high wages, job security, and benefits. These jobs typically require higher education or specialized skills, and they are usually found in large corporations or government agencies. Workers in the primary labor market have access to training programs and opportunities for career advancement.

In contrast, the secondary labor market consists of jobs that offer lower wages, little to no job security, and few or no benefits. These jobs are often part-time or temporary, requiring lower skills or education. Workers in the secondary labor market are typically employed in retail, food service, or other low-skilled positions.

The dual labor market in economics

A dual labor market exists when there is a significant difference between the primary and secondary labor markets. In such a market, there is a clear division between workers who have access to high-quality jobs and those who do not. This division is typically based on factors such as education, skills, and social status.

The consequences of a dual labor market can be significant. Workers in the secondary labor market may experience job insecurity, low wages, and limited opportunities for career advancement. This can result in a cycle of poverty and inequality, as workers in the secondary market struggle to make ends meet.

In addition, a dual labor market can lead to social unrest and economic instability. If a significant portion of the population is excluded from high-quality jobs, it can lead to dissatisfaction and unrest, which can spill over into other areas of society.

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