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Labor market economics.

Labor Market Economics.

Labor Market Economics. By Saul D. Hoffman. Englewood Cliffs, NJ, Prentice-Hall, Inc., 1986. 354 pp. $28.95.

The first interesting thing about this book appears on its cover--the title. Although the author may assume that his readership would pay no particular attention to the word "market,' that is precisely the word that piques the interest of the classical economist. Has a modern text finally been written which begins with the premise that labor is, among other things, a commodity which is bought and sold? Yes, and Saul D. Hoffman is its author.

Indeed, a major strength of this book is its sound economic analysis, which is based on the understanding that labor is not magically exempt from the economic laws and pressures which operate in a market economy. (Anticipating the objections of those who would say that today's economy is too far removed from the free-market ideal to justify such an approach, Hoffman has included a convincing defense.) The use of the traditional economic tools of analysis, avoiding the need to reinvent the wheel in order to examine the subject, contributes to the effectiveness of this text, which uses a "neoclassical' perspective.

This comprehensive study is well written and well organized. There are separate chapters on demand for labor, labor supply, human capital, discrimination, unions, income, and unemployment, as well as one on "further topics.' "Applications sections' are employed, many of which delve into real-world cases. Much of the author's analysis is quite enlightening, while imprecisions are mostly minimal. The exception is the statement: ". . . it should be obvious that the wage income of all workers is exactly equal to the labor costs of all firms.' The author should have added a section on benefits as an aspect of compensation, or included a disclaimer stating that the term "wages' is used synonymously with "compensation.' Also, because the idea of labor cost is not useful without considering productivity, it cannot be considered in such absolute terms. In a lesser violation, Puerto Rico is listed as one of the "countries' (sic) which has minimum wage legislation.

Although some equations and graphs merely quantify the obvious, most are helpful. Hoffman makes good use of new ideas and research. Divergent opinions are presented in a balanced, unbiased manner. Overall, Labor Market Economics is an excellent choice for the introductory college course and for those interested in the subject.
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Author:Weinert, Michael
Publication:Monthly Labor Review
Article Type:Book Review
Date:May 1, 1986
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