Question

Business leaders often say that there is a "shortage" of skilled workers, and so they argue that immigrants need to be brought in to do these jobs. For example, an AP article entitled "New York farmers fear a shortage of skilled workers," pointing out that a special U.S. visa program, the H-2A program, "allows employers to hire foreign workers temporarily if they show that they were not able to find U.S. workers for the jobs." (Source: Thompson, Carolyn. May 13, 2008. N.Y. farmers fear a shortage of skilled workers Associated Press.) How do unregulated markets cure a "labor shortage" when there are no immigrants to boost the labor supply?

Answer 1

Answer:

Let the price of labor increase.

Explanation:

An unregulated market is also termed as a free market economy. Here, the government does not interfere in the business of supply and demand. Resources are determine by the authority without any government intervention.

In order to cure the labor shortage in an unregulated market when there is no immigrants for labor supply, the prices of the labor may be increased. In doing so it will affect the supply and demand of labor. As the labor price will increase, the supply of labor will also increase as now more and more labor wants to work in order to get a high wage.

So increasing the price of the labor will cure for the labor shortage.