In mainstream economic theories, the supply of labor is the total hours (adjusted for intensity of effort) that workers wish to work at a given real wage rate.
Labor supply curves are derived from the 'labor-leisure' trade-off. More hours worked earn higher incomes but necessitate a cut in the amount of leisure that workers enjoy. Consequently there are two effects on the amount of desired labor supplied due to a change in the real wage rate. As, for example, the real wage rate rises the opportunity cost of leisure increases. This tends to cause workers to supply more labour (the "substitution effect"). However, as the real wage rate rises, workers earn a higher income for a given number of hours. If leisure is a normal good - the demand for it increases as income increases - this increase in income will tend to cause workers to supply less labor (the "income effect"). If the "substitution effect" is stronger than the "income effect" then the labor supply curve will be upward sloping and vice versa.
From a Marxist view a labor supply is a core requirement in a capitalist society. In order to avoid Labor shortage and ensure a labor supply, a large portion of the population must not possess sources of self-provisioning, which would allow them to be independent, and they must instead be compelled, in order to survive, to sell their labor for a subsistence wage.
In the pre industrial economies wage labor was generally undertaken only by those with little or no land of their own.
Famous quotes containing the words labour and/or supply:
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Under the conceiving moon, on the high chalk hill,
And there this night I walk in the white giant’s thigh
Where barrren as boulders women lie longing still
To labour and love though they lay down long ago.”
—Dylan Thomas (1914–1953)
“If you have great talents, industry will improve them: if you have but moderate abilities, industry will supply their deficiency.”
—Sir Joshua Reynolds (1723–1792)