Labor hoarding refers to:

a. using less capital in production so that more workers will have jobs.

b. contractually preventing workers from obtaining jobs with competing firms.

c. continuing to employ workers during a recession to ensure they will be available in the recovery.

d. keeping workers in low-wage jobs in order to reduce labor costs.

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31 January, 01:13

Labor hoarding refers to:

a. using less capital in production so that more workers will have jobs.

b. contractually preventing workers from obtaining jobs with competing firms.

c. continuing to employ workers during a recession to ensure they will be available in the recovery.

d. keeping workers in low-wage jobs in order to reduce labor costs.

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Answers (1)

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Francesca Hebert · Answer 1

The correct answer is letter "C": continuing to employ workers during a recession to ensure they will be available in the recovery.

Explanation:

A recession is the stage of the economic cycle in which the growth downturns. This causes investments to drop and, as a result, the unemployment rate increases. However, some entities decide to keep their labor force intact during recessions even if it implies reducing employees' productivity since there is not much to do. This practice is called labor hoarding.

Labor hoarding allows companies to have the necessary level of the workforce for the time the economy recovers. Firms engaging in this practice are already planning their future operations instead of focusing only on the current financial hardship.