Dual Labor Market

What is the Dual Labor Market?

In 1971, Doeringer and Piore, two American economists, noticed that the labour market in the US appeared to be divided into primary and secondary spheres and coined the term "dual labor market." According to the authors, jobs in the primary market are distinguished by relatively high salaries, status and responsibilities, career mobility, and good working conditions. Jobs in the secondary sector, on the other hand, had negative characteristics such as low pay and working conditions, few or no promotion opportunities, and low levels of job security.

Jobs in the secondary sphere were frequently filled by women, ethnic minorities, and people from disadvantaged backgrounds and upbringings when the authors were writing. The initial analysis of the dual labor market asserted that secondary sector workers either chose those jobs or were there because they were less reliable or skilled than primary sector workers. Discrimination was only later brought to light.

The concept of a dual labor market falls under the larger umbrella of labour market segmentation; some analysts believe the market is divided into far more than two sectors. For example, the informal economy is the 'cash in hand' economy that operates outside of traditional legal and administrative frameworks.

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What is the difference between primary and secondary labor markets?

Primary Labor Market

• Unionized: Often unionized, offering better job security and benefits.
• Job Security: Higher levels of job security.
• Benefits: Access to comprehensive benefits packages.
• Work Conditions: Generally better working conditions.
• Advancement Opportunities: More opportunities for career advancement.
• Native Residents: Frequently filled by native residents who are born and raised in the local economy.
• Education and Skills: Workers typically have higher education levels and more specialized skills.

Secondary Labor Market

• Non-Unionized: Less likely to be unionized.
• Low Pay: Lower wages and compensation.
• Poor Working Conditions: Often associated with poor working conditions.
• Limited Advancement: Few or no opportunities for career advancement.
• Job Insecurity: Unreliable job security with high turnover rates.
• Demographics: Frequently employs migrants, ethnic minorities, and individuals from disadvantaged backgrounds.
• Lower Skills and Education: Workers often have lower levels of education and fewer specialized skills.

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