globals [average_wage years months production ; initial factory's production labour_force ; population in working age total_labour_cost ; labour cost supported by all factories employment_rate unemployment_rate ] patches-own [factory_production ; individual factory's production productivity_growth_rate ; productivity monthly variation factory_trade-union_level ; trade-union weight into the factory labour_cost ; labour cost supported by the factory wage ; wage paid by the company to each worker factory_employed ; workers number in the factory ] turtles-own [trade-union_level ; worker's trade-union membership life_years ; worker's life years ] to setup ; agents setting ca setup-factories setup-turtles end to setup-factories ask n-of n.factories patches [set pcolor blue ; companies are blue squares... set factory_production production + 700 ; ...with an initial production level, set wage initial_wage ; they initially pay a fixed wage ask neighbors [ set pcolor black ] ; patches cannot be neighbours ] end to setup-turtles create-turtles n.labour_force [ setxy random-pxcor random-pycor ] ; workers are randomly disposed ask turtles [set color white set shape "person" set life_years life_years + random (40) + 20] ; they have an initial age end to go ; model development employment_dynamics die_factories die_turtles do-plots end to employment_dynamics ; worker - company relationship ask turtles [set life_years life_years + (1 / 12)] ask turtles-on patches with [pcolor = black] ; workers search job moving on the map [fd 2 set heading random 360 set color green ] ask patches with [pcolor = black] [set wage 0 ; in the areas without factories... set factory_production 0 ; ... there are not wage and production ] ask turtles-on patches with [pcolor = blue] ; when workers find a factory... [ifelse factory_production < wage * count turtles-here ; ... they ask if there is job availability [fd 2 ; if not, they return to move set heading random 360 set color green] [fd 0 ; if they find job, remain in the company for working set color red] ] ask turtles-on patches with [pcolor = blue] ; every employed man increases his membership... [set trade-union_level (trade-union_level + (1 / 12) ) ] ; ...to the trade-union ask turtles with [ color = green] ; unemployed men don't join to the trade-union [set trade-union_level 0] ask patches with [pcolor = blue] ; the companies have an... [set productivity_growth_rate random-normal average_productivity_growth std_dev_apg ; ... exogenous productivity growth rate ifelse any? turtles-here ; production changes if there are workers [set factory_production (factory_production + factory_production * productivity_growth_rate)] ; ... in the factory [set factory_production (factory_production + 0)] ifelse wage_is_productivity? ; if wage is linked to productivity... [ifelse any? turtles-here [set wage (wage + wage * productivity_growth_rate)] ; ... then it grows with productivity [set wage wage] ] [set wage wage] ifelse trade-unions? ; if there are trade-unions... [set factory_trade-union_level sum [trade-union_level] of turtles-here ; their weight grows with individual... if factory_trade-union_level < 15 ; ... trade-union membership. [set wage wage] ; when trade-union reaches higher... if factory_trade-union_level >= 15 ; ... power levels, it can influence... [set wage (wage + 0.015)] ; ... the definition of wage. if factory_trade-union_level >= 60 [set wage (wage + 0.02)] if factory_trade-union_level >= 150 [set wage (wage + 0.03)] if factory_trade-union_level >= 290 [set wage (wage + 0.015)] ] [ask turtles-here [set trade-union_level 0] ] ; calculation of labour cost... ifelse any? turtles-here ; ... for a company [set labour_cost (0 + (wage * count turtles-here with [color = red]) ) ] [set labour_cost 0] set factory_employed (0 + count turtles-here) ; workers number in the factory ] set total_labour_cost (0 + sum [labour_cost] of patches with [pcolor = blue] ) ; calculation of labour cost... ; of all companies ifelse count turtles with [color = red] > 0 [set average_wage (total_labour_cost / (count turtles with [color = red] ) ) ] ; calculation of the... [set average_wage 0] ; average wage paid to workers ask n-of (n.factories - count patches with [pcolor = blue]) patches ; creation of new factories... [if count patches with [pcolor = blue] < n.factories ; ... to keep them costant [set pcolor blue set factory_production production + 700 set wage initial_wage ask neighbors [ set pcolor black ] ] ] set months months + 1 ; one month after... set years months / 12 create-turtles random-normal (2) (10 / 12) ; every month there is new labour force [set color white set shape "person" setxy random-pxcor random-pycor set life_years life_years + 20 ] end to die_factories ask patches [if factory_trade-union_level > 350 ; companies should leave the market when... [set pcolor black ; ... the trade-union reaches exaggerated... set factory_trade-union_level 0 ; ... power levels set labour_cost 0] ] end to die_turtles ask turtles [if life_years > random-normal 65 5 ; men are not immortal [die] ] end to do-plots set-current-plot "employment_rate" ; analysing employment / labour force ratio plot (count turtles with [color = red] / count turtles ) set-current-plot "unemployment_rate" ; analysing unemployment rate plot (count turtles with [color = green] / count turtles) set-current-plot "average_wage" ; wage paid to workers in mean plot ( average_wage ) set labour_force count turtles ; counting labour force set employment_rate (count turtles with [color = red] / count turtles ) set unemployment_rate (count turtles with [color = green] / count turtles) end @#$#@#$#@ GRAPHICS-WINDOW 270 10 775 536 16 16 15.0 1 10 1 1 1 0 1 1 1 -16 16 -16 16 0 0 1 ticks CC-WINDOW 5 550 994 645 Command Center 0 BUTTON 13 10 76 43 setup setup NIL 1 T OBSERVER NIL NIL NIL NIL SLIDER 27 164 199 197 n.factories n.factories 5 100 20 1 1 NIL HORIZONTAL SLIDER 27 211 199 244 n.labour_force n.labour_force 10 1000 500 1 1 NIL HORIZONTAL SLIDER 27 255 199 288 initial_wage initial_wage 1 30 10 1 1 NIL HORIZONTAL PLOT 785 198 985 348 employment_rate months NIL 0.0 10.0 0.0 1.0 true false PENS "default" 1.0 0 -2674135 true PLOT 785 19 985 169 unemployment_rate months NIL 0.0 10.0 0.0 1.0 true false PENS "default" 1.0 0 -10899396 true SLIDER 9 296 224 329 average_productivity_growth average_productivity_growth -0.01 0.01 0 0.001 1 NIL HORIZONTAL SLIDER 27 337 199 370 std_dev_apg std_dev_apg 0 0.1 0 0.001 1 NIL HORIZONTAL MONITOR 205 10 262 55 years years 2 1 11 BUTTON 90 10 153 43 go go T 1 T OBSERVER NIL NIL NIL NIL MONITOR 134 416 221 461 labour_force labour_force 10 1 11 PLOT 785 360 985 510 average_wage months NIL 0.0 10.0 5.0 50.0 true false PENS "default" 1.0 0 -16777216 true MONITOR 27 416 123 461 average_wage average_wage 2 1 11 MONITOR 205 56 262 101 months months 17 1 11 SWITCH 14 64 146 97 trade-unions? trade-unions? 0 1 -1000 SWITCH 14 104 193 137 wage_is_productivity? wage_is_productivity? 1 1 -1000 MONITOR 13 475 123 520 employment_rate employment_rate 2 1 11 MONITOR 134 475 258 520 unemployment_rate unemployment_rate 2 1 11 @#$#@#$#@ WHAT IS IT? ----------- The model tries to explain the possible existing relationships between labour market and trade unions. Starting from hypothesis of perfect competition, with work as the only production factor, the rising of forms of firm labour trade unions modifies the equilibrium in the wage levels and in the ratio employment-unemployment in the sense of an increase of the first and a diminution of the last. HOW IT WORKS ------------ Initially, firms and labour force distribute themselves randomly over the market: firms face an initial level of production and offer a basic wage, both common for the whole set. We need to remember that each company maximum hiring capacity is limited by the level of production, because this one is totally used to pay workers. Population in working age looks for a job, and, as unemployed, they accept every wage offered. As the months pass, every worker (red turtles) develops an individual trade union level that contributes to form the firm trade union level: increasing the level in time, when it reaches determined thresholds, that can be seen as the moment of a new trade union request, firms have to change the wage offered to their employers. With the increase in the wage levels, firms compare their production to the new wage, sacking workers, if the previous labour cost exceeds the actual value of production, or hiring workers if the variation in wage permits to extend their number of employed. Sacked ones (green turtles), now, start again to look for a job, asking firms if they have possibility to employ. Fundamental in the model are the thresholds and the corrispective requests: at the beginning, trade union reaches the first threshold and asks a low increase in wage, with respect to the initial one; further more the requests become increasingly larger, untill the last periods of trade union level evolution, when wage is relatively higher than the beginning and the will for an ulterior increase in wage levels is attenuate by the concern of new dismissals. When is reached a threshold and while approaching to the new one, contracts increase every month by the determined value at that level of trade union. The upper bound in trade union indicator implies the death of the firm. This happens because the exaggerated trade union level oblige the firm to operate in conditions of non competition: in order to mantein their capacity to stay on the market, they should pay an inferior wage, impossible here, given our hypotetical condition. The "world" works as a continuum, with constant replacement in population (thanks to the birth of new labour force and the death, "retirement", of the elders), and growth in productivity, that allows the firms to increase their possibility to employ new workers. HOW TO USE IT ------------- Use the sliders to pick the initial settings for the model. N.FACTORIES: allows the operator to decide the starting number of firms in the simulation, up to fifty firms. This value holds in time, even in case of disappearence of failed enterprises, thanks to the arise of new ones, in proportional number. N.LABOUR_FORCE: it is possible to change the number of agents from 10 to 1000. Unlike what happens with factories, here the population in working age growths in time. This is due to the characteristics of workers: at the setting up, they sprout with a random age between 20 and 60 and has an average retirement age of 65. In the later stages, when new turtles are born, all of them assume the value of 20, as the age of entry in working world. What grants the growth is that every month two new agents enter into the world and begin to look for an occupation: anyway, population growth is not unending, but it come to a stabilization after xxx years. INITIAL_WAGE: with this slider it is possible to modify the starting wage offered by all firms. AVERAGE_PRODUCTIVITY_GROWTH and STD_DEV_APG: the operator can here vary the evolution of productivity in the market, for the whole set of factories: the average growth it is included between -1% and 1% for month, with a possible standard deviation that assumes the maximum value of 10% and allows to strongly differentiate the variability of production. Two switches are also included, TRADE-UNIONS? and WAGE_IS_PRODUCTIVITY?, that give birth to four different scenery: the presence or not of trade unions, and the existence or absence of links between wage and productivity. The most important dynamics, employment and unemployment rate and the average wage in the market, are examinated in separated plots; tied up with them, the monitors of labour_force, employment_rate, unemployment_rate and average_wage give at any time the exact value of the amount investigated. Obviously there are counters for the passing time, expressed in months, the basic cpunt unit, and in years, to facilitate the interpretation of the model SETUP and GO buttons allows the operator to initialize the model's variables and to start the simulation. THINGS TO NOTICE ---------------- It is interesting that every slider and switch can be modified during the progress of the model. Changing the number of firms and labour force in the world, it varies the effect in the long term on employment and unemplyment rate. Also an extrime high or low value in the initial wage determines different effects on the evolution of the simulation. THINGS TO TRY ------------- Try to change the four scenery at the beginning of the setting up and during the progression of the individual behaviours: what happens when trade unions appear in the market, what when they disappear? What happens if we do not anchor the wage to the productivity evolution: does it change in a singular way? Try also to vary the casuality and the distribution in the productivity growth to see how different size of production are linked with the process of trade union rising and with the firms' life. EXTENDING THE MODEL ------------------- The model could be complicate by adding a reserve wage for each agent and so the possibility to choose if work at the condition proposed by the factories or, instead, wait untill wage level would rise. Other forms of interaction could be the diffusion to neighbor firms of wage or trade union conditions of firms with higher levels: this would accelerate the formation of new wage requests and the movements in employment/unemployment rate. CREDITS AND REFERENCES ---------------------- BRUCCHI LUCHINO (2001), Manuale di Economia del Lavoro, Il Mulino, Bologna. @#$#@#$#@ default true 0 Polygon -7500403 true true 150 5 40 250 150 205 260 250 airplane true 0 Polygon -7500403 true true 150 0 135 15 120 60 120 105 15 165 15 195 120 180 135 240 105 270 120 285 150 270 180 285 210 270 165 240 180 180 285 195 285 165 180 105 180 60 165 15 arrow true 0 Polygon -7500403 true true 150 0 0 150 105 150 105 293 195 293 195 150 300 150 box false 0 Polygon -7500403 true true 150 285 285 225 285 75 150 135 Polygon -7500403 true true 150 135 15 75 150 15 285 75 Polygon -7500403 true true 15 75 15 225 150 285 150 135 Line -16777216 false 150 285 150 135 Line -16777216 false 150 135 15 75 Line -16777216 false 150 135 285 75 bug true 0 Circle -7500403 true true 96 182 108 Circle -7500403 true true 110 127 80 Circle -7500403 true true 110 75 80 Line -7500403 true 150 100 80 30 Line -7500403 true 150 100 220 30 butterfly true 0 Polygon -7500403 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