Secondary labor market
The secondary labor market is the labor market consisting of high-turnover, low-pay, and usually part-time or temporary work. Sometimes, secondary jobs are performed by high school or college students. The majority of service sector, light manufacturing, and retail jobs are considered secondary labor.
A secondary-market job is distinct from a "secondary worker". The latter term refers to someone in a family (traditionally, the wife or a child) who earns a smaller income than the "breadwinner" in order to supplement family income.
Challenge to economics
The existence of the secondary labor market challenges classical explanations of the functioning of the labor market. Classical and neoclassical economists conceived of the labor market as a commodity market: the concurrent interaction of labor supply (rational workers seeking their well-being) and labor demand (rational employers searching to maximize their profits) should determine general employment and wage levels.
Additionally, the existence of ethnic enclaves further challenge the neoclassical economic thought as immigrants are able to enter a supposed third labor market, which cater specifically to the needs of ethnic minorities.
These traditional theories leave unexplained major real-life issues, such as the large differences observed among wages and employment conditions in the current labor market. The Neoclassical school had argued that these differences were due to disparities in worker productivity based on employees' different human capital endowments, but as critics have pointed out, most of them would be due to institutional factors more than to economic causes. In other words, it is not people that are different but rather job characteristics, and it is not human productivity that is behind the differences but rather market, technical, organizational, and political factors.
- Bewley, Truman (May 1995). "A Depressed Labor Market as Explained by Participants" (PDF). The American Economic Review. 85 (2): 250–254.
- "What Is the Difference Between the Primary and Secondary Labor Market?" (PDF). Burton Blatt Institute, Syracuse University. Technical Assistance and Continuing Education (TACE) Center Region IV. Retrieved 5 June 2014.