Geography & History Notes | KCSE, NECTA, ZIMSEC & GCSE

  It assumes that employers can vary the units of labour employed and this is largely true in most occupations. It assumes that workers with higher marginal physical product get higher wages than those with low marginal physical product and this is true in occupations where piece rate system applies. The government has no influence over wages in the private sector of ar. eloping countries like Uganda. Trade unions in developing countries are weak and have no or limited effect on wages Limitations of the marginal productivity theory of wages All units of labour are not homogenous and workers productivity varies. A of labour differs from another in terms of skills, education attainment physical ability. Therefore, efficiency of labour differs from worker to worker, is therefore wrong to assume that all units of labour are homogeneous. Labour tends to be immobile yet the theory assumes perfectly mobility, theory assumes perfect mobility of labour between different employments places. ...