<blockquote>
<p>My understanding is that &quot;marginal disutility of labor&quot; refers to (mental or physical) adverse effects of each additional time-unit of labor expended. Is this correct?</p>
</blockquote>
<p>Yes this is correct.</p>
<blockquote>
<p>What would it mean then to say marginal disutility of labor is equal to the real wage?</p>
</blockquote>
<p>It means that in this scenario real wage is exactly as high as needed for the person to provide the labor they provide on margin. If real wage would be lower than marginal disutility of labor a person would provide less labor on margin. If real wage is higher than marginal disutility of labor a person would likely seek to increase their working hours. If they are equal you are in some sort of stable equilibrium where person, on margin, is content with their current labor supply.</p>

CC BY-SA 4.0
2023-06-27T00:47:38.640Z
2023-06-27T00:47:38.640Z
1muflon1
<p>&quot;My understanding is that &quot;marginal disutility of labor&quot; refers to (mental or physical) adverse effects of each additional time-unit of labor expended. Is this correct?&quot;</p>
<p>Yes, and the marginal disutility of labor (eventually) monotonically increases—you might think of it as the &quot;evil twin&quot; of marginal utility which it, in effect, mirrors.</p>
<p>&quot;What would it mean then to say marginal disutility of labor is equal to the real wage?&quot;</p>
<p>You cannot compare the real wage to the disutility of labor directly. This is apparent, at least, from dimensional analysis: No dollar value can equal equal any disutility value. However, Keynes does not suggest directly comparing the wage to the disutility of labor in the quotation given: &quot;'[workers can] bring their real wages into conformity with the marginal disutility of the amount of employment offered by the employers at that wage.'&quot;</p>
<p>Keynes' statement is awkward and seems to suggest that he doesn't fully appreciate the neoclassical labor-consumption equilibrium. However this is more or less right. However, instead of workers &quot;bring[ing] their real wages into conformity with the marginal disutility of the amount of employment offered by the employers at that wage[,] they &quot;bring their&quot; hours of work &quot;into conformity with... the wage.&quot; Specifically, in perfect competition, and other things being equal, the marginal disutility of labor will equal the marginal utility of the wage. This is evident from marginal analysis. Imagine the vertical axis of an imagined graph as utils, and the horizontal axis as hour of labor. The wage is fixed, which is consistent with the neoclassical long-run assumed in this discussion. Assuming U&quot;(c)&lt;0, where U is the utility consumption, and c is consumption ~ that the utility of consumption decreases monotonically at the margin, the utility of the wage incrementally decays at the margin, so each additional dollar(s) earned (which is the hourly wage) for each additional hour of work, decays. This is therefore graphed as a downward (left-to-right) sloping curve.</p>
<p>Now, assuming D&quot;(l)&gt;0, where D is the disutility of labor, and l is labor ~ The disutility of labor incrementally increases at the margin. Reach our work the next incurs a greater cost in terms of the disability of labor. This is graft as an upward (left-to-right) sloping curve.</p>
<p>Of course in standard fashion the intersection of these two curves is an optimum. It reveals the number of hours at the worker will work and the marginal utility of consumption equal to the marginal dis utility of labor.</p>
<p>By adjusting the number of hours supplied, workers maximize their welfare. Workers bring their dissutility of labor into conformity with the real wage offered by adjusting the number of hours supplied. So, &quot;The marginal disc utility of labor is equal to&quot; The marginal utility of &quot;the real wage.&quot; It can't be equal to the wage itself—but you got the right idea!</p>
<p>Lastly I should note that while &quot;'the marginal this utility of labor' refers to (mental or physical) adverse effects of each additional time unit of labor expended,&quot; mainstream economics currently simply ignores these effects and instead determines labor supply by the point where the marginal utility of consumption is equal to the marginal utility of free time. You could use the analysis that I presented to the same end by simply substituting the forgone marginal utility of free time for the marginal disutility of labor.</p>

CC BY-SA 4.0
2024-08-16T04:07:58.280Z
2024-08-16T04:35:52.243Z
2024-08-16T04:35:52.243Z
Eric Glock
<p>Sorry for the newby question, started reading Keynes general theory (1936) and am confused by this paragraph in Chapter 2:</p>
<blockquote>
<p>The traditional theory maintains, in short, <em>that the wage bargains between the entrepreneurs and the workers determine the real wage</em>; so that, assuming free competition amongst workers, the latter can, if they wish, bring their real wages into conformity with the marginal disutility of the amount of employment offered by the employers at that wage. If this is not true, then there is no longer any reason to expect a tendency toward equality between the real wage and the marginal disutility of labor.</p>
</blockquote>
<p>My understanding is that &quot;marginal disutility of labor&quot; refers to (mental or physical) adverse effects of each additional time-unit of labor expended. Is this correct? What would it mean then to say marginal disutility of labor is equal to the real wage?</p>

<labor-economics><marginal><keynes>
What is meant by "marginal disutility of labor" in Keynes General Theory
psychomantis01
# What is meant by "marginal disutility of labor" in Keynes General Theory

(Asked by: username_0 on 2023-06-27)

Sorry for the newby question, started reading Keynes general theory (1936) and am confused by this paragraph in Chapter 2:

> The traditional theory maintains, in short, *that the wage bargains between the entrepreneurs and the workers determine the real wage*; so that, assuming free competition amongst workers, the latter can, if they wish, bring their real wages into conformity with the marginal disutility of the amount of employment offered by the employers at that wage. If this is not true, then there is no longer any reason to expect a tendency toward equality between the real wage and the marginal disutility of labor.

My understanding is that "marginal disutility of labor" refers to (mental or physical) adverse effects of each additional time-unit of labor expended. Is this correct? What would it mean then to say marginal disutility of labor is equal to the real wage?

**Tags:** labor-economics, marginal, keynes


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## 2 answers

### Answer by username_1 on 2023-06-27. Score: 3

> My understanding is that "marginal disutility of labor" refers to (mental or physical) adverse effects of each additional time-unit of labor expended. Is this correct?

Yes this is correct.

> What would it mean then to say marginal disutility of labor is equal to the real wage?

It means that in this scenario real wage is exactly as high as needed for the person to provide the labor they provide on margin. If real wage would be lower than marginal disutility of labor a person would provide less labor on margin. If real wage is higher than marginal disutility of labor a person would likely seek to increase their working hours. If they are equal you are in some sort of stable equilibrium where person, on margin, is content with their current labor supply.


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### Answer by username_2 on 2024-08-16. Score: 0

"My understanding is that "marginal disutility of labor" refers to (mental or physical) adverse effects of each additional time-unit of labor expended. Is this correct?"

Yes, and the marginal disutility of labor (eventually) monotonically increases—you might think of it as the "evil twin" of marginal utility which it, in effect, mirrors.

"What would it mean then to say marginal disutility of labor is equal to the real wage?"

You cannot compare the real wage to the disutility of labor directly. This is apparent, at least, from dimensional analysis: No dollar value can equal equal any disutility value. However, Keynes does not suggest directly comparing the wage to the disutility of labor in the quotation given: "'[workers can] bring their real wages into conformity with the marginal disutility of the amount of employment offered by the employers at that wage.'"

Keynes' statement is awkward and seems to suggest that he doesn't fully appreciate the neoclassical labor-consumption equilibrium. However this is more or less right. However, instead of workers "bring[ing] their real wages into conformity with the marginal disutility of the amount of employment offered by the employers at that wage[,] they "bring their" hours of work "into conformity with... the wage." Specifically, in perfect competition, and other things being equal, the marginal disutility of labor will equal the marginal utility of the wage. This is evident from marginal analysis. Imagine the vertical axis of an imagined graph as utils, and the horizontal axis as hour of labor. The wage is fixed, which is consistent with the neoclassical long-run assumed in this discussion. Assuming U"(c)<0, where U is the utility consumption, and c is consumption ~ that the utility of consumption decreases monotonically at the margin, the utility of the wage incrementally decays at the margin, so each additional dollar(s) earned (which is the hourly wage) for each additional hour of work, decays. This is therefore graphed as a downward (left-to-right) sloping curve.

Now, assuming D"(l)>0, where D is the disutility of labor, and l is labor ~ The disutility of labor incrementally increases at the margin. Reach our work the next incurs a greater cost in terms of the disability of labor. This is graft as an upward (left-to-right) sloping curve.

Of course in standard fashion the intersection of these two curves is an optimum. It reveals the number of hours at the worker will work and the marginal utility of consumption equal to the marginal dis utility of labor.

By adjusting the number of hours supplied, workers maximize their welfare. Workers bring their dissutility of labor into conformity with the real wage offered by adjusting the number of hours supplied. So, "The marginal disc utility of labor is equal to" The marginal utility of "the real wage." It can't be equal to the wage itself—but you got the right idea!

Lastly I should note that while "'the marginal this utility of labor' refers to (mental or physical) adverse effects of each additional time unit of labor expended," mainstream economics currently simply ignores these effects and instead determines labor supply by the point where the marginal utility of consumption is equal to the marginal utility of free time. You could use the analysis that I presented to the same end by simply substituting the forgone marginal utility of free time for the marginal disutility of labor.


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