The concept of a "dual labor market" refers to the widespread belief that the economy of the United States (and, by extension, the labor market) can be roughly segmented into two distinct parts: the Primary Sector and the Secondary Sector.
Inequality, poverty, and reliance on government aid have been at the center of the discussion whenever the topic of the Dual Labor Market comes up.
Generally, workers in the primary sector have access to benefits such as competitive earnings, respectable positions within their organizations, respectable corporate status, job security, a safe and clean workplace, and prospects for promotion.
On the other hand, the secondary sector is teeming with people stuck in low-status occupations that pay poorly, require them to labor in awful conditions, and offer no prospects for promotion.
How is the Dual Labor Market?
The primary and secondary categories of employers are the two most important divisions in the labor market. For example, those working at the upper echelons of the Primary Sector have it reasonably well in terms of income, perks, and stability in their positions.
On the other side, workers in the secondary sector bring in a lower income, have a higher employee turnover rate, and have a lower level of job security.
How are the Primary and Secondary Market Different?
Comparing the primary and secondary levels of the dual labor market reveals key distinctions. Unionization significantly affects job stability and benefits in the most important sectors' marketplaces. Moreover, in economies like the United States, primary market jobs are typically filled by native residents born and raised in the country.
When compared to the Primary labor market, the Secondary Market is typically linked with less desirable characteristics, such as low pay, poor working conditions, few or no opportunities for advancement, and shaky job security; again, the second market is a common destination for immigrants, members of minority groups, and those from less privileged origins.
Another thing to note here is the secondary market experiences higher turnover rates than the Primary market. It is due to the fact that a major portion of the secondary market does not have the necessary qualities that primary market workers have, this includes credibility and trustworthiness.
How is the Labor Market Segmented?
The labor market segmentation is an important factor in determining the development of the dual labor market structure and the overall evolution of the labor markets.
In the world of economics, labor market segmentation holds a broader meaning. And so, in economics, the two sectors, Primary and Secondary, are further divided into subparts.
Take, for example, professionals who are temps (i.e., temporary workers) in the primary sector may be paid well in comparison to those who work in the secondary sector, but they have to operate under the same amount of job insecurity and potential for promotion as those who work in the secondary sector.
Market segmentation occurs for a wide array of reasons. These reasons include the presence and absence of certain rights, immigrant workers, and also individual employee contracts.