In ordinary language labour means manual or unskilled labour but in economics it has a wider meaning. It includes not only manual and physical labour and also mental labour as well as skilled and unskilled labour. It has therefore a mental or physical exertion which contributes to production of goods and services during a certain period of time. It has a human effort of any kind undertaken with a view of creating or adding utility. It includes the work of doctors, clerks, engineers, managers, accountants, salesmen, teachers, lawyers, servants, etc. i. e. in short, labour includes any activity undertaken to earn an income. If labour is undertaken for pleasures, working in one’s own garden, singing to yourself or for any other reason it is not considered to be labour. In economics, therefore, all unpaid services are not labour.
According to Dr Alfred Marshall, ‘Any exertion of mind or body undergone partly or wholly with a view to earning some good other than pleasure derived directly from work.’
Physical and Mental Labour
Physical labour refers to manual work done by a person. It is usually unskilled and less paid. This is undertaken by blue collered workers. Wages are paid for the shorter duration of time e.g. a day/ week, etc e.g. railway coolie.
Mental labour refers to the work of the brain rather than the body. This is usually skilled, educated, trained and paid more. This is undertaken by the white collared. Salaries are usually paid for a month. eg manager.
Productive and Unproductive labour
For a long time there was a disagreement among the economists as to which labour was productive and which was unproductive. According to physiocarats school of thoughts in France, only agricultural was productive because it was only in agricultural and in extractive industrial that real production took place. It created tangible or material goods and increased the wealth of the community. They regarded manufacturing industries as transformative activities.
In the same century that is the 18th century, the merchantalists considered only that labour as productive which resulted in rise of precious metals like gold and silver. Labour that failed to add to the countries stock of money in the form of gold or silver was unproductive.
According to Adam Smith labour which resulted in producing something tangible was productive labour i.e. he treated all the services as unproductive e.g. services of doctors, lawyers, was unproductive.
According to Marshall, labour which resulted in the production of goods and services were productive.
According to modern economists labour is productive when creates or adds utility that commands an exchange value of price. Therefore, any labour that fails to create or add utility or cannot satisfy human wants is unproductive. Any work done out of hobby, love and charity is unproductive (business of stock exchange traders etc. are also included.)
Some labour may not satisfy a want and yet it may be paid for, this is productive labour from the labourers point of view but unproductive from the society’s point of view. e.g. beggar begging money.
According to modern economists, misdirected labour is unproductive. e.g. labour directed towards anti-social activities like smuggling, black marketing etc. Also wasted labour is labour spent in producing a commodity which fails to fulfill the function for which it was produced. Therefore, it is unproductive. e.g. labour spent in painting a house or building a bridge and left incomplete.