geographical immobility chain of analysis

Geographical immobility is the inability or unwillingness of workers to move from
geographical area to another to find employment, causing labour market failure and
structural unemployment. Labour market failure is when there is a lack of skills in the
workforce or the inability of being able to allocate labour efficiently. This happens due to
people being tied down because of family living in the area or unable to find a place to move
house to. For example, M&S moved from UK to
vietnam in clothing to reduce costs which means that
employees who where manufacturing the products that
could not relocate had lost their job. This means that
people cannot relocate to different cities or countries
leading to structural unemployment which can lead to a
labour market failure. This can be shown on a diagram
as employers will increase their wages from W to W1 to
incentivise people to relocate to the new jobs. This
means that the demand for labour will shift to the left
due to wages being increased which means costs
increase. This means that quantity of labour will
decrease from Q to Q1.