The market labor demand curve is the graphical representation of the relationship between the wage rate and the quantity of labor demanded in a market. The curve shows the amount of labor that firms are willing and able to hire at different wage rates.
The following events may shift the market labor demand curve leftward:
A technical change that increases the marginal value product of labor: If a technical change makes it possible for workers to produce more output per unit of time, then firms will be willing to hire more workers at any given wage rate. This will shift the labor demand curve to the right.
Bad weather that causes a decrease in supply and a rise in price for one of the inputs used to make the good: If the price of an input increases, firms may be willing to hire fewer workers to produce a given level of output, as the higher cost of production will reduce their profits. This will shift the labor demand curve to the left.
An increase in the wage rate: If the wage rate increases, firms may be less willing to hire workers, as the higher wages will increase their labor costs. This will shift the labor demand curve to the left.
A decrease in the output price: If the price of the goods or services that firms produce decreases, they may be less willing to hire workers, as the lower price will reduce their profits. This will shift the labor demand curve to the left.