The functioning of this market happens with the demand and the supply of the labor. The demand for the labor means the amount of labor that the firms demand and the supply mean that the number of people who are available for the work. Bargaining power of the employers and workers determine the demand the supply and demand of labor in the market. So it can be understood from this that the demand and supply works on the basic principle of the general law of demand i.e. more people are hired when the rate of wages go down but with the increase in rate of wages, the amount of labor demanded reduces. talks about the labor unions. The labor unions play a major role in determining the supply of labor. There are few set objectives of these labor unions.