labor market

Just like any other market, but a bit more interesting because it involves volatile human beings.

Just like any other market. What does that mean? That means it basically obeys the rules of supply and demand. If a lot of people are providing ("selling") a particular skill, then people won't buy (employ) at such a high price. Unskilled or semi-skilled labour is an example of this - there are plenty of people who can sit in a factory and pack things into boxes, which is why you're not likely to get much above the minimum wage for it.

On the other hand, highly-skilled positions (lawyer, doctor, programmer) get paid a lot because they're hard to find, or provide very specialised skills.

The demand for this labour ultimately comes from the customer - s/he demands a product, so a company demands labour to make the product or provide the service.

A marxist interpretation says that labour market is not like any other market because the supply and the demand have significant difference here: A worker sells her labour but gets paid only for her "humanity". Marxists argue that

value of labour > value of reproducing human

and this is where surplus value is derived from. Therefore exploitative capitalists don't pay for the full value of workers' labour.

It should be clear that as Noung writes not all people possess the skills needed and therefore validity of marxist theory is diminished. But I would say that it still has some relevance on the spheres of production in which hardly any special skills nor education is needed.