Gov Intervention Into Labour Market (6)

Question 1

Why was NMW introduced (3)

Answer 1

Decline in trade unions
Rise in part time temporary work
Rise in monopsony power of employers

Question 2

Positives of NMW (2)

Answer 2

No exploitation
Incentive to work

Question 3

Negatives of NMW (3)

Answer 3

Excess supply
Increased employment = less jobs available
Rise in costs = incentive to replace workers with machines

Question 4

Maximum wage rate (2)

Answer 4

Limit executive pay
Example = footballers but it failed because they moved abroad

Question 5

Positives and negatives of max pay (2)

Answer 5

• less skilled workers = less incentive
  + prevents top bosses exploiting profits = reinvest back into business

Question 6

Strategies to improve geographical immobility (2)

Answer 6

Give subsidies to people moving to specific areas of the country to encourage them to move
Reform the housing market to increase the supply of houses and reduce the price of rented properties

Question 7

Strategies to improve occupational immobility (3)

Answer 7

Education schemes
Training and apprenticeship schemes
Subside training courses

Question 8

Positives of public sector pay (2)

Answer 8

Bonuses
Holidays

Question 9

Reduced wages within public sector pay (2+)

Answer 9

6.3% fall in the real pay of those in the police, health service and teachers
Private sector employees have also suffered a fall in real pay = lower = 2.5%

Question 10

Problems with public sector pay (2+)

Answer 10

Constrained by political considerations affecting government fiscal policy
Nature of public sector employment = private sector wages are linked to profits so additional bonuses can be given for performance

Question 11

Regulation what (4+)

Answer 11

Legislation = prevents discrimination
Legislation = regulates T.U.
Max working week = capped at 60h = theory = firms will hire more if workers work less
Legislation = health + safety