LS12- Labour Market Issues

Question 1

List the 5 labour market issues

Answer 1

• zero-hours contracts (job insecurity & unstable income)
• discrimination (e.g. gender pay gap currently at 13.1%)
• education & training (e.g. not enough people choose a-level maths etc)
• shortages (e.g. farming sector labour shortages, strict visas on low-skilled workers)
• retirement (less generous social security and disability insurance, mortality rates declined)

Question 2

Trade union definition

Answer 2

• an organisation of workers that collectively bargain for higher wages and/or better working conditions

Question 3

Pros of trade unions

Answer 3

• counter balance monopsony power e.g. farmers against supermarket big 4
• higher wages -> wage efficiency theory
• improve working conditions and lead to productivity deals (bringing in new practises to increase labour efficiency)

Question 4

Cons of trade unions

Answer 4

• in a competitive labour market, trade unions can push wages above equilibrium -> unemployment + possible cost-push inflation
• time lost to strikes leads to losses in productivity and ripple effects if key industry e.g. transport

Question 5

Geographical immobility of labour

Answer 5

• the difficulty workers face in moving from one location to another to find employment

Question 6

Occupational immobility of labour

Answer 6

• inability of workers to move from one type of job to another due to a lack of skills/knowledge

Question 7

Ways to increase geographical mobility of labour

Answer 7

• government/firms can provide housing subsidies
• improve access to transportation e.g. price caps on tickets or infrastructure projects like HS2

Question 8

Ways to increase occupational mobility of labour

Answer 8

• subsidise education or increase apprenticeship opportunities
• employers can reduce barriers to entry for a role e.g. x years of experience required or uni degree
• employers can offer more on the job training

Question 9

Factors decreasing geographical mobility of labour

Answer 9

• family ties or close relationships within home town
• transport costs
• language barriers
• brexit restricting free movement of labour within EU