2024 Micro App Points

Question 1

What is gig economy

Answer 1

Labour market characterised by short term, freelance or contract work rather than traditional full time employment so gig economy workers typically have multiple clients or projects at once and are not tied down to a single employer

Examples: ride-sharing drivers, food delivery couriers, freelance writers and virtual assistants

Question 2

Describe growth of gig economy in recent years

Answer 2

Numbers of gig economy in 2023 was just under half a million people (463,583), 1.4% of employment in the uk. Up from 38,000 in 2010 according to guardian Percentage of zero hour contract employees in 2023 was 3.6%

Question 3

Consequences of gig economy work

Answer 3

• more flexible workforce that allows firms to achieve cost savings especially where they are very busy at certain short periods and need more workers but not for too long
• challenge for gov as they need to regulate and tax gig economy workers and ensure they have access to benefits and employment protections. Criticism that they offer lower wages and fewer benefits than norm jobs
• given rise to online platforms connecting workers with customers which grow very quickly like delivery Poo just eat and Uber . These bis struggle to make profit as they grow however
• Labour Party said they will ban zero hour contracts if it wins power

Question 4

Changes to minimum wage in nov 2023 and consequences

Answer 4

• NLW set to rise 10% to £11.44 april 2024
  1) improve work incentives for people at bottoms deciles of income distribution. More active labour force and less inactivity
  2) smaller firms operating in hospitality and retail for example will see a rise in variable costs and may struggle to make profit so risk of higher prices and job losses
  3)lift in consumption as rise will benefit 2.7 million people and annual earning of a full time worker rises by over £1800

Question 5

Evaluate rise in NLW in nov 2023

Answer 5

• time and scale of min wage increase
• can most business absorb the rise
• knock on effects on investment and employment possibly? More uncertainty less business confidence due to labour market reforms
• impact on gov finances: more direct and indirect tax revenue, rise in state spending for low paid jobs in local authorities and reduce in in work welfare paid to people on v low wage

Question 6

Strategies to counter monopsony power

Answer 6

• creating a new regulator such as grocer adjudicator
• competition policy might block some mergers and takeovers
• establishing producer cooperatives as a counter balance to monopsony buyers
• tougher laws/ industry standard on ethical sourcing of suppliers
• using tech for suppliers to sell direct to customers

Question 7

What does the grocery code adjudicator do

Answer 7

• all grocers with turnover of more than £1bn are covered
• GCA can levy penalties of up to 1% of turnover
• investigate relationships and disputes between buyers and suppliers

Question 8

Examples of surge pricing

Answer 8

• prices rise during periods of high demand
• Uber and left use it in peak times
• Uber uses sophisticated algorithms and data analysis to determine prices

Question 9

Why are

Question 10

Examples of anti competitive practices in tech industry

Answer 10

• apple fined €500mn for restrictions on access to music streaming services
• apple blocked music streamers from telling users about cheaper ways to subscribe outside of its AppStore where it apple gets lots of revenue
• Spotify filed complaint in 2019 claiming apple limits choice and competition in App Store by charging a 30% fee on all purchases
• this fine will deter giants from creating barriers to entry

Question 11

Interdependence in supermarket oligopoly

Answer 11

• supermarkets competing for staff, and in this case, firms also adopt similar behaviours, with firms effectively shadowing one another for a period of time, with a stable equilibrium wage, until someone breaks rank, offers a higher range and other supermarkets fall into line
• initially it was discounters who offered higher wages, but these have been matched and now, potentially surpassed by Marks & Spencer offering staff £12 per hour outside the capital and £13.15 in London. Expect other supermarkets to follow suit.
  ( m & s joins Aldi Sainsbury’s and Lidl in increasing minimum pay for staff outside of London to £12/hour)
• lidle Uk raises staff lay for 3rd time in 12 months