25 The interaction of labour markets Flashcards

1
Q

Wage differentials

A
  • difference in revenue creation of different workers
  • difference in level of skills and qualifications
  • difference in labour productivity
  • difference in conditions of work
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2
Q

Impact of trade union on labour markets

A

Can lead to market failure and the strength of trade union can lead to market failure
-likelihoods of a strong trade union leading to market failure depends upon relative strength of the firm

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3
Q

Trade union

A

Collection of workers usually in the same or similar industry that collectively bargains for the workforce on issues like fairness of pay, working conditions and benefits

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4
Q

Monopsony

A

A single or dominant buyer of a product

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5
Q

Impact of a monopsonist employer on labour market

A
  • a monopsonist employer can choose either the wage paid or the quantity of labour employed
  • if profit maximising it will operate so MC=MR
  • will operate at wage level and quantity of labour lower than the market
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6
Q

Bilateral monopoly

A

Labour market that includes a trade union and a monopsony employer
- pressure of trade union to increase wages is balanced by the pressure of the monopsonist employer to decrease wages

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7
Q

Labour market flexibility

A

Ability of workers to move between occupations and industries in order to respond to changes on wages and conditions of work

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8
Q

Mobility of Labour

A

Ability or workers to move geographically in order to respond to changes in wages or conditions of work

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9
Q

Government methods for increasing labour market flexibility and mobility

A
  • education
  • vocational education
  • job training schemes
  • infrastructure
  • trade union reform
  • technology
  • legislation - (zero-hour contracts and redundancy laws)
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