3.5 Global Labour Markets

Question 1

Define the global labour market

Answer 1

Everyone who is seeking work across the world. Made up of those supply labour and those demanding it

Question 2

What is the global labour force

Answer 2

Those who are working

2015 - 3 billion were in work

Question 3

What is structural change?

Answer 3

When resources are being reallocated. Demand for a specific product is falling, the demand for labour will diminish. Changes in consumer preference alter demand for employment

Question 4

What are the problems with the labour force in developed countries such as the UK or Japan and what may help rectify this

Answer 4

The ageing population means less people are in work and cannot pay enough taxes back into the government in order to pay for pensions/ leisure activities. Improved productivity will help sort this

Question 5

How are labour markets becoming more interdependent

Answer 5

As globalisation interconnects economies so do labour markets. What happens in one economy is likely to have a ripple effect in another economy. Trade liberalisation and trade blocs make it easier to move between markets.

Question 6

What factors influence the supply of labour?

Answer 6

• Birth and mortality rates
• Education / skills
• Ease of migration

Question 7

What factors influence the demand for labour?

Answer 7

• Aggregate demand (income and spending power)
• Consumer demand shifts
• Economic cycles (recession)
• Technology (more efficient)

Question 8

What is derived demand?

Answer 8

It depends upon the demand for individual products. Employers take on more people if their products are selling well.

Question 9

What is a flexible labour market and why is this important given structural changes?

Answer 9

Where those within are geographically and occupationally mobile. They can adapt to most jobs.

Question 10

Why is important to be a skilled worker

Answer 10

You are rare
You are more likely to get a job if you have skills that not many others have. Multi-skilling means being trained in more than one area which is desirable. Usually earn more too.

Question 11

What methods of competition are there within the global labour market?

Answer 11

Competitive in producing the cheapest products, therefore skilled workers are desired.

Question 12

What economic cycle reduces the demand for labour?

Answer 12

Recession, people are more likely to take a pay cut during a recession than to quit their job.

Question 13

What is a trade union?

Answer 13

To act on behalf of the members to safeguard their interests and negotiate pay/working conditions

Question 14

When was the minimum wage act introduced?

Answer 14

1999

Question 15

What is the current minimum wage for over 21?

Answer 15

£7.20 p/h

Question 16

Why do we need minimum wages?

Answer 16

Providing the absolute minimum needed to survive.

Question 17

Why are minimum wages so low?

Answer 17

If wages rise, employers wont recruit as many people as it’ll be more expensive. Capital production prevails which leads to mass unemployment.

Question 18

Will higher wages lead to reduced competitiveness?

Answer 18

No, it is likely that the increased wages will act as an incentive to employers to train their workers to be more productive and so, exports are likely to stay level, if not increase.

Question 19

How can a shortage of skill impact the UK’s competitiveness

Answer 19

Low skilled workers can restrict growth as innovation is low and exports aren’t excelling in efficiency/ quality.

Question 20

What is the difference between migration within an economy and migration between economies?

Answer 20

Within an economy is about moving to where all the jobs are at, however between economies is when people migrate to another country, looking for work.

Question 21

What are the 3 ways inequality can be caused

Answer 21

• very low wage rates for both the skilled/unskilled
• very high incomes that are not taxed
• accumulated wealth

Question 22

What are working tax credits

Answer 22

Introduced in 1999, are basically just benefits for those who are available to work but can’t.