employment patterns and wage rates Flashcards
Why is there a minimum wage?
- To reduce poverty
- Corrects uneven market power where unskilled workers hold little negotiation power
What are the positives of a minimum wage?
- Lifts people out of poverty
- Might boost consumption + growth
- Reduces power of monopsony employers
What are the negatives of a minimum wage?
- Possible increase in unemployment
- Affects competitiveness of exports
What affects the success of minimum wage?
- Skills shortages
- Competitiveness
- Migration
- Inequality + incentives
What are wages determined by?
Demand and supply.
What will affect supply of labour?
- Skills
- Demand
- Knowledge
- Qualifications
- Motivation to do the job
What is demand of labour called and why?
Derived demand as employers desire labour for what it can produce, rather than for the labour itself.
How can workers add value to themselves?
Through being good at their jobs, as it affects demand and therefore price paid.
What may some employers choose to do when wages rise?
Employ less workers as increased wages leads to less profit and some cannot afford it.
What did the Global Recession 2008 do to aggregate demand?
Decreased it, and so demand for labour declined.
What did trade unions used to do?
Protect their members in their work and negotiate with their employers for higher wages.
What negative does increased wages have?
It can mean there are fewer jobs available as it costs a business more to employ someone.
How does the government intervene in national labour markets?
Through minimum wage. legislation and retraining schemes.
