labour market Flashcards
Define wage differential
The difference in pay for two workers for having the same job
When did the UK begin moving from the manufacturing sector to financial services
1970s
Explain a chain of analysis on why a rise in demand for service labour causes a wage differential in the north vs south
North - primarily focused on manufacturing jobs that have fallen in demand
- this would lower incomes, lower consumption, lower profits of businesses who would shred workers or shut down. leading to further fall in income as labour is a derived demand
Why may workers from the north not be able to move to the south
Due to occupational and geographical immobility
list 4 arguments for ceo price cap
- equity and fairness
- hard to discern pay related to performance
- bonus culture means CEO’s make ST decisions instead of LT decisions for higher annual revenue
- increase levels of poverty and inequality
list 5 arguments against CEO pay cap
- prevents attraction of talented CEOs to the UK
- capital flight to countries with low tax and no cap
- firms may rewards CEO by other methods like complex share options
- may be better policies like progressive tax
-uniform vs non-uniform cap affects different industries
list 7 benefits of NMW
- fall in poverty and inequality (less exploitation) - reduces wage differentials
- increase incentive to work (fall in inactivity rates)
- fiscal surplus for government
- increase MRPL
- incentive for firms to boost human capital
- counters monopsonist employers
list 6 cons to NMW
- real wage unemployment (excess supply)
- youth lose out most (unable to justify pay increase therefore LT lead to hysterisis
- Those not affected would want pay increase, they want wage differential
- cost to business (may shut down)
- regional differences (london needs higher pay)
- monopsonist employers like government over public sector increase in spending
EV the impact of TU
- depends on market structure if there is presence of monopsony
- depends on trade union density
- depends on TU mark up
- real evidence to show TU power is limited (e.g closed shop TU are banned, legislation, more part time workers,)