Labour Market - Labour Market Issues

Question 1

Give different labour market issues ways each could lead to labour market failure
(THERE ARE 5 BTW)
GIVE DEFINITIONS WHERE NECESSARY
I would advise to get a paper

Answer 1

1.Wage discrimiantion:
-when firms with monopony power pay different wage rates based on workers’ willingness to supply labour
-vulnerable workers can be exploited
-increased adminisration costs

2.Labour market discrimination:
-a specific group of workers treated differently than other workers for the same job
-illegal under 2010 Equality Act
-Lack of diversity
-resource misallocation
-information failures and prejudice

3.Imperfect information:
-workers may end up with jobs where their skills are under-utilised
-firms end up with workers that aren’t as productive as they may’ve wanted
-Could lead to Discouraged workers
-Frictional unemployment IN THAT SECTOR

4.Skills shortage:
-increased wage costs for firms for higher skille dworkers
-increased costs of production

5. Labour immobility
   -could lead to labour shortages/surpluses in different areas
6. Zero-hour conotracts:
   -employment agreement where employer doesn’t guarantee a minimum amount of working hours to an employee
   -leads to uncertainty in terms of wages
   -little notice before work
7. The “gig economy:
   -more people becoming self-employed and undertake short term contracts (e.g. Uber drivers)
   -concerns surrounding workers’ rights
   -lack of certainty regarding weekly wages