labour markets (micro)

Question 1

What is a gig economy?

Answer 1

A labour market in which temporary, flexible jobs are the norm.

Question 2

What do workers in a gig economy typically work as?

Answer 2

Independent contractors, freelancers, or temporary employees

Question 3

What are two examples of companies that operate within a gig economy?

Answer 3

Uber and Lyft

Question 4

What is a key benefit of a gig economy?

Answer 4

flexibility for workers.

Question 5

What is a downside of a gig economy?

Answer 5

workers do not have the same protections and benefits as traditional employees, such as health insurance, paid time off, or job security

Question 6

Uber and Lyft have created disruption to traditional labour markets.

What has this raised questions about?

Answer 6

Labour rights and protection for workers in this new economic model.

Question 7

What risks has the hand car wash sector consistently been identified with?

Answer 7

Exploitation and modern slavery.

Question 8

What has the hand car wash sector got a reputation for?

Answer 8

• employing undocumented workers
• Paying low wages well below legal minimum wage.

Question 9

What percentage of car washes had written contracts with workers?

Answer 9

6% - report from Nottingham university

Question 10

Why is there environmental concerns with the car wash market?

Answer 10

10 % of UK’s daily supply of water

much of it taken illegally through sources such as public standpipes.

Question 11

What negative externalities that could cause environmental concerns does the hand car wash sector produce?

Answer 11

• Car wash waste water (contains phosphates)
• detergents
• surfactants
• oils
• sediments
• metals

Question 12

Give an example of a monopsony employer?

Answer 12

The NHS - the main buyer of doctors and nurses in the UK

Question 13

Does the NHS exploit workers with monopsony power?

Answer 13

• No profit motives as it is a government run sector
• Could cut wages, however, to fund other government sectors.

Question 14

What is gross pay?

Answer 14

Any wages that come directly to an employee

e.g. commission or basic wage

Question 15

What is net pay?

Answer 15

what’s left of income after income tax and national insurance have been taken off.

Question 16

What are possible advantages from specialisation within an economy?

Answer 16

• Higher output per worker
• Improve the quality of goods
• Improve an economy’s ability to export more goods
• Greater variety of choice for consumers.

Question 17

What are moral considerations for businesses?

Answer 17

• equality of pay for staff
• The environmental impact of production

Question 18

Give ‘demand factors’ impacting the demand for labour?

Answer 18

• Profitability of firms
• The performance of the economy

Question 19

What are the main roles of trade unions in the labour market?

Answer 19

• Pay bargaining (real wages)
• Protecting pension rights
• employment rights
• working conditions including health and safety at work
• lobbying for improved minimum wages and workplace training funding
• campaigns on discrimination

Question 20

reasons for long-run decline in UK trade union membership

Answer 20

Structural change in employment

Globalisation and flexible hiring

Question 21

factors that affect trade union bargaining power in the labour market

Answer 21

• Union density and membership - negotiating leverage
• economic climate - scarcity of skilled workers

Question 22

how are wages determined when a monopsony employer negotiates with a trade union?

Answer 22

• Monopsony have buying power when hiring labour.
• They can use this power to pay a wage lower than the MRPL
• Trade union might help to counter-balance monopsony exploitation

Question 23

What are factors that might explain the gender pay gap in the UK labour market

Answer 23

• Age and the glass ceiling effect - links to women taking a career leave effect.
• Occupational clustering effects - many jobs such as social care, accommodation and food services - relatively low pay but high female concentration.

Question 24

What percentage of children are living in relative poverty in the UK?

Answer 24

27%

Question 25

What are policies that might be used to help reduce ‘working poverty’ in the UK

Answer 25

• higher minimum wage
• child support
• legal protection of workers’ rights

Question 26

What is Aldi an example of?

Answer 26

wage-productivity theory - that higher wages means less turnover of workers and more motivated productive workers

Question 27

What company has been accused of wage theft?

Answer 27

Boohoo - it will pay an estimated £125m in underpaid wages