Lesson 12 - The Labour Market In The Real World

Question 1

What is the impact of monopsonies in the labour market?

Answer 1

• they can force down wages
• lack of choice for workers, so they have to accept the lower wages

Question 2

Example of a labour market monopsony:

Answer 2

NHS

Question 3

Example of a labour market monopsony:

Answer 3

NHS

Question 4

What is the impact of trade unions on the labour market?

Answer 4

• effectively become a monopoly supplier
• collective bargaining to get better wages/working conditions
• counter the imbalance between workers and employers

Question 5

What is the argument against union power?

Answer 5

• closed shops will shift supply left and increase unemployment
• disequilibrium in the competitive labour market

Question 6

What is the argument for union power?

Answer 6

• protect workers from monopsonies
• workers cooperate to improve productivity
• employment can rise with wages (as demand for goods increases which increases demand for labour)

Question 7

How do governments ensure that workers get paid a ‘living wage’? (What is the UK ‘s one)

Answer 7

• Minimum wage above equilibrium wage
• UK = £12.21

Question 8

How can a minimum wage reduce unemployment?

Answer 8

If the minimum wage is higher than benefits, then people will be encouraged to work

Question 9

A minimum wage will only be effective if:

Answer 9

The existing wage rate is below the wage floor (equilibrium)

Question 10

What is discrimination?

Answer 10

When a group of workers are treated differently than others workers in the same job

Question 11

How large is the gender gap?

Answer 11

Between 15 and 20%

Question 12

Reasons for a gender gap?

Answer 12

• occupational immobility = a lot of women prefer to live closer to home, so they have limited job choices
• experience = many women take breaks in working to have children, so they lose out on experience
• part time = a lot of women tend to work in part time jobs, which are usually in jobs that are less well paid

Question 13

What are the impacts of discrimination on the labour market?

Answer 13

• discriminating firms will have lower supply of labour
• prices will rise for consumers
• government will have to pay more benefits for those who are being discriminated against