Nature of W/L and trends in employment and earnings

Question 1

Earnings

Answer 1

wages, overtime pay, bonuses, commission

Question 2

Structure of employment

Answer 2

Decline in manufacturing, rise in finance and business service sector jobs

Question 3

Economically inactive

Answer 3

Working age people who are voluntarily out of work - not employed or unemployed

Question 4

Labour force participation rate

Answer 4

Proportion of working age people who are economically active

Question 5

Employment rate

Answer 5

Proportion of working age people who are in work

Question 6

Part-time workers

Answer 6

People working under 30 hours a week

Question 7

Recent trends in employment

Answer 7

• UK employment has grown
• Public sector more than private
• Higher proportion of female workers in public
• More public workers members of TUs
• increase in part time
• increase in self employed e.g. hairdressers

Question 8

Temporary work

Answer 8

Casual, seasonal, working for agencies, fixed period contracting

Question 9

Homeworking

Answer 9

Working at home or in different places away from central office

Question 10

Age

Answer 10

• UK workers getting older

- EU workers getting older

Question 11

Older workers

Answer 11

• Tend to change jobs less frequently
• less geog. mobile
• less likely to lose jobs but if they do, less likely to return to work

Question 12

Positives of older workers

Answer 12

Stay in same job for longer - reduce firms turnover costs
High levels of experience
However, wage tends to rise with age

Question 13

Gender trends

Answer 13

Women increasing proportion of LF

Major rise in the 25-44 age range

Question 14

Reasons for increased female workers

Answer 14

Increased job opportunities (e.g. rising service sector)
Less discrimination
Increased pay
Changing social attitudes
Increased expectations of higher living standards

Question 15

Occupational segregation

Answer 15

Dominance of an occupation by one gender

Question 16

Ethnic minorities trends

Answer 16

On average less well paid than general population
Lower employment rates than white people
Due to discrimination - if employers believe productivity of black workers is lower than it actually is, wage rate paid to those workers will be below allocatively efficient level

Question 17

Occupation trends

Answer 17

Largest increase in UK jobs - banking, finance, insurance
Increases in healthcare, admin, education
Decreases in primary and secondary sector - agriculture, manufacturing, fishing, construction

Question 18

Regional trends

Answer 18

Total employment rising in most regions
London = largest rise
Yorkshire, East England = falling employment
London has highest earnings on average - high quality of work there e.g. bankers

Question 19

Sector trends

Answer 19

Decline in secondary sector
Increase in tertiary sector
Shift from primary/secondary to tertiary = common trend as economy develops and grows

Question 20

Primary sector

Answer 20

First stage of production e.g. fishing, agriculture

Question 21

Secondary sector

Answer 21

Processing of raw materials into semi-finished and finished goods e.g. manufacturing, construction

Question 22

Tertiary sector

Answer 22

Third stage - e.g. healthcare, tourist industry, education, financial services

Question 23

Unit labour costs

Answer 23

Labour costs per unit of output

Question 24

Influences on ULCs

Answer 24

Wages
Productivity
Other worker payments e.g. national insurance
Wages and prod. = chief influences

Question 25

Tax Wedge

Answer 25

Gap between what employees earn, and what employers pay for labour

Question 26

UK ULC

Answer 26

Quite poor compared to USA

Low levels of capital per worker, educational shortcomings, insufficient innovation, inefficient transport

Question 27

Outsourcing

Answer 27

Subcontracting part of the production process to another firm

Question 28

Offshoring

Answer 28

Subcontracting part of the production process to a firm in another country

Question 29

Influence of ULCs

Answer 29

Higher = less price competitive
Country may have high ULCs but lower unit costs if production is capital intensive and efficient
Doesn’t say anything about quality competitiveness

Question 30

Examples of offshoring

Answer 30

India - call centers

China - cheap labour intensive production

Question 31

Forms of leisure

Answer 31

Home based activities e.g. computer
Out-of-home - cinema, pub
Broad categories - educational, cultural, sporting

Question 32

Leisure activities are supplied by:

Answer 32

Private sector - cinema, pubs, gym
Public sector - libraries, parks (motivation = merit good nature of many leisure activities, question of equity)
Voluntary sector - tennis clubs, craft societies

Question 33

Factors influencing demand for a particular leisure activity

Answer 33

Price of the activity
Price of complementary goods/services - e.g. taxi
Price of substitutes - includes work
Tastes - e.g. cinema has declined
Age composition - ageing population has led to a rise demand for things e.g. over 50s holidays
Gender composition - women read more
Advertising
Major events e.g. concert can help sell a group’s music
Exchange rate - holidays etc. (demand for currency)

Question 34

Changes in the leisure market

Answer 34

Rise in proportion of home activities - TV
Rise in gambling
Rise in expenditure on leisure activities - rising income and more leisure time
Rise in USA’s influence e.g. private health clubs

Question 35

Holidays and leisure travel

Answer 35

= Tourism

Most countries - tourism grown significantly

Question 36

Reasons for growth of tourism

Answer 36

Increase in disposable income
Reduction in working hours
fall in the real cost of travel
early retirement
increased life expectancy
reduction in time spent on domestic tasks
improved transport
increased advertising
increased awareness of the benefits of tourism

Question 37

Income and employment effects of tourism

Answer 37

Increased in no. of countries
Tourists create income and employment e.g. restaurants, hotels
Also wide range of other industries eg. insurance firms, taxi firms
However - jobs may be low skilled and low paid
effects on income and employment wont be great if goods and services used are brought in from other places

Question 38

Tourism income multiplier

Answer 38

extent to which a change in income from tourism causes GDP to change

Question 39

Effects of tourism on the BoP

Answer 39

Influenced by where the firms in the tourist industry obtain materials and foods, also national origin of the firms
When foreigners visit the UK, their expenditure = export
vice versa
UK has a personal travel deficit

Question 40

Effects of tourism on culture

Answer 40

Tourists may upset locals

Demonstration effect - locals copy culture of tourists e.g. clothes, tastes, attitudes

Question 41

Effects of tourism on environment

Answer 41

Visual pollution e.g. hotels
Noise/air pollution
Waste generated by tourists
Congestion from tourists e.g. taxis
Destruction of natural env. for hotels etc.
Heavy use of water supplies

Question 42

Monopoly

Answer 42

A market structure where there is a single seller

Question 43

Cinema industry trends

Answer 43

Most revenue = box office takings
Recent years = growth of the multiplex e.g. milton keynes
Rise of multiplex (offers more screens, parking etc.) = cause of doubling in admissions in past years
Small places often undergo non-price competition e.g. specializing in rare films, foreign films
Attendance varies with age - mostly younger people

Question 44

Concentration ratio

Answer 44

Percentage share of the market of a given number of firms e.g. CR5

Question 45

Concentration ratios in leisure industries

Answer 45

The higher the CR, the less competitive pressure there is

Cinema industry has high CR