All Themes: Labour markets - all you need to know

Unemployment and economic inactivity in the UK labour market are falling, but when we disaggregate the market we find that there remain persistent issues including risks of extreme poverty, labour immobility, skills shortages and the issues facing workers in vulnerable jobs perhaps facing a monopsony employer. This short revision video looks at the problems in accurately measuring the marginal revenue product from employing an extra worker. This short revision video looks at a numerical example of the difference between the average and marginal cost of employing extra workers when a business has to raise the average wage to expand their workforce. Monopsony is a labour market structure in which there is a single powerful buyer of a particular type of labour. For example, the main buyer of the labour of doctors and nurses is the NHS or large employers such as Capita, G4S, Amazon and Sports Direct. Trade Unions may use their collective bargaining power and bid for employers to pay a premium wage (or “wage mark-up”) above the normal competitive market wage. However, this might lead to an excess supply of labour and a contraction of total employment. This short revision video takes students through the basic analysis and some core evaluation arguments. A trade union is an organised group of employees who work together to represent and protect the rights of workers, usually by using collective bargaining techniques. This short revision video looks at the key roles of trade unions and the long term trend in union membership in the UK labour market.