Document page
Economics IGCSEPDF 64
118 pagesrevision 46932
PDF 64
Page image rendered from the stored file at 110 dpi; it sharpens as you zoom. Outlines are placed from each region’s stored position on the page (612 × 792 pt).
readable
Source of this text: embedded text layer. The better of the embedded text and OCR is kept.
●
●
●
●
●
Economic
Activity/Unemployment:
The union
is stronger when
unemployment is
(the firm finds it hard to replace
striking workers) and demand for the
firm’s product is high.
low
● Membership Density: A high
percentage of workers in the
industry or firm are union members.
This makes a strike more effective.
● Skill Level of Members: Unions
representing highly skilled or
specialist workers are stronger, as
these workers are difficult and costly
to replace.
Proportion of Labour Cost: If the
cost of labour is a small proportion
of the firm's total costs, the firm is
more likely to grant a wage rise than
risk a strike.
Essential Industry: Unions in
industries that provide essential
services (e.g., energy, transport)
have great power because a strike
causes maximum disruption to the
economy.
Impact of Trade Union Activity
Impact on Workers (Pros and Cons)
● Pros:
Higher wages and improved
non-wage benefits. Greater job
security and protection against
exploitation. Improved skills through
union-backed training.
Cons: Membership fees must be
paid. Workers may lose pay if forced
to go on strike. Higher labour costs
could cause the firm to reduce
employment or even close down.
Impact on Firms (Pros and Cons)
● Pros:
Collective bargaining can
by negotiating with one
body rather than many individuals. A
good relationship with the union can
lead to improved cooperation and
productivity.
save time
Cons: Higher wage costs reduce
profit margins. Loss of output and
revenue during industrial action.
Decisions may be delayed due to
lengthy negotiation processes.
Impact on the Economy (Pros and Cons)
Pros:
equity
Can help to achieve
and income equality. May
greater
boost
through higher
wages, which stimulates economic
growth. May improve national
consumption
labour productivity through better
training.
Cons: Higher wages can cause
cost-push inflation if the cost
increase is passed on to consumers.
Industrial action can lead to a
significant loss of national output
(GDP). Higher production costs can
make a country's exports less
competitive internationally.
Unsolved Past Paper Questions
Question 1 (4 Marks)
●
●