Definitions 5. The Labour Market: Paper 1: OCR A-level Economics Revision and Macroeconomics

Productivity

Output per worker per unit of time.

Unit Labour Costs

The cost of labour per unit of output.

Economic Rent

Income earned which is more than transfer earnings.

Transfer Earnings

The minimum reward that is needed to keep labour in the current occupation.

Transfer Payments

Welfare payments from the government to provide a minimum standard of living for those on low incomes.

Bilateral Monopoly

Where there is only one buyer and one seller in the market.

Collective Bargaining

Negotiation between employers and a collective group of employees.

Geographical Mobility of Labour

The ease and speed at which labour can move from one area to another.

Individual Bargaining

Negotiation between a single employee and the employer.

Labour Force

All those who are economically active; those people who are in work or are actively seeking work.

Labour Market Flexibility

The willingness and ability of labour to respond to changes in market conditions.

Living Wage

The wage the government believes is necessary to cover the basic cost of living; paid to everyone over 25.

Maximum Wage

A ceiling wage which people cannot earn above.

Minimum Wage

A floor wage which people cannot earn below.

Monopsony

A single buyer in the market.

Occupational Mobility of Labour

The ease and speed at which labour can move from one type of job to another.

Productivity Bargaining

An agreement where employees agree to make changes which improve productivity in order to receive higher wages.

Trade Unions

An organisation that protects the rights and pay of workers through a process of collective bargaining.

Wage Differentials

When different workers are paid different amounts.

Working Population

Those who are economically active, the labour force.