Aggregate Demand and Supply

Wages are going up at Tesco, but look it's been cleverly managed so as not to adversely affect costs. Bonuses are being cut at the same time - and all the while the CEO takes home annual pay of £3m and a bonus of £1.6m.

It makes the generosity of the extra £1,200 for workers doing a 30 hour week seem small in comparison.

The TUC's latest research of zero hours contracts indicates that such workers are more likely to work night shifts - and that this represents tentative proof of their exploitative nature. 

However, I suspect that the argument is a little bit nuanced than this - my gut instinct, though, is that they're an issue. And I'm reminded of the fact that the previous Prime Minister, David Cameron, was so dismissive of them in the 2015 televised election debates.

An interesting reflection on the impact of the minimum wage on employment levels in the UK. The latest research by the Low Pay Commission has suggested that rises in the National Living Wage have eroded profits, rather than hitting jobs.

This is because much of the cost of the increase has been passed onto consumers, with the remainder being borne by firms rather than seeing workers laid off. However, another study, by the IFS suggests that the level at which a higher NLW will encourage increased automation is not too far away.

The flip side of Black Friday - this Guardian article looks at the working conditions of employees in the retail sector highlighting the long hours and poor pay associated with this time of year.

Larry Elliott's first part of his business briefs is insightful: are Amazon altruists. Or are they? He suggests that the higher wage reflects the prevailing D&S conditions in the labour market that have driven wages higher. 

Substitution or complementarity - that's what this article's about in relation to automation. Again. 

Not really news but...it fleshes out some of the reasons why automation is feared, and the need for increased labour mobility.

This sort of article is exactly what I want my students to my reading. It asks all sorts of interesting questions about productivity, employee motivation and how to modernize the world of work. However, equally, it might be asked, is this model universally applicable - and here the really interesting thinking begins. 

Could schools and hospitals do this? What about other sectors of industry? I suspect that it is feasible, but we're still some way from Keynes' prediction that we'd have five days of leisure time and two days of work per week by this time.

The changing nature of the UK labour market is flagged up by this Guardian article that highlights the fact that manufacturing employment has declined by 600,000. Of course, at the same time, the total number of jobs has increased, so it might be argued that this is of little consequence.

However, again, it's an interesting example of the importance of sources - this study was undertaken on behalf of a trade union, the GMB, who have a vested interest in the sector because it's among the most heavily unionised. 

It used to be the case that we automatically assumed that the biggest cause of poverty was worklessness. However, we need to change our perceptions, largely as a result of the ways in which labour markets have changed.

This Guardian article highlights the fact that more than one million workers in the public sector - among them care workers and cleaners - are trapped in in-work poverty, according to the Living Wage Foundation.

They define the living wage as £9 per hour, or £10.55 in London - a figure that is "higher than the government’s legally enforceable “national living wage” of £7.83 an hour across the country, which is to rise to £8.21 from April." It is argued that people who earn below that are working and yet still 'poor'.

The good news keeps coming, with the latest TUC report estimating that the average worker in nearly £12,000 worse-off in real terms, relative to 2008.

Hardly likely to boost growth, this sort of news is it?

Politics Live look into the supposed benefits of flexible working in the gig economy. This article looks at the lack of rights for delivery drivers - and wonders whether some of the recent gains made in other sectors of the gig economy might be extended.

It compares the situation of two Deliveroo 'contractors' - one of whom works full-time for Deliveroo, and one who works part-time for them. 

Although Greg Jericho writes for the Australian arm of the Guardian media empire, this article is equally applicable to the UK. I think that all CEOs should be made to account for their earnings in a more transparent way. It would be great to see the CEO of leading companies trying to argue that they work significantly longer hours/harder than all of their staff and I'd like to see them do it.

Remarkable though it might seem, this story cast the TUC as looking to encourage more innovative work practices - with a major plank of this year's TUC conference being devoted to shortening the working week, and taking advantage of technology to do so.

This contrasts with a view of trades unions that sees that as always looking to impede technological progress so as to protect the interests of their members.

Is the jobs market really this tight? Or what else might explain this data?

Well, might the number of applicants have fallen, in part because of a decline in the number of EU migrants, but also because of a residual number of low income individuals who don't have access to the internet? 

And actually what sort of jobs are being advertised? If it's zero hours contract type work, might it not be rational for some prospective workers to see the opportunity cost of taking these jobs as too high? 

I suspect you heard it here first - however, that doesn't mean that it isn't newsworthy. Brexit has had an adverse effect upon the supply of European fruit pickers willing to come to the UK.

Of course, this has both Macro and Microeconomic effects - and I hope that you've already thought about what the likely implication of this is for the labour market for fruit pickers, and, by definition, the price of strawberries, for example. But what if the domestic labour supply is highly inelastic, because people don't wat to work as fruit pickers?

And what of the wider macroeconomic costs if this also applies to other sectors dependent upon migrant labour?