Posted: November 15th, 2022

IDBEC001 Business Economics

IDBEC001 Business Economics

IDBEC001 Business Economics
2022-2023
Coursework Assignment
IDBEC001 Business Economics
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This assignment is in the form of a project and is worth 25%
of the total marks.
Notes:
The final report should be between 1250 and 1500 words (not including the
bibliography).
i. At all times you should express your ideas and develop your answers in your
own words; you may use quotes or refer generally to textbooks, relevant
websites or journals, this is acceptable as long as they are properly
referenced and acknowledged in the bibliography.
ii. Avoid bullet points and sub-headings at all times. Tables and graphs can be
used for summarising information and your written work on each task
should be a continuous piece of writing.
Useful Resources
This assignment will require research work. The following websites and texts may
be of use:
www.economist.com
www.ft.com
www.guardian.co.uk
www.independent.co.uk
www.bbc.co.uk
Sloman J, Garratt D, Guest J and Jones J (2019) Economics for Business (8th
edition) Pearson: Harlow.
Consult your institution’s library for books and relevant journals that may contain
more academic material.
IDBEC001 Business Economics
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Assessment Title
After years of declining trade union power in both the USA and Europe, changing
labour market conditions are seeing a revival of trade unions with an increased
focus on the implications of this for wage determination and labour market
conditions.
Assessment Task
In the last decades of the 20th century trade union membership fell to less than 20
per cent in 48 out of 92 countries surveyed by the International Labour Office. In
only 14 of the 92 countries surveyed did trade union membership exceed 50 per
cent of the total workforce. In the UK and the USA, the last decade of the 20th
century saw trade union membership fall by 25 per cent and 21 per cent
respectively. Your initial task is to do some desk based research to see if this decline
in union membership was reflected in the wages share of company revenues during
this period. However, your research should also recognise the tightening of labour
market conditions in recent years that have seen a revival of trade union
membership and activity which could impact wage negotiation /determination.
The 3 extracts below will give you some useful information about the revival of
trade union membership and activity and these can act as a guide to frame your
thoughts about how the economic theory and models that determine wages might
be changing. You should consider wage determination in markets where all the
power to determine wages lies with employers (monopsony) to one where trade
unions bring power to both sides of the labour market (bilateral monopoly) when
analysing labour market changes. These extracts are adapted from The Guardian
newspaper and The Economist magazine and you can use these as references in
your assignment, but you should look for other sources of information as well to
support your research.
You are required to submit a report that outlines how changes in the labour market
have impacted on the balance between wages and profits in either the UK, the US
or both in the last twenty to thirty years and which then shows how relevant
economic analysis can be used to highlight the possible impacts on wage
determination and working conditions of the recent rise in Trade Union activity. You
should also consider an overall Assessment of how this might restore a more equal
share between the workers and shareholders of an organisation’s revenues and the
extent to which this will improve working conditions. It is vital that you use relevant
economic theory and analysis in your report.
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You are advised to structure your report in such a way as to be able to cover the
following:
• Describe briefly how the balance between wages and profits have changed
over the past 2 to 3 decades in either the UK, the US or both.
• Identify and explain how theory would suggest businesses operating in
labour market conditions, where they have all the power, would set wages
at a level that favours profit maximisation.
• Apply relevant economic theory to show how changing labour market
conditions caused by increased trade union power and activity, as suggested
in the articles, might impact on the determination of wages.
• In the case of the extract on the UK rail strike in particular, consider the
meaning and significance of flexibility that employers want to link to any
pay settlement.
• Use economic theory and examples from your research to evaluate what
might determine the outcome of negotiations over wages and changes in
labour market conditions.
IDBEC001 Business Economics
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Article 1
US unions see unusually promising moment amid wave of victories
Adapted from Guardian articles by Steven Greenhouse Wed 16 Mar 2022 and
Michael Sainato a Fri 1 Apr 2022
The recent, much-publicised wave of union victories in the US at companies as
varied as the giant coffee chain Starbucks, trendy outdoor outfitters REI and
media group the New York Times is spurring hopes that this will somehow turn
into a much larger unionization wave that lifts the incomes and improves the
working conditions of millions of Americans.
Union strategists are debating whether there are ways to transform the wins
at Starbucks – workers at six Starbucks have voted to unionize so far – into a
wave of unionization at McDonald’s and other fast-food companies, and whether
the REI victory could be a springboard to victories elsewhere in retail, perhaps at
Walmart or Whole Foods.
While the recent union wins fuel optimism, the Bureau of Labour Statistics
reported in January that just 10.3% of US workers are in unions and just 6.1% in
the private sector. In the 1950s, more than one in three private-sector workers
were in unions, in the 1980s, more than one in five. Now it’s just one in 16.
However, another union breakthrough came when Amazon workers in New
York have voted to form a union in what labour leaders are calling a “historic
victory” against the US’s second largest employer. In Staten Island, New York,
2,654 warehouse workers voted yes to forming a union, while 2,131 voted no.
The Staten Island victory marks the first successful US organizing effort in the
company’s history. Organizers have faced an uphill battle against Amazon, which
now employs over one million people in the US and is making every effort to keep
unions out.
*Continued on the next page*
IDBEC001 Business Economics
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Amazon workers there are seeking longer breaks, paid time off for injured
employees and an hourly wage of $30, up from a minimum of just over $18 per
hour offered by the company. The estimated average wage for the borough is
$41 per hour.
“You have thousands of people who are standing up at Amazon wanting to be
part of this movement,” one union leader said. “It relates to how people feel they
were treated during the pandemic. Their contributions were not being rewarded
sufficiently, and the risks they took were not being recognized sufficiently.
Workers felt the callous indifference of too many employers. Plus, workers were
concerned about the profiteering that was going on and the exponential explosion
of income inequality. The same union leader went on to say “Moreover, workers
feel unusually empowered because of a low unemployment rate and a record
number of job openings.”
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Article 2
In a tight labour market, strikers have more leverage than before
Adapted from an article in The Economist October 21st 2021
The pandemic has been very good for sellers of cornflakes, and very busy for
those who make them. With so many people spending so much time at home,
cereal consumption has boomed. Kerry Williams, an instrument technician, says
this has translated into almost constant overtime shifts at his Kellogg’s plant in
Pennsylvania, sometimes as long as 16 hours a day. That would be hard enough.
But what makes it that much harder, he says, is seeing Kellogg’s, one of the
world’s biggest producers of ready-to-eat cereals, pull in giant profits even as his
pay has barely increased. “We feel it’s time that this money trickles down to us,
because without the workers on the floor there would be no Kelloggs,” he says.
Mr Williams and about 1,400 colleagues at Kellogg’s factories round the country,
from Tennessee to Michigan, have been on strike for two weeks.
They are far from alone. On October 14th about 10,000 employees of John
Deere, a manufacturer of agricultural machinery, walked off the job in five states.
More than 20,000 nurses and workers in California and Oregon with Kaiser
Permanente, a health-care company, have voted to strike. About 60,000 behindthe-scenes film and television workers were also set to head to picket lines,
having voted 99% in favour of a strike, but a last-minute deal averted that.
Partly it is the resumption of trends visible before covid-19. Nearly half a million
workers were involved in work stoppages in both 2018 and 2019, the most in
more than three decades. That reflected both dissatisfaction with pay and
working conditions and the unions’ confidence that, in a tight labour market, they
had leverage. The pandemic has only reinforced these dynamics. Having been
lauded as essential workers for the past 18 months, everyone from nurses to
food-packers expects better treatment. And with companies struggling to find
staff, workers are emboldened.
A dominant feature of the American economy over the past few decades has been
sluggish wage growth. The question now is whether these recent breakthroughs
by unions signal a clearer turning-point, a shift in the balance of power towards
labour. Workers have reason for guarded optimism.
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Several things have weighed against wages and conditions for workers across the
rich world. Advances in technology, including automation, have chipped away at
workers’ bargaining power. So, too, has the globalisation of production. In
America the weakness of unions has exacerbated these trends. Just one worker in
ten belongs to a union today, half the proportion of the early 1980s. The previous
decline in trade-union membership can be seen in the chart below:
Strikers seem to have the public on their side, at least for now. Opinion polls
suggest that 68% of Americans support unions, up notably from a decade ago.
“Everyone in this country is a little tired of the greed,” says Allan Torres, a
middle-aged veteran of Kellogg’s packing operations.
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Article 3
Rail workers to strike across Britain on 27 July, union announces
Adapted from an article in The Guardian by Jasper Jolly Wed 13th July 2022
The railways will grind to a halt again on 27 July as staff stage another national
strike in an ongoing dispute over pay, jobs and conditions.
As many as 40,000 members of the Rail, Maritime and Transport (RMT) union at
train companies and Network Rail will walk out for 24 hours on Wednesday 27
July, with two other rail unions also considering dates for industrial action.
Union leaders made the announcement after rejecting a new offer from Network
Rail which they described as “much too little”. The state-owned company, which
runs Great Britain’s rail infrastructure and most of its big stations, on Tuesday
offered a 4% pay rise for the whole of 2022, followed by a possible 4% next year
if workers accepted changes in working conditions.
However, the RMT said these represented “attacks on their terms and
conditions”. The union said it had yet to receive a pay offer or guarantees over
job losses from the train operating companies.
The dispute comes with relations between unions and the government at a low,
amid widespread industrial action being considered by workers from barristers to
cleaners and teachers. Workers supplying cash and supplies to sub-post offices
are due to stage their second 24-hour strike on Thursday in a protest over pay,
after strikes by employees at 114 crown post offices on Monday.
Mick Lynch, the RMT’s general secretary, criticised “stubborn” train operating
companies for not making an increased pay offer, and said: “Strike action is the
only course open to us to make both the rail industry and government
understand that this dispute will continue for as long as it takes, until we get a
negotiated settlement.
“The offer from Network Rail represents a real-terms pay cut for our members
and the paltry sum is conditional on RMT members agreeing to drastic changes in
their working lives.”
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NOTE: The following grid will be used for marking and reaching an overall mark for the assignment. The marking grid gives
five criteria to award marks. You will see that there is a larger percentage of marks awarded for application and analysis as
this will really show students’ depth and understanding of the subject.
Mark
Range
Marking Criteria
Knowledge (20%) Application (20%) Analysis (30%) Assessment (20%) Study Skills (10%)
80+
16 – 20 Marks
Very good knowledge
with no errors in
understanding
16 – 20 Marks
High level of knowledge
is applied in a clear
manner
24 – 30 Marks
Extensive analysis/use
of theory to explain
answer
16 – 20 Marks
Extensive judgement in
answer and conclusion.
Draws together salient
points to deliver a
strong conclusion.
8 – 10 marks
Written in an engaging style. Excellent
research and consistent use of
references matched to an accurate
bibliography.
60 – 79
12 – 15 Marks
Good knowledge shown
with minor errors in
understanding
12 – 15 Marks
Knowledge is well
applied
18 – 23 Marks
Good analysis/use of
theory to explain
answer
12 – 15 Marks
Good judgement shown
in answer and/or
conclusion
6 – 7 marks
Written in a clear and easily accessible
style. Very good evidence of research
with very good references and an
accurate bibliography.
40 – 59
8 – 11 Marks
Limited knowledge
shown or answer
contains several errors
in understanding
8 – 11 Marks
Limited application of
knowledge
12 – 17 Marks
Limited analysis/use of
theory to explain
answer
8 – 11 Marks
Limited judgement
shown in answer or
conclusion
4 – 5 marks
Written in reasonable and accessible
style. Some evidence of research and
referencing supported with a
bibliography even if this is not set out
correctly.
Less
than
40
0 – 7 Marks
Poor knowledge shown
and fails to give a
minimal level of
understanding
0 – 7 Marks
Application is weak
showing a lack of
understanding of the
module materials
0 – 11 Marks
Analysis is severely
lacking and weak. The
knowledge is not used
for analysis.
0 – 7 Marks
Assessment is missing or
the conclusions given
are weak and no overall
judgment is given
0 – 3 marks
Poorly written and difficult to
understand. Little evidence of research
and poor referencing. Inadequate
bibliography.

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