Trade Unions and Wage Rates

An important and common focus for examinations, the role impact of TUs in different labour markets is a crucial topic to understand.

This brilliant series of videos from Tutor2U will give you key information about the concepts, lines of analysis and evaluative elements you’ll need to address questions on this topic.


To what extent is it inevitable that trade union activity will lead to higher wages but lower employment? (25 marks)

Due Friday 3rd March


National Minimum Wage

This is a key topic in the study of the labour market and a great theme to focus on in exams: lots of scope for high level evaluation and linking issues together (such as labour markets and inequality)!

Tutor2U has provided (once again) a fantastic summary of the key issues together with some wider reading.

Don’t forget – the trade union/NMW diagrams are very similar – so well worth investing the revision time on.

HOMEWORK: Read the LSE article evaluating the NMW and summarise the key points raised.

LSE Min Wage article

Can the minimum wage create jobs?

Unintended consequences? How firms are  dealing with cost rises.

How have businesses adapted to the introduction of the Living Wage?

Collaborative Essay:

Once you have had time to evaluate the key arguments relating to the national minimum wage/living wage, you will work together to develop an answer to the question below:

Evaluate the view that the best way to narrow wage differentials is to increase the National Minimum Wage. (25 marks)


Imperfect Labour Markets: Monopsony and Trade Unions

Can a unionised labour force can drive up wages and also increase employment? 

Watch this video before our next lesson and be ready to explain your answer.

You’ll find lots of further information on Tutor2U

UPDATE: Also worth looking at this: this helpful summary for a great evaluative angle (i.e. the effects depend on the nature of the labour market in question).


Answer all three questions from this past paper: Labour Markets Essay – Past Paper Question-1

Essay Plan

Essay plan

Labour Market: Interesting articles

There is so much in the media about the labour market it can be hard to keep up. Here are some interesting articles that relate the theory discussed in lessons to real life.

Lack of skills and impact on wages

Gender gaps

Tackling the gender pay gap

Discrimination and Wage Differentials


This is a common theme in ECON3 exams – and rightly so.

How far do economic theories help to explain the differences in pay between genders and ethnic backgrounds?

This BBC article is an interesting starting point. Read it and use a diagram to illustrate the wage differential it describes.

Further info about imperfections in the labour market can be found here. Also, it’s worth checking you understand some of the key legislation relating to labour markets.