Pay freezes and macro performance

Monday, November 16, 2009
Print RSS Tweet This! Save this entry to my Favorites

The forum post I am setting my AS macro students this week focuses on the possible economic impact of wage cuts and pay freezes. I am hoping it will help to develop their evaluative skills and get them to apply some AD/SRAS concepts. As the UK economy continues to experience a recession, pay is under pressure. The average wage in Britain, including bonuses, fell by 0.4 per cent in the three months to March 2009 – knocking about £95 off annual salaries to £24,000. People working in the private sector are at highest risk of a wage freeze or actual wage cut and public sector workers are also at risk of pay freezes in the months ahead.

Suggested reading

Half of UK firms plan a pay freeze (Telegraph)
Pay freeze in deal to save car plants (Independent)
Osborne plans one-year public sector wage freeze (Independent)
Outlook for jobs will remain grim for several years (The Times)
Wage cuts might condemn the economy to more misery (Telegraph)
FTSE bosses get big salary rise (BBC news)

Examine some ways in which a move towards wage cuts or pay freezes might affect the macroeconomic performance of the UK economy

The forum posting is designed to encourage students to read around the subject, develop a concise written style and build evaluation skills. The Moodle system is set up so that students can only see the postings of others once they have submitted their only entry. I will post a couple of replies later on in the week.

Rated: 54321 (5/5), based on 1 review

Rate this article:   

Print RSS Tweet This!


ECONOMICS TEACHER RESOURCE NEWSLETTER

Join over 4,000 other Economics Teachers in the UK and around the world who receive the tutor2u Economics Resource Email newsletter. Get special offers, first news of latest resources, teaching ideas, conferences and workshops.

*  Your Email Address:
*  Preferred Format:
    AS/A2 Economics Board:
    GCSE Economics Board:
*  Country:
    Full Name:
    Job / Position:
    Postcode:
    School / College:
    Town / City:
*  Enter the security code shown:



Recent Threads on the Economics Teacher Discussion Forums:
Posts in: General Economics Teaching

Video Case-study - lunchtime prices slashed
Long Exam Example to Use for Revision Please?
Good hotel in London for school trip
Competitive Markets
Diminishing Returns
Complementary goods - HELP Please!
URgent Help Needed
Equilibrium concept
The price of life
Extended Project Qualification





Comments

Name:

Email:

Location:

URL:

Smileys

Remember my personal information

Notify me of follow-up comments?

Submit the word you see below:


Most Popular Topic Tags on the Economics Blog

recession, demand, economics, price, unemployment, prices, inflation, investment, costs, profit, downturn, supply, trade, debt, employment, confidence, euro, gdp, competition, capacity, risk, production, china, oil, incentives, exports, expectations, housing, pay, manufacturing, sterling, food, profits, property, mortgage, tutor2u, globalisation, banks, revision, slowdown, borrowing, usa, retailers, emissions, deflation, airlines, innovation, dollar, supermarkets, entrepreneur, efficiency, monopsony, elasticity, aqa, welfare, consumption, economist, productivity, saving, google, keynes, opec, wealth, depression, moodle, depreciation, jobs, credit crunch, competitiveness, economic cycle, cars, externalities, stocks, infrastructure, environmental, strategy, tim harford, carbon, vle, monopoly, subsidy, evaluation, management, eu, losses, protectionism, spare capacity, inequality, environment, poverty, bank of england, budget deficit, construction, behavioural, wages, macroeconomics, carbon trading, steel, commodities, output gap, skills, japan, oligopoly, currencies, imports, bbc, stagflation, contestable, cpi, agflation, farming, newsnight, choices, regulation, survey, taxes, government failure, itunes, minimum wage, lse, climate change, paul mason, population, intervention, aviation, keynes society, amazon, fiscal stimulus, single market, pricing, dan ariely, nationalisation, cartel, pollution, eton college, interest rates, shareholder, london, rationality, redundancies, market failure, rpi, mpc, shipping, behavioural economics, germany, robert peston, india, rsa, reputation, quantitative easing, currency, facebook, income elasticity, stakeholders, current account, brazil, coffee, savings, microsoft, crowding out, monetary policy, barriers to entry, collapse, multiplier effect, suppliers, economies of scale, price discrimination, development, uk economy, quiz, apple, surplus, taxation, tesco, free, scrappage, labour market, behaviour, opportunity cost, tragedy of the commons, open source, vat, smoking, cost of living, poverty trap, growth, merger, speculation, edinburgh, ownership, discrimination, northern rock, global, cost benefit analysis, ireland, oecd, supply chain, shareholders, scarcity, balance of payments, petrol, liquidity, duopoly, etonomics, iphone, starbucks, trade deficit, happiness, budget, human capital, capital, subsidies, immigration, eurozone, takeover, exploitation, ecb, paradox of thrift, wiki, advertising, public sector, peter day, utility, wants, labour force survey, brand, tax, poland, iceland, blog, recovery, foreign exchange, indirect tax, european union, roger bootle, ocr economics, robert frank, heathrow, hbos, hotels, freight, creative destruction, federal reserve, kaletsky, price war, information failure, crude oil, spain,
All tags

Login to the tutor2u Moodle VLE

Get a daily email update of new resources on the Economics Blog

Discussion forums for Economics teachers

Follow tutor2u on Twitter

 Jim  | Geoff  | Others

Latest entries

Categories

Monthly Archives

Syndicate