Gangmasters and monopsony power
How many gangmasters are there operating in the UK? Does the Licensing Authority really have a proper handle on the scale of workers being organised and often exploited by gangmaster businesses? I was discussing this issue of monospony in my A2 revision presentations at London and Manchester in the last week. It is I feel one of the really important aspects of market failure in a largely deregulated labour market.
The BBC reports that ”a gangmaster has been stripped of his licence after investigators uncovered a “disgraceful story of forced labour” amongst migrant workers in Scotland.” The government has introduced a licensing scheme for gangmasters - partly as a consequence of the awful events that unfolded for the Chinese cocklepickers on Morecambe Bay (captured superbly in Nick Broomfield’s recent film “Ghosts").
Has competition in postal services delivered?
Two years on from the liberalisation of the postal services industry, has this supply-side policy to make the market more contestable made any noticeable difference to the quality of service, prices and investment in delivery? A new report casts doubt on the changes to the industry since the market opened up to competition at the start of 2006 to businesses such as UK Mail. Robert Peston reports for the BBC in this video clip. His feature asks whether the universal service provision is a millstone round the neck of the Royal Mail which remains in deep financial trouble.
Aspects of labour market failure
I have been researching some video clips for a presentation on labour market failure at the Tutor2u revision workshops - here are a couple of good ones. This BBC report looks into exploitation of migrant workers by a gangmaster business which has had its licence revolked. And Hugh Pym reports on the rising level of relative poverty in the UK despite sixteen years of economic growth. Finally this clip comes a series of progammes from BBC South East on ‘Breadline Britain’.
Revision: Labour Market Failure
Markets fail when they do not reach an efficient and/or equitable outcome from society’s point of view. At AS level, you will have studied many examples of possible market failure ranging from the provision of public and merit goods through to externalities and the welfare consequences of monopoly power in markets. At A2 level, you are asked to explore some issues relating to labour market failure. This revision note flags up a few of them:
Revision note:
Revision_Labour_Market_Failure.pdf
Dividing the spoils in the milk industry
Many of us use the supermarkets as an example of monopsony power in markets - using their bargaining power to drive hard deals with their suppliers. New research presented at the March 2008 RES Conference provides evidence on how profits from each litre of milk sold are divided up among market participants. It is not good news for milk farmers struggling to make an economic profit and justify staying in the industry.
