Fig. 1 shows the position of a city bus-drivers' union during annual wage negotiations. The union represents drivers employed by several bus firms. It argue...
Question 1 Report
Fig. 1 shows the position of a city bus-drivers' union during annual wage negotiations. The union represents drivers employed by several bus firms. It argues that drivers have gained extra responsibilities after the introduction of contactless ticketing and passenger-assistance duties. The firms state that their revenue depends on the number of passengers and the regulated fare price. The diagram shows a possible outward shift in the demand for drivers from D1 to D2 after passenger numbers rise.
(a) What is a trade union? [2]
(b) Identify the changes in the equilibrium wage and employment between E1 and E2. [2]
(c) Explain how an increase in passenger demand can increase the demand for bus drivers. [4]
(d) Describe two services, other than wage negotiation, that a trade union may provide for its members. [4]
(e) Which factor could limit the union's ability to secure a large wage increase? [3]
Answer Details
(a) A trade union is an organisation that represents workers and seeks to protect or improve members' interests, including pay and working conditions. [2 marks]
(b) Between E1 and E2, the equilibrium hourly wage rises and equilibrium employment, or the quantity of bus drivers employed, rises. [2 marks]
(c) More passengers increase bus firms' revenue from operating routes. Firms may run more services or increase frequency. They therefore need more drivers to produce this higher output. Since labour demand is derived from demand for bus travel, demand for drivers shifts right from D1 to D2. [4 marks]
(d) A union can provide legal advice or representation in workplace disputes. It can provide training or information to improve members' skills, support health and safety conditions, or give financial support during industrial action. Any two services are required. [4 marks]
(e) A large supply of suitably licensed drivers gives firms alternatives and limits the wage increase the union can obtain. Alternatively, low profitability or regulated bus fares may restrict firms' ability to meet higher labour costs. One developed factor is required. [3 marks]
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