BIOC 212 Chapter Notes - Chapter 3: Structural Change, Technological Change, Flextime
17 Aug 2018
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Chapter 3: economic and social environments part ii. The economic context: labour power and marshall"s four conditions: Product market: degree of competition in the product market. Substitution effect: the degree in which you can substitute capital for labour. If you can be replaced by technology, you don"t have much power. Example with medical professionals: x-rays can be sent to anywhere in the world, no need for radiologists. Labour intensity: degree to which labour costs account for production costs. The smaller the proportion of total labour costs the lower the employment impact of a wage increase will be thus more bargaining power. Example: airline --> labour cost is minimal. If labour is small fraction of cost, you have room to ask more. The cheaper and more available market substitutes the lower bargaining power for union. Immigrants can take job for cheaper money: other non-economic sources of union power. Back to work law gives management power.
