Hey all, here are your updates on the UK and Global Economies! We will be starting an A-Level Tips newsletter for year 12s soon, so if you want to sign up, do so here

UK

- A study has shown that 22mn UK households use a clubcard! (Think of this ingenuis non-price competition!)

- The base rate is staying at 4.5% after the monetary policy committee meeting earlier this week 

- Heathrow Airport has closed, with 1,300 flights to be cancelled on Friday (how will this effect productivity - can the UK effectively deal with external shocks?)

Global 

- AstraZeneca is seeking to invest $2.5bn into China 

- The EU announced plans for €18 billion in tariffs on U.S. goods, responding to U.S. metal tariffs

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This week's A* Essay plan! If you want 25 more A* Essay Plans click here

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Why are wages for a construction worker higher than other professions? (25)

Demand - side factor - To be a construction worker, you need around 4 years of vocational training. Not many people have done this training and there is a lack of training offered for women with 99% of the industry filled by men.  This means supply is kept low, as people are unwilling to train for 4 years. Moreover, the low pay for construction workers has led to many leaving to Switzerland where the average pay is double, at 80,000 a year. Brain drain shifts supply left

Eval - The UK government has introduced T-Levels which are free for students younger than 19. This can reduce the barrier of entry to the construction industry. Government has began to subsidise companies that offer apprenticeships, shifting out supply of apprenticeships and increasing the number of construction workers, meaning that their wages should be lower than other professions.

Supply-side factor Some jobs like being a lawyer have large non-pecuniary benefits (benefits not related to the wages) like a work phone, a gym membership or discounts at expensive restaurants. Construction workers have poor non-pecuniary benefits and the work conditions are very poor, working in very hot weather and can easily develop back pain and monotonous nature of the work etc. This means, consumers, who are rational, will not supply their labour because they may get injured or do not benefit from any non-pecuniary benefits, this reduces the supply of construction workers, raising their wages.

Eval - Job satisfaction, construction workers often have flexible hours of work and a good work-life balance. There are career growth opportunities in construction which other industries don’t offer e.g. construction manager (around £60,000 annual salary). Could also be due to discrimination, 99% of construction workers are men, lack of supply of women = higher wages than other industries. Could be due to a lack of migration.