Firms have to pay payroll taxes and employers social

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: o equalize supply and demand, labour in the amount of LS – LD remains involuntary unemployment. Percentage change in unemployment 0,25 0,2 0,15 y = 1,6606x + 0,0073 R² = 0,25611 0,1 0,05 0  ­0,03  ­0,02  ­0,01 0 0,01 0,02 0,03 0,04 0,05  ­0,05  ­0,1  ­0,15 Percentage change in real hourly minimum wages USA. Source: OECD.Stat and World Economic Indicators, World Bank. 0,06 Gov’s polices: tax wedge Tax wedge in the difference between the labour costs of firms and the wage that workers take home. Firms have to pay payroll taxes and employers’ social security contribuCons. These costs shits the labour demand let. Workers are requested to pay earnings tax, which shits the labour supply curve to the let. CollecCve bargaining coverage rate(%) Trade unions: are they important? 100 AUT FRA ESP BEL FIN ITA 80 SWE DNK 60 40 UK USA 20 JPN 0 0 10 20 30 40 50 Union density rate (%) Source: CollecCve bargaining coverage rate, ICTWWS Database. Union density, O...
View Full Document

This note was uploaded on 03/11/2013 for the course ECON ES20013 taught by Professor Martin during the Spring '12 term at University of Bath.

Ask a homework question - tutors are online