Microeconomics: IB Economics

Stories like this have both micro- and macroeconomic elements - the latter in terms of the impact on the UK's supply-side and, by definition, its productive capacity. 

However, it's an example of a shortage, and the Business Secretary is clearly - and largely rightly of the view that markets are self-correcting. If there's a shortage, wages should rise and people should be incentivised to enter the market.

Haulage companies, and those dependent upon them, are struggling to agree with him - it takes 9 months to train an HGV driver, and I suspect that for many young workers, it will take more than a marginal pay increase to see them enter the profession. So, unless wages rise significantly, I suspect the impasse will continue, and bear in mind that the average age of drivers in the UK is 55. 

Of course, you could point out to the Business Secretary that efficient markets required perfect factor mobility, and in the past foreign HGV drivers filled this gap, but that probably wouldn't fit with the narrative that he's wanting to project. 

The collapse of the aviation sector has meant that a number of pilots have been made redundant and had to leave the sector. It's a high-pressure, high-skilled job and, thankfully for them, this means they've got a high level of occupational mobility.

This article details how three pilots have adapted - you can't help thinking that the Israeli pilot now working in IT has got the best of the bargain. 

The boss of Blackrock is worried that a large-scale retreat from fossil fuels is going to cost jobs - and he's right but it asks some interesting questions of markets. 

If our fossil fuel use doesn't take social costs into account, then surely the efficient outcome might involve such a large scale-retreat and aren't markets dynamic? In relation to people's factor mobility, probably but in many instances a slow transition is often more expensive in the longer-term. Plenty to ponder.

A look at the impact of coronavirus on the labour force, with changing patterns of demand promoting marked changes in the structure of UK labour markets. As a result, many more people are working as couriers, and taking on other part-time jobs in boom sectors, such as grocery retail, demonstrating a high degree of occupational mobility of labour.