Labor Market Impact of a New Ride-Sharing App
A major metropolitan area sees the rapid introduction and adoption of 'FlexiDrive,' a new ride-sharing application. The app allows anyone with a car to become a driver and earn money on a flexible schedule. However, this work offers no health insurance, retirement benefits, or job security. Many individuals who were previously unemployed or in low-paying retail jobs begin driving for FlexiDrive. Analyze the likely effect of this development on the curve that represents the real wage firms must pay to secure adequate worker effort at each level of economy-wide employment. Explain the reasoning behind this effect.
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The Economy 2.0 Macroeconomics @ CORE Econ
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Imagine an economy where a significant portion of the workforce transitions from stable, long-term employment to more insecure, short-term 'gig' work. In a model representing the real wage that firms must offer to secure effort from employees at various levels of economy-wide employment, what is the most likely consequence of this trend and why?
Gig Economy's Impact on Worker Incentives
The proliferation of app-based freelance platforms, which offer flexible but often insecure work arrangements, strengthens the bargaining position of the average worker. This empowerment leads to an upward shift in the curve that represents the real wage firms must pay at each level of employment to secure adequate worker effort.
Labor Market Impact of a New Ride-Sharing App