Guardian: Is Brexit or Covid to blame for Britain’s supply chain crisis?
Article published: 24 Sep, 2021
IB Economics syllabus: Microeconomics (demand & supply, shortage, interdependence)
Brexit and the pandemic have led to a huge shortage of low-skilled labour in the UK, especially in the food and drink industries. As a result, of less human capital (labour, a factor of production) available it’s much more difficult for firms to keep supplies up. This has led to shortages in goods and services, especially in the above mentioned industries. Perhaps the most striking event connected to the shortage of lorry drivers is the recent shutdown of many UK petrol stations. You might want to search a bit more for the best article about the topic, as this one is already an “Analysis” – as stated at the very top.
Yet, it gives quite a few good points that you can use in your evaluation. Most importantly, perhaps, that “the government has rejected all calls to solve the problem by issuing short-term visas to truckers and other workers from the EU.” In turn, this could potentially lead to a “wage inflation” during the winter, which refers to increased starting salaries for low-skilled workers. You can show it nicely in a demand and supply of labour diagram where supply shifts left.
If you want to use this for your IB Economics commentary (internal assessment), then you can think of many key concepts here: scarcity (of resources), interdependence, change, intervention, efficiency – so quite a few.
Source of image: Xinhua/REX/Shutterstock
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