Trade union membership is decreasing in some countries, but it is increasing in China. Industrial action by workers is becoming more common in China, with workers seeking higher wages. Recently there was a strike at a car factory in South China, owned by a Japanese multinational company.

Mark scheme

Marking points from the official mark scheme (May/June 2015). The mark or mark type is shown in brackets.

1. [1] a company that has its headquarters/is based in a country
2. [1] but produces in a number of countries
3. [1] strikes disrupt output/service provision
4. [1] this may result in customers being lost
5. [1] increase firms' costs of production
6. [1] and lose international competitiveness
7. [1] lower output/incomes/GDP
8. [1] and therefore lower living standards
9. [1] may reduce exports
10. [1] and so harm the balance of payments position
11. [1] may cause unemployment
12. [1] leading to higher spending on welfare benefits
13. [1] may discourage FDI
14. [1] and job opportunities
15. [1] lower output will reduce tax revenue
16. [1] and so reduce the government's ability to spend
17. [1] trade union subscriptions may increase
18. [1] making it more expensive for people to join a trade union
19. [1] legislation may reduce the power of trade unions
20. [1] this would make membership less valuable
21. [1] employers may not recognise trade unions/be reluctant to employ members of trade unions
22. [1] this may make people reluctant to join as it would reduce their employment opportunities
23. [1] unemployment may mean that there are fewer people in employment to belong to trade unions
24. [1] it will weaken the power of trade unions
25. [1] in a boom period/high level of economic activity
26. [1] workers may gain wage rises/better working conditions without belonging to a trade union
27. [1] workers may be satisfied with pay and conditions
28. [1] may not agree with actions of trade union
29. [1] government action to improve the pay and/or conditions of workers e.g. introduction of national minimum wage
30. [1] reduces the need for collective bargaining
31. [1] higher wages will mean a higher wage bill
32. [1] if output does not increase by more than wages, labour costs per unit will increase
33. [1] costs of production will increase
34. [1] profit is revenue minus costs
35. [1] with higher costs and the same revenue, profit will fall
36. [1] paying higher wages may prevent strikes
37. [1] this can reduce costs of production
38. [1] higher wages may motivate workers
39. [1] this can increase productivity
40. [1] reduce costs of production
41. [1] higher wages may make it easier to recruit workers
42. [1] this can reduce costs of production
43. [1] higher wages may make it easier to recruit skilled workers
44. [1] this will raise productivity
45. [1] reduce costs of production
46. [1] other costs may be falling e.g. rent, corporation tax
47. [1] demand for the firm's products may be increasing
48. [1] this will raise revenue
49. [1] higher wages may be paid to a smaller labour force
50. [1] reducing the wage bill