The Changing UK Labour Market

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The Changing UK Labour Market

This is a huge topic in itself. I will cover the main points below, but you really must research newspaper articles and up-to-date textbooks to keep in touch with the changing UK labour market.

This was defined earlier. Economic activity has moved away from manufacturing and into the service sector for a number of years now. The question in this section is, how has this affected the structure of the UK labour market?

We have already discussed the effect on trade unions. What types of worker will have lost their job in manufacturing and what types of workers will have found jobs in the service sector?

The answer is that male workers tended to lose their jobs in manufacturing and female workers seemed better suited to the new jobs in the service sector. In particular, many of the jobs in the service sector are part-time, which probably suit women better, especially if they are the second earner in the household, or have young children at school. Male workers, especially the more traditional ones, would not accept a part-time job in exchange for the full-time job they had just lost, regardless of the fact that their skills are probably less suited to the service sector.

Of course, in recent years, we have seen the rise of the career woman. Many women are getting married later, having children later (if at all) and concentrating on their full-time job well into their 30s. Some will sacrifice children altogether. Certainly women's performance in examinations is as good or better than those of the male, so now that the restriction of the family has been removed, their achievements in the workplace are at least as impressive as those of their male contemporaries.

Changing Labour Market

To put some figures on this phenomenon, thirty years ago, nearly 100% of males were economically active (in work, or unemployed but actively seeking work) right up to the age of 60. Now this figure has declined to 90% by the age of 50 and drops below 80% as they reach 60 (lots of early retirement going on, forced or otherwise). On the other hand, thirty years ago, less than 60% of females of childbearing age were economically active, falling to 50% up to retirement age. Now, this figure is nearer 80% before dropping as before as females approach the age of 60.

Many economists talk about the UK labour market being more flexible. Put simply, this means that employers have more flexibility. It is easier for them to hire and fire. Of course, those in full-time jobs are well protected by various employment laws. It is those in part-time work and temporary employment that suffer, although part-time workers have been granted more rights recently.

This has become a bigger issue due to the rise in the number of workers in part-time and temporary jobs. We have already mentioned the fact that women are more suited to part-time work and service sector jobs. The growth of this sector of the economy coupled with the extra time that women with families are making for themselves has been the driving force behind the huge increase in part-time work (15% of all employees thirty years ago compared with nearly 30% today). The increase in students, and the resulting rise in the numbers looking for part-time work has also been a significant factor.

Temporary work is the least secure. Although some of those working in temporary jobs (nearly 8% of employees up from 6% ten years ago) choose to do so, most are on temporary contacts because employers are looking for more flexibility. Full-time employees cost more (holiday pay, possibly a pension and sick pay), but are at least more productive because they are probably more familiar with the working environment. Temporary workers are particularly popular with employers in an upturn (especially after a grim recession) because they may not be sure that the improvement in the economy will be permanent. They can always get rid of the temporary workers if things don't turn out as expected.

There has been much talk about the increase in insecurity in the UK labour market. Having read the previous section, you can probably see why this claim has been made. Often employers change the contracts of previously full-time secure workers so that they are temporary. If they refuse to sign, they lose their job. Employees will tend to sign, but the contract makes them feel much more insecure in their job. Insecurity was a buzzword in the early 90s. During the recession, everybody seemed to know someone who had lost their job, not just in the traditionally declining manufacturing industries, but also in the, supposedly, more secure service sector. Even the civil service was not necessarily a job for life! This tends to encourage a feeling of insecurity even if the facts do not bear this perception out.

Gregg and Wadsworth from the London School of Economics compiled these facts. They found that average job tenure had remained fairly constant at around five years since the 70s. Having said that, the figures for males did hide some more worrying specifics. Job tenures for males over the age of 50 had fallen significantly, and job security for the under 25s had declined by 37%. This is a worrying trend for the future. It is often the younger workers who enter the even newer Information Technology sector of the economy where job security can be even lower. Many young people are finding it harder than ever to find a job at all. The government's New Deal programme has been extended to the young to try and solve that problem.