labour markets

Participation Rate

Participation Rate

Definition of Participation Rate. The participation rate is the number of people working or actively seeking work as a % of the working population (16-65). The participation rate is similar to the concept of being ‘economically active’. If a person drops out of the labour market, they are considered economically inactive and no longer participating. Why People May Drop out of Labour…

Labour shortages

Labour shortages

Labour shortages occur when employers struggle to fill labour vacancies because of insufficient labour applying for the jobs. Labour shortages can occur in geographical regions or in occupations with special requirements in terms of skill or function. Labour shortages can also be seasonal in industries like retail (Christmas) and agriculture (harvest time) Reasons for labour shortages Geographical shortages. An area with a booming economy, but poor housing can experience labour shortages quicker than the rest of the economy. In the UK, London has strong employment demand but suffers from high rent…

Reasons for falling wages

Reasons for falling wages

Since the financial crisis, we have seen an unprecedented stagnation / decline in real wages. This decline has been most noticeable for low income workers, with growing levels of inequality. The decline / stagnation in real wages is a global phenomena – though some countries have been more affected than others. Reasons suggested for falling wages since 2008 include: Recession – causing unemployment and downward pressure on wages Decline in trade union membership. Increased labour market flexibility, such as more zero hour contracts, new gig economy…

Should we increase the state pension age?

Should we increase the state pension age?

Many Western economies face a demographic time bomb – an ageing population, which places strain on government spending and the welfare state. To deal with this situation, governments face several difficult choices – Raise taxes to pay for pensions, Shift the emphasis on to the private sector provision of pensions, Raise the retirement age Cut other forms of spending to be able to maintain pension commitments. Recently, the UK chancellor George Osborne, has suggested that he favours a solution which involves automatically linking state pension to life expectancy; this…

Mobility of labour

Mobility of labour

Mobility of labour refers to how easily workers can move to different jobs within the economy. The two main factor of labour mobility are: Geographical mobility – how easy is for a worker to move between different regions and countries to seek new work. Occupational mobility – how easy is it for a worker to move from one occupation to another. We can also distinguish between an individual’s labour mobility and overall labour mobility for an economy. Personal labour mobility – each individual will have his own unique set of…

The gig economy

The gig economy

The gig economy refers to the segment of the labour market which concentrates on short-term / temporary jobs and contracts. Often these workers can have more than one job, e.g taxi driver who works both for traditional taxi company and Uber. Like a musician who goes from one gig to the next, the gig economy refers to a growing range of workers who don’t have typical stable employment, but work as self-employed and temporary contractors. The number of people who work for themselves…

Blaming immigrants and a tolerant society

Blaming immigrants and a tolerant society

I recently watched a BBC documentary (No place to call home) about Britain’s housing crisis, focusing on a suburb of London (Dagenham). It was an insight into the desperate situation many find themselves in because of a shortage of housing, very high rents and a feeling the council / government is unable to help with the basic human need of housing. Like many people in the film, I always assumed that a council had a social contract to provide the…