labour markets

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…

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…

The impact of an ageing population on the economy

The impact of an ageing population on the economy

One of the great achievements of the twentieth century is a dramatic rise in life expectancy. For example, life expectancy in the US has increased from 45 in 1902 to 75.7 in 2004 (link). Even in the past 50 years, life expectancy has risen in most western economies. Life expectancy   However, increased life expectancy combined with declining birth rates have caused many to worry about the impact of an ageing population. Frequently, we hear about…

Policies to deal with the free movement of labour

Policies to deal with the free movement of labour

In this recent post we saw some of the economic and political challenges of allowing free movement of labour within an economic block, such as the EU28. To what extent can the government / EU mitigate these negative impacts, whilst retaining free movement of labour? 1. Funding related to number of people. One issue of free movement of labour is that certain areas can see a sudden influx of migrants, which places a stress on social services, housing and possibly wages. If government spending was more flexible, higher public funds…

Problems of free movement of labour

Problems of free movement of labour

In a recent post, we looked at the advantages of free movement of labour. But, what about the problems which might arise from free movement of labour? Firstly, free movement of labour depends on the area in question. To make an easy contrast, initially, the EU was free movement of workers between 12 / 15 countries in Western Europe. These countries had relatively similar wage rates, and we didn’t see any dramatic shift in workers between EU member states In recent years, the EU has expanded to 28 (27 post…

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Fiscal impact of immigration

If you are interested in fiscal impact of net migration, this study “Fiscal effects of immigration to the UK” is worth reading. Some highlights EU migrants cost the UK government £408.12 per second in public expenditures, and contribute £463.35 per second in revenue. Of all EU migrants, nearly nine in ten are of working age. According to long-term international migration data collected by the ONS, around 48.9 % of EU migrants that came to the UK in 2013 were between the ages of 15 and 24. Meanwhile, 40.9%…