Recent changes in UK Labour markets

  1. De industrialisation

Since the early 1980s, there has been a decline in the relative size and importance of the manufacturing sector. Therefore it has caused the following effects:

  • Less full time manufacturing jobs
  • Decline in Trades. Unions. Trades unions used to have a strong union density in the manufacturing sector
  • Structural unemployment. This is a particular problem in the North and amongst low skilled workers (often male).


  1. Increase in Relative Importance of Service Sector

As the manufacturing sector has declined, there has been an increase in the service sector. This has caused the following effects:

  • Unions less influential. This is because it is more difficult to form unions in the service sector where there is more disorganisation of workers.
  • Increase in part time and flexible working hours
  • Increase in proportion of women in the labour force because they tend to prefer service sector jobs to manufacturing


  1. Increase in % of  Old People.

This leads to an increase in the dependency ratio, fewer workers have to support more economically inactive people.

4. Increase in Labour Market Flexibility

This flexibility is due to:

  • globalisation and increased competitive pressures causing downward pressure on wages.
  • increase in service sector
  • changing technology
  • Government policies which have promoted more flexible labour markets