How the U.K. Labour Market Has Changed Over The Last 20 Years

How the U.K. Labour Market Has Changed Over The Last 20 Years

The different types of Unemployment

There are many different types of unemployment, these are: frictional

unemployment, structural unemployment, seasonal unemployment,

classical unemployment, and demand deficient unemployment.

Frictional unemployment is unemployment for a short duration of time

as workers move from one job to another. Over the last 20 years

information has improved and people are more aware of the availability

of better paid job, promotions etc and hence they may be moving form

job to job more often hence increasing temporary frictional

employment. Structural unemployment is caused by a lack of capital for

goods and services in the economy or a particular sector. As the

structure of an economy changes, certain workers may find themselves

made redundant as their skills are no longer required, or that the

region in which they live does not have enough employment

opportunities. An example of this is the British ship building

industry, which has contracted to the extent that workers with skills

appropriate to this industry either cannot find jobs at all or must

migrate to find them. Structural unemployment will be affected by the

cost and availability of retraining, which would allow people to

acquire skills which will be useful to them in filling the vacancies

which are available. The ease of relocation within the country will

also have an effect on structural unemployment. As the economy moves

according to the business cycle, there are booms and recessions, and

this is reflected in output and unemployment over the last 20 years

structural unemployment has fluctuated accordingly due to the lack of

capital, with recession in the early 1990's and high structural

unemployment and booms in recent past with low structural

unemployment. The lack of employment at this time is due to the lack

of money to invest and expand, and as a result output is greatly

reduced. However, nowadays, unlike the past 20 years, credit is now

available much more easily for companies through banks and building

societies so not as many employees are affected by structural

unemployment.

Demand deficient unemployment is caused by a lack of demand. Keynes

believed that unemployment had more to do with the goods market than

the labour market. Low demand in the goods market would mean low

overall output, and therefore low demand for labour, over the last 20

years, demand has raised overall hence demand deficient unemployment

will reduce. During times of recession there is very little output and

not many people are needed in the workforce. This leads to high

unemployment levels. This situation arose in the late 1980s and early

1990s, when there was a recession.