labour markets application Flashcards
factors that have been affecting demand for labour app
Tesco automation → Self-checkouts reduce demand for cashiers
Construction demand boom post-Covid → Labour demand ↑
NHS hiring drives → Increase in demand for nurses
supply of labour app
NHS nurses: Training length + low pay = shortage
Tech jobs: High wages attract workers → supply ↑
Teaching: Workload + low relative pay = supply issues
Current labour market issues UK
Public sector strikes (NHS, teachers) due to real wage cuts
Gig economy growth → Insecure work, poor rights (Uber, Deliveroo)
Youth unemployment: Especially post-Covid(over 1 million NEET’s )
Gender pay gap: Still around 14% in the UK (ONS 2023)
Gov freezes / caps (e.g. 1% rise cap in NHS post-2010 austerity)
teachers pay rise
6% 2024 -2025
incentives to increase labour activity
In 2023–24, over 40% of jobs offered some form of hybrid working (office + home)
Gig economy expansion
Growth of gig work (Uber, Deliveroo, freelance platforms). Around 4.5 million people now work in the gig economy (up from 2.8 million in 2016)
Fall in economic activity rates
➡️ Rise in economic inactivity (people aged 16–64 not working or actively seeking work) since COVID.
➡️ Long-term sickness has surged — over 2.8 million people in the UK economically inactive due to ill health (ONS 2024).
Occupational Immobility
➡️ Skills shortages in construction, engineering, and IT — firms struggling to find workers with the right skills.
➡️ A major issue post-Brexit: fewer EU workers + domestic skills gaps
Public Sector Wage Strikes
Junior doctors: demanded a 35% pay rise to “restore pay erosion” (as their real-terms pay has fallen by around 26% since 2008 according to the BMA).
Nurses: held the first-ever national NHS strike in December 2022 and early 2023; they rejected an initial 5% pay offer.
Teachers: NEU (National Education Union) members went on strike in 2023; teachers in England won a 6.5% pay rise for 2023/24 after negotiations.
Rail workers: RMT union members took repeated action; they accepted a 9% pay rise over two years (2022–2024).
Public vs Private Sector Pay Growth:
Private sector average pay growth (2023): 7.9% (ONS)
Public sector average pay growth (2023): 5.8% (ONS)
Geographical Immobility
Average house price in London: £528,000 (as of early 2024, according to the ONS).
Average salary in London: around £44,370 (ONS 2023) — affordability ratio remains very stretched at about 12x salary.
First Homes Scheme:
Launched in 2021, offers homes at a 30% discount for first-time buyers and key workers (e.g., nurses, police officers, teachers).
Eligibility cap: £420,000 in London after the discount.
Occupational Immobility
Vacancies in the construction sector: around 40,000 open jobs (ONS 2024).
Vacancies in IT and engineering:
IT and Communications → 60,000+ vacancies.
Engineering and manufacturing → 30,000+ vacancies.
Post-Brexit effect:
According to the Migration Observatory (Oxford University), the UK saw a shortfall of over 300,000 EU-origin workers in lower-wage sectors like construction, agriculture, and care homes by 2023.
Lifetime Skills Guarantee:
Announced in 2020 but still expanding in 2023–2024. Offers fully-funded Level 3 qualifications (equivalent to A-levels) in shortage areas like digital skills, healthcare, and engineering.
✅ Analysis:
Shortages persist despite government funding because upskilling takes time.
Inelastic supply of skilled labour → long-run solutions needed.
number of vacancies
fell to 781,000 , the lowest level in nearly 4 years
Real living wage and its increases
- an unofficial hourly rate that is overseen by the living wage foundation charity
- rose to £13.85 , a 5.3% increase
london median house price vs income
median house price = 510K
median salary = 47K
Decline in Trade Union Membership
UK union membership fell from 13 million in 1979 to around 6.2 million in 2023
Suggests reduced worker bargaining power → helps explain stagnant wages in low-skill sectors like retail or hospitality.
. Occupational Immobility Post-Brexit
Drop in EU workers + lack of UK skills in sectors like construction & logistics
➡️Takes years to retrain workers → short-term labour shortages despite training schemes.
Apprenticeship Schemes & Training
UK offers “T Levels” and “Lifetime Skills Guarantee” to reduce skill mismatch
EV: time lag and opportunity costs
largest trade unions in the UK
UNISON - 1.3 million members
Unite the union - 1.2 million
GMB - 570,000
Ntional Education Union - 497,000
