Copyright 2006 – Biz/ed Labour Market Flexibility
Copyright 2006 – Biz/ed Labour Market Flexibility
Copyright 2006 – Biz/ed Employment Legislation
Copyright 2006 – Biz/ed Employment Legislation Any form of legislation imposes responsibilities on a firm It is likely to lead to increased costs in employing labour This is likely to make the labour market less flexible Some legislation could be aimed at improving information flows
Copyright 2006 – Biz/ed EU Directives
Copyright 2006 – Biz/ed EU Directives Legislation passed by the EU is relevant in the UK Firms in the UK may complain that EU legislation makes the labour market less flexible Firms would point to higher unemployment rates in other European countries as evidence of this Government have opted out in the past (Social Chapter)
Copyright 2006 – Biz/ed Geographical Mobility
Copyright 2006 – Biz/ed Geographical Mobility The ease with which an individual is able to move from one region to another in search of work Job opportunities may arise in certain areas, e.g. the South East of England Many things may prevent workers moving:
Copyright 2006 – Biz/ed Geographical Mobility Family ties Different housing costs Cultural differences Lack of re-location allowances Cost of re-locating Simple unwillingness of people to leave their ‘homes’
Copyright 2006 – Biz/ed Occupational Mobility
Copyright 2006 – Biz/ed Occupational Mobility The ease with which an individual can move from one type of job to another Such ease will depend on: –The differing skill levels of available jobs –The location of the jobs available –The willingness of an individual to change to a different job –The age of the worker –The qualifications of an individual –The degree to which an individual has transferable skills
Copyright 2006 – Biz/ed Education and Training
Copyright 2006 – Biz/ed Education and Training Government policy on education and training aims to improve the ease with which people can access work and move between jobs Recent plans for changes to education (Tomlinson) in part a response to business concerns about literacy and numeracy levels and relevant skill levels of school leavers Part of supply side policy
Copyright 2006 – Biz/ed Poverty Trap
Copyright 2006 – Biz/ed Poverty Trap The phenomena whereby a person ends up being worse off by getting a job than claiming benefit because of the effects of the tax system Tax credits – aim to reduce the effects of low paid when getting a job Incentives to get work increase because the individual is better off in work than on benefit
Copyright 2006 – Biz/ed Benefit System
Copyright 2006 – Biz/ed Benefit System Attempts to reform the benefits system so that it helps those in need who cannot, for various reasons, help themselves Intention to make the benefit system support these people rather than making it a crutch that they come to rely on Reform of the benefit system – part of supply side policy – aims to improve the working of the market
Copyright 2006 – Biz/ed Trade Unions
Copyright 2006 – Biz/ed Trade Unions Trade Union legislation in the 1980s and 1990s restricted the powers of the unions In addition, the nature of the working environment and global trading conditions changed Many unions have adapted to these changes Less militant and more willing to negotiate and compromise Recent cases of hard line militants gaining positions of power – Andy Gilchrist (Fire Brigades Union) Bob Crowe (RMT) Union membership has fallen since the 1970s
Copyright 2006 – Biz/ed Infrastructure
Copyright 2006 – Biz/ed Infrastructure Improved infrastructure may improve the labour market More flexible working practices: hot- desking, flexible hours, working from home, child care facilities Better technology – broadband access Transport facilities – commuter routes, public transport, integrated transport network
Copyright 2006 – Biz/ed Hidden Costs
Copyright 2006 – Biz/ed Hidden Costs Importance to labour market flexibility of hidden costs: –Pension provision – contributions by firms –National Insurance Contributions (NICs) percentage paid by employer – a tax on employment? –Employment legislation –National Minimum Wage –Trade off between improving rights for employees and the impact on the flexibility of the labour market