supply- side policies

What is a flexible labour market?

1. Easily adjustable wages (respond to market forces))

2. Ease of hiring & firing (few legal barriers)

3. Part-time & temporary work available

4. Labour mobility

5. Low trade union influence (employers have more control over labour-related decisions)

6. Flexible working conditions (Remote working, flexible working hours & job security)

Evidence for the UK have flexible labour market?

• Gig economy (short-term contracts or freelance work): Uber, Deliveroo

• Zero-hour contracts: as of recent years, employs 1M+ people

• Low unemployment (suggests dynamic job creation)

• OCED indicators (UK scores relatively low on employment protection legislation)

• Remote work (esp after COVID)

Evidence against the UK have flexible labour market?

Brexit has created some frictions- esp in agriculture & hospitality sector (relied on EU labour). A new points-based visa scheme is in place (points are based on Job offer & skill level), which makes it less flexible for low skill industries.

Benefits of a flexible labour market?

1. Improved employment rates

2. Greater competitiveness (businesses can adjust their work force to remain globally competitive)

3. Increased productivity (better job matching)

4. Work-life balance

Risks & drawbacks of a flexible labour market?

1. Job insecurity (short-term contracts & easy dismissal laws)

2. Wage stagnation (weaker bargaining power)

3. Underemployment

4. Inequality & stress (lack of stability, esp in gig or zero hour roles > financial stress)