Current labour market issues

Gig economy

Labour market characterised by the prevalence of short-term contracts or freelance work e.g. Uber, Deliveroo, Amazon

Statistics for gig economy

estimated 4.4 million people in the UK work in the ‘gig’ economy

Benefits of gig economy

More flexible employment paths/hours reduces fixed costs for firms, reduced investment e.g. Uber drivers own their own vehicles, ability to work from home (more autonomy), common way to earn extra income

Disadvantages of gig economy

Lack of holiday pay/sick leave/employment rights, job/income uncertainty, inadequate investment in worker training, often lower incomes

Micro impacts of UK ageing population

Changing patterns of consumer demand in markets affecting profits of firms, impact on housing market e.g. people living in their own homes longer, impact on labour market for different jobs e.g. less young workers to do manual jobs

Macro impacts of UK ageing population

Impact on government welfare spending and future tax revenues, impact on rate of growth of productivity and long-term GDP growth, impact on UK competitiveness

Micro impacts of robotics/AI

Impact on productivity, costs and profits of firms/industries at cutting edge, impact of demand for and supply of labour e.g. in tech companies, impact on consumer welfare e.g. through lower prices

Macro impacts of robotics/AI

Effects of un/employment from extensive capital - labour substitution, effects on govt. finance e.g. if Y tax revenues fall from increased unemployment, effects on competitiveness and exports/patterns of trade

Gender pay gap

Measured difference between average female and male earnings

Equilibrium wage rate

Intersection of supply and demand for labour - employees hired up to the point where the extra cost of hiring an employee is equal to the extra sales revenue from selling their output

Government intervention to improve labour mobility and incentives

• Providing access to better quality training within firms

• Improving affordability and reliability of transportation e.g. subsidies for bus travel

• Creating a bigger difference between pay for those working and welfare benefits for those without a job

• Lowering the burden of direct taxes especially for families on low incomes to encourage work incentives

• Raising level of national minimum wage

• Providing tax-free child care for all children aged 3+