Tag: Labour

Labour Matching Models

Posted on by Rhys Williams

Labour matching models stem from the fact that when a worker becomes unemployed, he needs to look for a job and such a process is not instantaneous. He cannot simply occupy any vacancy, but has to search for a job in a certain area, in a certain profession and which matches a list of criteria such as wage, hours of work and subjective factors like “would I enjoy working here”. This all takes time and requires effort. Before such matching models were devised, economists assumed in their models that unemployment could instead be modelled by looking at the number of unemployed and the number of vacancies and then working out how many of the unemployed could take these vacancies. [...]

Why have unions declined over the last 30 years?

Posted on by Rhys Williams

Account for the collapse of private sector trade unions in industrialised economies since the 1980s. Why has the experience of public sectors been different?

In the 1980s 54.5% of employees were trade union members but by 2000 this number was below 30%. This decline in unions can be seen through a variety of measures; in 1980 64% of all workplaces recognised at least one union, this dropped to 42% by 1998; in 1984 some 70% of employees were with a workplace which conducted some form of collective bargaining, by 2004 this figure was at 39%. Many factors have been proposed for this decline of trade unions in the private sector and to a limited extent in the public sector. [...]

Minimum Wages

Posted on by Rhys Williams

Why have statutory minimum wages become more prominent in recent decades? Why have they generally had little adverse effect on employment?

Prior to the introduction of the national minimum wage (NMW) in 1999 there had been no statutory wage floors since the abolishment of the Wages Councils in 1993 by the Conservative government. Growing wage inequality in both the D50:D10 and D90:D50 measure (which looks at the differing wage rates in the respective percentiles) was one of the leading reasons in the demand for some form of minimum wage to counter this growing inequality. Metcalf finds that the NMW reduced the D50:D10 ratio by 9 points if we include the effects of immigration. [...]

New Labour v.s. Old Labour

Posted on by Rhys Williams

New Labour was forced by political circumstances to adopt neo-liberalism and the Conservative European, Foreign and Defence policies, and so abandoned traditional Labour party ideology. Discuss.

New Labour began government with a promise not to increase spending above Conservative plans for the first two years of their government along with no increases in basic or high income tax. The government was strongly pro-Europe and wanted Britain to play an active role in the policy making decisions of the EU along with a future promise to join the monetary union. Foreign policy took on an ethical role with the government promoting human rights and intervening to stop abuses. [...]

French Labour Inflexibility

Posted on by Rhys Williams

This article shows the the extent of the French labour market inflexibility and as a result the uncompetitiveness of the French economy and may provide an explanation as to why it is falling behind compared with Northern European economies.

Meanwhile UK unemployment falls again, despite economic output similarly falling, this will result in a fall in productivity. [...]

The Costs and Distributional Effects of Unemployment

Posted on by Rhys Williams

The classical view on unemployment says that there are only unemployed people who are not able and willing to work at the going wage rate. So if people would accept a lower wage they would find jobs. In this view all unemployment is a short-term problem and the best solution is laissez faire – leave the market to find equilibrium to resolve the issue of unemployment.

If people accept lower wages then the costs of living will fall as firms do not need to charge such high prices, so in fact workers will find the lower wages are acceptable once they start work. [...]