Structure of employment in the UK

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The labour force within the UK can be divided into four different industries: the primary sector, the secondary sector, the tertiary sector and the quaternary sector. The primary sector includes agriculture, fishing, forestry, coal mining and steel works. The secondary sector includes manufacturing, construction and the supply of energy and water. The tertiary sector is the selling of goods and provision of services. Finally the quaternary sector is the information technology sector, and it is very hard to draw a line of distinction between the tertiary and quaternary sector.

In 1971 the population of the labour force in the UK was 21.6 million, of which 5.5% were in the primary sector, 41.8% in the secondary sector and 52.6% in the tertiary sector. The UK employment in the primary sector has declined for many reasons in the past 20 years. One reason is that due to new technological advances the same amount of labour is not required in this sector. Another is that steel works have moved to countries where they can pay lower wages to the work force and thus reduce production costs and increase profits. Foreign governments have attracted the firms in the primary industry by giving them grants and reducing taxes.

The secondary sector, the manufacturing sector, has also declined rapidly in the last 20 years. The UK motor vehicle manufacturing peaked in 1964 but ever since has been in decline. This decline in manufacture accounted for most of the peak unemployment in the early 80’s and 90’s, this mainly affected the North and Wales. Between 1978-84 1.9 million jobs were lost in manufacturing as employment collapsed by 19%. Employment in the energy sector has also declined along with employment in electricity, gas, water supply and other energy industries; they fell to less than 160,000 in 1996. The reason for the decline in the secondary sector was due to two main points:

1) Trade cycle, 2) Loss of comparative advantage to new producers. The goods that were manufactured in the UK became uncompetitive in two respects; price competition and quality competition. The manufactured goods became non-price competitive because the price of factor input was high and productivity is low and therefore the average total cost was high. Whereas in other countries the price factor input was also high but the productivity was also high and therefore the average total cost was low.

The price of factors is high because the labour costs are. Labour costs account for 70% of the total costs and the labour productivity is low because the level of skill is quite low. The low labour productivity lead to low quality of fixed capital that in turn meant that the quality of the good was low. Another reason for firms moving away from Britain is that the trade unions have become very strong and demand high wages and poor work practices, so firms move to countries with weak trade unions.

The tertiary sector has which involves selling things and providing services has increased in the last 20 years. Unemployment in the primary and secondary sectors increased and people were encouraged by this to move onto the tertiary sector. The tertiary sector increased from being 52.6% of the labour force in 1971 to being 76.4% of the labour force, from 11.4 million to 16.4 million. The early 1990’a saw a fall in the tertiary sector as the falling house prices leads to job losses in high street retailing, estate agents and other complementary industries. 1 (b) Comment upon the increases in activity rates for women and on the growth of part time employment in the UK economy.

The part time employment in the UK grew rapidly from the late 1980’s. A survey showed that the part time jobs increase by 23.9% from 1987 to 1997, where as full time jobs increased only by 1.8%. This growth in part time employment has been due to many different reasons; a decline in tertiary and secondary sectors, a change in social attitude towards single parent families and firms wanting flexibility in the numbers and hours of workers employed.

Many workers take part time jobs because they can not find full time work or that they need the extra money to supplement their family income. If the main male income earner is now unemployed because of the fall in primary and secondary sectors then there is pressure on the wife to get a part time job and thus contribute to, and help out with the family income. The number of single parent families has increased and it has become socially acceptable to be a single and this has caused an increase in part time job. Single parents want to work when his/her her child is in day care or in school and then return in the afternoon to pick them up and spend time with them, this demand is met by an increase in the number or part time jobs. The government has also reduced the benefits for single parents, most of whom are usually female, and this has lead to women demanding part time jobs.

The percentage of men working in part time jobs increased by 88.7% from 1987 to 1997, increasing from 684,000 to 1,211,000. The percentage of women workers grew by 14.3% during the same period of time. In percentage terms the amount of male part time worker grew greater than the percentage of female part time workers, but in obsolete terms the number of part time female workers was far greater than part time male workers. The number of part time female workers grew from 4,584,000 to 5,238,000, it grew by 654,000 and this compared to the 607,000 part time male workers shows that female part time workers grew by a greater number.

Firms now want flexible working hours and part time workers provide this. Firms want to match employment hours with times of peak business, they hire the extra people when they have large amounts of business and then at times of small amount of business they would not require as many workers. By doing this firms reduce labour cost and thus increase their profits.

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