Contemporary Trends in the Labour Market: A Comparative Analysis of UK and Australia

This paper provides an analysis of the contemporary trends in the labour market by comparing them in the contexts of the United Kingdom (UK) and Australia. The first section provides a comparative analysis of the contemporary labour market trends of the above-mentioned countries. The second section uses Stephen Taylor’s model to demonstrate the significance of tight and loose labour market conditions.

Running head: THE LABOUR MARKET
THE LABOUR MARKET
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1THE LABOUR MARKET
Executive Summary
Labor market is a major factor that determines a nation’s economy. It is characterized by
various factors like wages, employment and unemployment rates, demographic and
geographic factors and others. The labor market operated within the chain of demand and
supply. This paper aims at analyzing the contemporary trends of the labor market. In order to
achieve this, the paper compares the labor market trends of the countries of UK and
Australia. The paper also demonstrates the significance and characteristics of the tight and
loose labor markets based on the model given by the economist, Stephen Taylor. In
conclusion, it can be said that the labor market trends directly affects a nation’s economy.

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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Comparative Analysis of the Contemporary Labour Market Trends.....................................3
Wage Inequality.................................................................................................................3
Differences in Public and Private Sectors..........................................................................3
Different Types of Employment Contract..........................................................................4
Geographical Labour Divide between the North and South Divisions..............................4
Economic Growth or Decline in the Professional Sectors.................................................4
Demographics.....................................................................................................................4
Significance of Tight and Loose Labour Markets..................................................................5
Conclusion..................................................................................................................................5
References..................................................................................................................................6

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Introduction
Labour market is the physical space within which employers and employees interact.
This paper provides an analysis of the contemporary trends in the labour market by
comparing them in the contexts of the United Kingdom (UK) and Australia. The first section
provides a comparative analysis of the contemporary labour market trends of the above-
mentioned countries. The second section uses Stephen Taylor’s model to demonstrate the
significance of tight and loose labour market conditions.
Discussion
Comparative Analysis of the Contemporary Labour Market Trends
Wage Inequality
The UK Annual Survey of Hours and Earnings, 2015 demonstrate that the median
weekly wage of labour as 412.50 pounds per week (Clegg 2018). Since the implementation of
policies like National Living Wage, the sectors as retail has seen a squeeze in the differentials
among lower deciles while sectors such as banking have not faced any direct effect of the
policies.
The wage inequality in Australia has considerably increased in the recent years. The
lower deciles have seen decline in the earnings per hour and this has led to the decline in the
earnings per week (Abs.gov.au. 2018).
Differences in Public and Private Sectors
Employment in the UK public sector for March 2017 was 5.424 million. However, the
private sector saw the employment go up to 26.530 million (Clegg 2018).
Studies show that only 13% of the total employed people in Australia work in the
public sector while 87% work in the private sector (Abs.gov.au. 2018).

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Different Types of Employment Contract
In UK, the full time employment rates have increased by 12.3%, self-employment has
increased by 47.6%, part-time employees have increased by 15.1% and temporary workers
have increased by 14.4% (Clegg 2018). The count of zero hour contracts have increased to
883,000 (Clegg 2018).
In Australia 59% of employees are full-time workers, 18% are casual employees and
20% are self-employed (Abs.gov.au. 2018).
Geographical Labour Divide between the North and South Divisions
Statistics show in 2017, the highest unemployment rate in UK was 6% in the North
East and the lowest was seen as 3.4% in the South East (Clegg 2018).
In Australia, the Southern states saw a rise in the average unemployment rate of 6.2%
than the northern states with the average unemployment rates of 5.9% (Abs.gov.au. 2018).
Economic Growth or Decline in the Professional Sectors
The manufacturing industry in UK has seen a fall from 30% to 12% in the real Gross
Domestic Product (GDP) share. On the other hand, the UK service sector has seen a rise in
the GDP with a rise of 80% (Clegg 2018) .
In Australia, the service industry has seen an economic growth of 60% of the GDP.
However, the manufacturing industry has seen a fall in the GDP to 6.0% (Abs.gov.au. 2018).
Demographics
Above 30% of the employees are over 50 years in UK with insufficient number of
young people for the group to be replaced (Cheung and Phillimore 2014).
In Australia, there have been an increase in the workforce and age labour between 15
years to 64 years from 0.3% to 72.4% (Wilkins 2013).

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Significance of Tight and Loose Labour Markets
Over the years, owing to economic recession and financial crisis, the labour market
has become loose from being tight. A ‘tight’ labour market is the one for the sellers and the
jobseekers. During this time, organizations face difficulty to source people due to the high
levels of national employment overall. However, a ‘loose’ market is one of the buyers and the
employers. During this time, employers find a relatively larger pool of candidates to be hired
for various job roles. Moreover, the loose market usually faces high competition for the
availability of jobs is rare increasing the unemployment levels. In this context, economist
Stephen Taylor is of the opinion that each stage has a relative significance in terms of
management, cost, and organizational performance (Taylor 2014). In a tight labour market,
like in UK, activities of recruitment gain importance since it becomes difficult to find skilled
and efficient employees. Therefore, the company has to allocate more expense and time for
acquiring efficient employees. On the other hand, a loose market sees an abundance of the
qualified and skilled employees and hence, little attention is paid to the process of
recruitment and more to the process of selection. For example, in the current loose market,
the service sector and especially in retail, though companies are cutting off jobs they are also
hiring the most (Blundell, Bozio and Laroque 2013). However, in the tight market as in UK,
there is an apparent competition among employers for qualified employees in the service
sector (Blundell, Bozio and Laroque 2013).
Conclusion
To conclude, there are many factors that influence the labour market of a nation. The
analysis and the comparison of the labour markets of UK and Australia have shown similarity
in the contexts though there are discrepancies in the data when compared in the international
context. Furthermore, the significance of the tight and loose labour markets in the
determination of an economy is also evident.

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References
Abs.gov.au. (2018). 6202.0 - Labour Force, Australia, Dec 2017. [online] Available at:
http://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0 [Accessed 9 Feb. 2018].
Blundell, R., Bozio, A. and Laroque, G., 2013. Extensive and intensive margins of labour
supply: Work and working hours in the US, the UK and France. Fiscal Studies, 34(1), pp.1-
29.
Cheung, S.Y. and Phillimore, J., 2014. Refugees, social capital, and labour market integration
in the UK. Sociology, 48(3), pp.518-536.
Clegg, R. (2018). UK labour market - Office for National Statistics. [online] Ons.gov.uk.
Available at:
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemploye
etypes/bulletins/uklabourmarket/january2018 [Accessed 9 Feb. 2018].
Taylor, S., 2014. Resourcing and talent management. Kogan Page Publishers.
Wilkins, R., 2013. Families, incomes and jobs, volume 8: a statistical report on waves 1 to 10
of the household, income and labour dynamics in Australia survey.