The Changing Nature of Demand for Labor in the United Kingdom

Labour Market 1
THE CHANGING NATURE OF DEMAND FOR LABOR IN THE UNITED KINGDOM
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Labour Market 2
The Changing Nature of Demand for Labor in the United Kingdom
Policy Recommendations
It is worth noting that over the past few years, the demand for workers in the United
Kingdom has been fluctuating (Cribb, Joyce, and Keiller, 2017). Mainly, this is due to changes in
the labor market. For this reason, this study sets forward various policy recommendations for the
government to implement that may help in increasing the demand for labor in the UK labour
market.
Firstly, the government should revise the market wage rate slightly downwards in order
to encourage firms within the economy to hire more workers. It is imperative to note that there
exists an inverse relationship between the demand for labour and the minimum wage rate. As
such, when the minimum salary level is high, wages expenses for firms is also high (Demand for
Labor, n.d.). In turn, they reduce their demand for labour in the market. In retrospect, a lower
market wage rate policy would reduce a company’s salary expenses significantly and, thereby,
encourage an increase in their demand for workers within the UK economy.
Additionally, the government may utilize expansionary monetary and fiscal policies to
increase the availability of resources to both firms and consumers. As such, an expansionary
monetary policy will make loans more affordable and accessible to both firms and consumers.
As a result, the level of investment and consumption of goods and services within the economy
will increase significantly (Amadeo, 2018). When demand for goods and services I the economy
rises, firms will be forced to increase their productivity and thus, will be forced to hire more