Analyse des marchés

Chapter 1 - The labor markets

Part 1: The workforce

Text du fascicule
- Net-adjusted disposable income: paying taxes and contribution, higher than the
OECD average.
- Employment: 75% have a paid job (higher than OECD average). Very high
employment rate even for women, but poor working conditions for a significant part
of them. Earn not enough money for daily life.
- Unemployment rate: 4%
- Education: 82% of adults 25-64 have completed upper secondary education, but 45%
higher education. Quality of education is very important.
- Life expectancy: 81 years (good life/health conditions), in some places, 60-65 years.
- Over the previous decades, life expectancy ceased to increase.
- Young people: 17%
- Old/ aged people: 17%
- More than 80% live in urban areas:

- London (always been the largest city in the UK, trade within the country thanks to the
Thames and with other countries)

- Major cities developed thanks to the industrial revolution (18th and 19th centuries. It used
to be a rural country based on agriculture. There were some basic industrial activities but at
home using basic tools to supplement their incomes. At the beginning of the 18th century.
New machines appeared much more powerful, much larger as well and they had to be used
in large factories. Most of these machines used the steam engine so they had to be located
next to coal pits. Workers left the countryside and moved in order to work in these factories
and cities around these factories. Cities were built next to coal mines in what came to be
known as the north of Britain: central Scotland, the N of England, NE of England, NW of
England (Manchester, Sheffield), the W Midlands and finally the south of Wales (Cardiff) (cf
carte Moodle).

- Cities developed and expended in the N very quickly in the 18th and 19th century and
became very wealthy. In the second half of the 20th, Britain’s manufacturing industries
declined, so cities developed mostly in the S. There was a gap btw the S and the N of the
country that has increased over the previous 50 years. Most people still live in large urban
areas but these are now poorer than in the past except London.
Part 2: Immigration

Immigration into the UK increased after WW2. As British colonies became independent. Until
then, most immigrants came from Ireland, which used to be a part of the UK until 1921, but
was very poor (economy based on agriculture). Ireland didn’t benefit from the industrial
revolution.

Many Irish people left the country in particular to go to Britain and work in British factories.
After WW2, British colonies gradually became independent beginning with India (2 separate
states: with Pakistan (Hindus and Muslim)). Individuals from this newly independent state
were allowed to move without restrictions. Then the West Indies became independent and
many of their nationals moved to Britain. They were welcomed in England, there was a
shortage of labor. They were allowed to work, full access to public services (school, hospital).
But in the 1960’s, when Britain experienced economic difficulties, the first restriction of
entry was introduced for individuals from former colonies. But at the same time, there were
pieces of legislation passed to prohibit discrimination against them and to make them easier
to integrate British society. Discrimination was prohibited in particular as far as work and
housing were concerned.

In addition, British authorities during 10 years decided to introduce questions about ethnic
identity in the census. The main options available from the 1990’s have been “white”,
“Asians” with many subdivisions (Indian, Bangladeshi, Pakistani). The 2 main subdivisions
have been black African and black Caribbean. The census had plenty of other questions
about education, housing, and employment.

They collected a lot of information about ethnic minorities in Britain, so they were able to
have statistics. 40% of the pop regarded themselves as nonwhite.
In the 21st century, there are still immigrants from the former colonies as well as immigrants
from all over the world looking for a job. They need to apply for a visa, and British authorities
will assess the income they can expect in Britain. They are able to choose the kind of people
that are applying for a job. Skilled or unskilled people are needed.
Since the beginning of the 21st century, there has been an increasing number of asylum
seekers, when they suffered from prejudices, discrimination... But they have to prove it and
if they succeed, they become refugees and they have the right to live but not to work while
the application is processed. They received benefit from the govt as they are not allowed to
work.

Finally, with Brexit, there were Billions of individuals that had immigrated from European
countries without any restrictions within the single market. all European have the right to
live and work in the member state without restrictions; Britain became very popular for
these immigrants after the enlargement of the EU. In 2003, 8 countries included from central
Europe with living standards lower than those in the UK. They were prepared to accept any
jobs as skilled jobs in the public center but also unskilled jobs in agriculture or in restaurant.
The 2008 crisis broke out. It was first a financial crisis but then turned into an economic crisis
and migrants from the EU were increasingly regarded as scapegoats that were blamed for
Britain’s economic difficulties. A very small party without any representative in the
parliament
argued that since Britain was forced to accept all immigrants from the EU because of the
single market, then Britain had to leave the EU in order to leave the single market.
At the time there was a conservative govt, the prime minister David Cameron was subjected
to increasing pressure. He wanted Britain to remain in EU but he promised that he would
organize a referendum on the European. He was convinced that the British would vote in
favor for the EU, that the latter would be settled. Meanwhile, he also promised that he
would cut net migration (diff between immigration and migration), less than 100 000 people.
At the time, net migration was about 300 000 people. He promised to cut it.
He tried to reduce immigration from the rest of the world by making it more difficult for
people of the rest of the world, to welcome their family, there would be next assessment:
people had to speak English, their income of the household was taken into account. Despite
of these new restrictions, net migration never decreased, people was a popular country.

So, the referendum for Brexit was eventually held in June 2016. The campaign was based on
immigration. Brexit would enable Britain to choose immigrants anywhere in the world. To
custom economic growth for Britain, they found it very difficult to defend free immigration
from the EU. 52% of the British voted for Brexit.

They came to Britain to work, very few claimed benefits less than 20%. When they lost their
jobs and couldn’t find another one, many of them left Britain and come back to their home
countries. The livers argued that thanks to Brexit EU nationals will no longer be automatically
be allowed to live and work in the UK, so the British gov could choose immigrants anywhere
in the world depending on the news of the British economy. Under the agreement sign
between the European union and British government, Eu nationals who lives before the
Brexit are allowed to stay. Some of them have to decide to leave the UK because they no
longer felt welcome. As result the shortage of labor became even worse but the British gov is
still committed cutting net migration to below 100 000. In 2016 net migration was about 300
000. Nowadays the latest figure 2023 more than 600 000. Instead of being reduced net
migration has increased. Those of migrates to the UK come from different parts of the world.
Especially former colonies like Pakistan, India or Nigeria because of the shortage of labor but
many of them also come as students.

The current prime minister, conservative, called Rishi Sunak, his grandparents immigrated
from India, his parents moved at the social ladder quickly, they became doctors in the UK.
Rishi before becoming a politician, he used to work in the financial sector, he is a wealthy
man married to a billionaire in India. He has been leading policies that are very restrictive.
The gov has decided to raise the income but an immigrant can except to be allowed to work
in the UK. The expected income £38 000. Many business and public services claims that they
need labor.

The British economy needs workers but that cannot expect to earn the £38 000. Asylum
seekers are not numerous, about 80 000, the gov is focused on them, they must to come in
the UK, illegally, to claim asylum and they are not allowed to work. In order to detour them,
the gov has decided that when they arrive in the UK they should be taken in Rwanda (Africa)
to wait until the application is processed. But recently declared unlawful by the supreme
court because Rwanda would not offer the same guarantees which would break national
obligations of the UK. Businesses need labor but the gov still say that the immigration needs
to be cut

- To surge
There was a surge in net migration for non-nationals that is immigrants
- To skyrocket

- Britain left the European union in 2020 in Britain left the single market in 2021, Eu
nationals could still come and work.
- 2004: Enlargement of the Eu to include 8 countries from central
- Millions of people immigrated to the UK from Central Europe emigrated to Britain,
peaked in 2016 before decreasing.
- There was a collapse in net migration for EU nationals from as a result of Brexit of the
referendum.
- Eu nationals accounted for 29% of immigrants in the UK in 2019.
- Non-Eu nationals accounted for 60% of immigrants in the UK in 2019.
- Immigrants of non-EU immigrants was twice as high as that of Eu-Immigrants.
- As a result of the British referendum the immigration from the rest of the world
became higher than from the EU.

- The overall trend is upward

- Increasing numbers of individuals
- British universities have become increasingly attractive even though they charge high
tuition fees, so studying has become the main reason to come the UK.
Part 3 - Labor regulation

During economic crisis of 2008, unemployment peaked of 8%. So, unemployment is officially
low. But first, this is based on the definition of unemployment. All individuals who are
jobless are not officially regarded as unemployed. So, in fact in Britain the inactivity rate is
much higher than the unemployment rate, the international labor organization defined
unemployment as “the situation of a person without any work, which hasn’t work for the
past two weeks and a person who is available to work”. But the British authorizes have their
own definition, the job seekers allowance and jobless individuals have to meet very strict
conditions, indeed they have to attend their local job center twice a month and they have to
report their job seeking activates what they have been doing they have to give details, if
they do not make such report, they are not allowed to claim benefit. If they miss one
appointment their benefits would be cut for a few weeks, months then they will lose it.
The proportion of individuals officially regarded as unemployed is lower than the proportion
of individuals who are actually jobless.

The definition of unemployment changes quit often and all the details make a difference.
Individuals have to manage on their own to get a support and often works with private
companies. Supposed to help individuals to find a job, and when they succeed, they get
money from the gov. They tend to be more helpful with individuals who are skilled, those
are mostly likely to find a job. the vast majority of adults in the UK work but under different
status. As for wages, there is a minimum wage, abolished in the 90’s and restored under the
labor gov in the 21 centuries. This minimum wage remains quite low. Organizations that
work with poor people keep saying it’s far too low, lower as the living wage, enable the
individual to buy food or housing. Moreover, they are different level depending on the gage
of the person, so for an adult over 23, nowadays is about £10 for hour but for young people,
between 18 and 20 it is £7 and only £5 for 16 and 17.

The unemployment benefits are the same for everyone and are not related to previous
wages, at £84 per week. The average wage is about £700 per week. Unemployment benefits
are low because the government wants jobless individuals to actively seek employment
since the benefits are low, and individuals must report twice a month to a job center.
During the pandemic, when individuals have to stay at home, the government created
something that didn't exist in the UK: "furlough," so individuals who can't work will still
receive money. The official employment rate is low, but many individuals who work cannot
earn enough money. About 10 million individuals work part-time, but many of them would
like to work full-time. So, there is under-employment for some people.
When Britain was part of the EU, part-time individuals benefited from the same rights as full-
time workers, such as paid holidays.

Many individuals are self-employed, and in many cases, they are forced to be self-
employed. Often, they work for the same person, sometimes their former employer who
dismissed them. However, because they are self-employed, they don't get paid holidays or
benefits, and most of the time, there is no opportunity for promotion, so there is no career
progression.
Zero-hours contracts are work contracts, so those on such contracts cannot claim jobless
benefits, even though they are often jobless because the contract does not guarantee any
work hours. When a person doesn't work, they don't earn anything. They have to be
available any day and any time. They receive text messages from their employers to work for
them. There are 1.5 million individuals on such contracts, including unskilled or skilled
workers. Even some university lecturers may be on those contracts, and they don't earn
enough money.

It is very easy in the UK to be dismissed. When an individual wants to claim that their
dismissal was unfair, things will be difficult for them. Conciliation services represent
employees and employers, but if conciliation fails, they may take their case to a tribunal, and
they have to pay a fee for the tribunal, which can be quite high, up to £1,000. It's hard for
low-wage individuals to pay, even if the judge rules in their favor, as all benefits may be
deducted from the money they receive.
Some employers may dismiss employees and rehire them for the same job but at lower
wages. This is called "fire and rehire."

Trade unions were very powerful in the 1960s and 1970s; their members accounted for 50%
of the workforce. They were powerful and able to paralyze the economy. Trade unions were
based on trades (sectors of the economy), with a trade union for many industries. Most
employees working in the same industries were supposed to join their local trade union,
called a "Closed Shop."
All trade unions might support each other by going on strike, a practice called "Secondary
Picketing." Trade unions disrupted the free play of market forces, so they had to be
weakened. Margaret Thatcher acted step by step and succeeded. She prohibited the Closed
Shop and secondary picketing and decided that before a strike, there would have to be a
vote with very strict conditions.

She also decided that before any strike, all members of trade unions would have to vote,
with very strict conditions to be met for this vote. Otherwise, the strike might be regarded as
unlawful, and the trade unions would have to pay damages. Thatcher also benefited from a
major shift in the economy. The manufacturing industry collapsed, and services developed.
Manufacturing industries were very large factories with very high rates of trade union
membership. The new service industries had much lower trade union membership.

Joining a trade union was no longer popular by the end of the 1990s. Trade union
membership collapsed to about one-third of the workforce. The total number of working
days lost due to strikes also collapsed. From 1973 to 1978, this number peaked at about 13
million working days. By the end of the 1990s, this number was below one million.
After the Conservative government went further under David Cameron, stricter conditions
were imposed before strikes. For the vote to be valid, at least 15% have to participate. In
recent years, there have been very few strikes.

But when inflation exceeded 10%, the British usually said "double-digit figures," workers in
many industries demanded higher wages. They went on strike in public services like health,
education, and transport, but the government refused to grant higher wages because it did
not want to fuel inflation. Instead, the government passed another piece of legislation to
impose minimum service during a strike. The employer would define what is minimum
service in their field, and then the trade union's workers would have to work.

Most of these decisions were made under Conservative governments since the 1980s. But
the Labor Party, which was created by trade unions in 1900, remained close to trade unions.
Labor didn't abolish the Conservative legislation when it was in power from 1997 to 2010
because Thatcher had succeeded in changing the dominant opinion about trade unions.
Also, she had succeeded in posing the idea of a flexible labor market to make it easy to
create jobs or dismiss employees.

The Labor government under Tony Blair didn't restore the former power of trade unions.
The Labor government made it easier for trade unions to be recognized in local workplaces,
but Labor didn't reform. The Labor government restored the minimum wage that had been
abolished and also signed the social regulation providing guarantees for part-time workers,
imposing written contracts. There will be an election this year, and Labor is expected to win.
The key word is flexibility.

Employers usually particularly traditions linked to their religious denomination. In particular,

many employers will not organize important meetings during religious days. There is also
tolerance for any sort of religious expression in workplaces.
Sometimes, this may go quite far. There are many individuals belonging to the Sikh
community. Those who work on construction sites are supposed to wear a helmet instead of
their traditional hat, but because of this, they are not obliged to put on this helmet.

Social inequalities

After the second world war the British gov led by labor created a welfare state to reduce
inequalities and to try and abolished poverty, it was a comprehensive system meaning that
everyone was entitled to benefit from it whenever an individual could no longer work, he
would receive benefit, benefits for pregnant women for their babies, for those who were
sick disabled and pensions for old age people. This was a kind of revolution in Britain
because in the nineteenth century those who couldn’t work didn’t get any money, so many
workers were poor. From 1945, thanks to the wealth estate everyone could receive a basic
income when an individual was jobless, so same benefits for everyone but low. This welfare
state was setup after the war, a few reforms in the 60 and 70’s when Britain experienced
economic difficulties, so the gov has to save money and at the same time an increase of
unemployment. In fact, the welfare state relied on full employment because it had to be
funded by contribution and by the gov.

Some reforms had to be introduced to try to save money, but when Margaret Thatcher came
to power in 1979, she went much further because she thought that individuals should not be
dependent on government support that an individual had to work to provide for himself and
his family. She tried to save money on benefits with all the changes in the definition of
unemployment, the were also changes in the way benefits were uprating. TACHTER also
tried to encourage individual to use private services like private education, hospitals but
didn’t work, the British relied on the public health service and state education. She cut
direct taxes on individuals’ income and profits on companies because she thought that high
taxes tended to detour hard work and companies’ investments, but as her government need
money, VAT (Valued added Taxes) is unfair because not related to income and the poors are
hit by the VAT. So, inequalities increased, the poorest became poorer, richest became richer
and poverty increased by 14 to 20 %.

In 1997, labor came back to power because tony Blair realized that some of Margaret
thatcher policies were popular, he didn’t restore the welfare state as it was initially but he
increased public spending in favor of public services. The conservative came back to power
in 2010 first with David Cameron and since they have reformed the welfare state and they
have gone much further that Margret thatcher, the aim was clear, David C said that “no one
should receive more money thanks to benefits that from work” so benefits have to be lower
than the minimum wage. So, the idea was to merge 6 existing benefits into a single universal
credit, that was caped (limited).

Unlike the welfare state, created in post war years, the welfare was based on needs the
reformed introduces by DC meant individuals who had many needs (disabled…), would have
their benefits kept, as a result many individuals became poor, they lost money and became
overnight poor and no longer provide. They have to turn to food banks. The universal credit
was kept but the gov made it more difficult to claim benefits, they would have to be
individual assessment. The worst-case disabled individuals are interviewed by a person who
is a doctor and works for a private company on behalf of the gov and obviously the aim is to
conclude that the disabled person is fit for work even for a permanent disability. As the
person is fit for work, he loses the disability benefits and he has to seek for a job (through
the system).

Many decisions made by the contractors under this system were brought to court in majority
of cases, judges turn the decisions but going to court cost so only some disabled went to
court. Another form was brought of Theresa may (prime minister, July 2016) In order to save
money; child benefits would be limited to 2 children, so a great number of families became
poor. Nowadays a reason why a woman can claim child benefits for a third is in case of rape.
When people have to remain at home because of covid, the gov raised universal credit by
20£ a week, nevertheless it was abolished after the covid crisis and overnight thousands of
people became poor as well.
Nowadays, people are poor because of wages but in addition benefits are too low as results
of recent reform. Taxes have been cut especially on the wealthiest, the rising inequalities
have had a greater impact in the north of the country.

Regional inequalities

The north is the regions that used to benefits from the industrial revolution to the south of
waled to central Scotland. These regions have lower GDP per head except Scotland, they
have a higher unemployment rate that exceed 5%. They still have higher proportions of jobs
in manufacturing industries. There is a real contrast between the north and the south,
The south east and London has become very wealthiest part of the UK, with high GDP per
head and the Scotland is now close to British average, Wales, Northern Ireland, north east,
north west of England and Yorkshire remain much poorer. It appeared in the 1920 30’s with
Britain manufactured declined most of them located in the north but all British gov led by
labor all by conservative led by regional policies that aim at attracting private companies to
create jobs in the north. By the 70’s all regions in the north were regarded as areas that
could apply for these regional policies. in addition, Scotland and Wales that had they own
minister in the British gov benefited by development agencies that aimed at encouraging to
invest in Scotland and Wales. They were quite successful, in the late 80’s about half of
personal computers that were sold in western Europe were manufactured in central
Scotland. Thatcher led different policies, she refused to support ailing companies, so
according to her when a company non profitable had to close down.

Nevertheless, they were major and growing difficulties in the north, the gov could not give
money to private companies so the introduced another policy; private company could apply
for tax relief when they invested in few enterprises zone in areas in large manufacturing
companies had close down. The labor party 1997 decentralized power, the gov introduced
devolution, so Scotland Wales and Northern Ireland had their own assembly and gov to deal
with some fields such as public services, education, health, housing, agriculture and
economic development.

In 2016 the Scottish parliament also gain power over some taxes and benefits. All other
affairs were still conducted by British gov such as most taxes, benefits and immigration.
England is still entirely run by the British go and parliament. Tony blare created, regional
development agencies for different regions of the north of England, to help them attract
private investors. Since 2010 the conservative gov have decided that some large English
cities part of the economic north should become more powerful to try and attract
investments, in particular Manchester and Birmingham. Since the referendum of Brexit as
the regions in the economic north lost Europeans subsidies may receive money in particular
from industrials decline, received money for infrastructure but such policies ended with
Brexit, but still suffered so the British gov replaced with a program called “levelling up”, to
encourage mixing public and private money so investments for innovation but also
transport.

Britain was a pioneer for railways but nowadays doesn’t have high speed lines (expect
Eurostar) which deter potential investors. The idea is to replace European funds but most
complain because of the amount of money given by the gov is much lower. Another policy
conducted since Brexit is the creation of freeports, they are twelve areas must of them ports
11, Britain (Brexit) can conduct its own trade policies so the idea is to have places with very
regulations, very few taxes, no custom duties or low, so it is to create hubs for investors to
invest easily. Labor regulations might also become even more flexible to attract investors.

Scottish parliament and gov benefit from autonomy. Scotland is run by SNP (Scottish
parliament party) committed to create a new state, this party is center-left and quite open to
immigration, the independent Scotland would be open to anyone. Committed to
redistribution but it has limited powers over taxes and benefit. Nevertheless, the Scottish
gov has decided that people on the poorest in income should pay lower taxes, and the
highest incomes should pay higher income tax than in England. But SNP can’t go too far
because Scotland and England are part in the same state otherwise the highest income
might leave Scotland to pay lower taxes. The average annual wage is 28 000£, every person
that learns more in Scotland pays more taxes than in England. It’s to lead policies that are
more distributive and the Scottish parliament leave some benefits, the have decided to
increase benefits: no assessment for individuals with permanent disability also trying to
increase the take up rate and the gov has decided that child benefits would not be limited,
and the Scottish gov created the Scottish child payment, 20£ a week. This new benefit is
regarded as the main reason that child poverty is way lower in Scotland than in England.

The Scottish very few powers over labor regulation, all employees for public authorities in
Scotland have to get at least a minimum wage higher than in England. The Scottish gov is
trying to provide help to jobless, in England private operators (profits for them), in Scotland
public and charities help, and no fee on people who are trying to prove that they have been
unfairly dismissed.

Immigration is reserved to British gov and parliament but the Scottish gov has always made
it clear that immigrants are welcomed in Scotland, so they would like immigration to
increase, would like asylum seekers to be able to work as soon as they arrive, they are
critical about the current policy to deport to Rwanda the asylum seekers. All political parties
didn’t Scotland to leave the EU and the single market because the wanted to continue to
benefit from the free movement from the people. So, Scotland is powerless against
immigration but they can provide support for housing education …, still trying to be helpful
to people that want to integrate Scotland. The first minister, leader of SNP is called Humza
Yousad, his parents immigrated for Pakistan. So nowadays the first minister of Scotland AND
prime minister of England have an Asian decent but have different discourses on
immigration.

- Relative poverty is less 16% of the median income for the whole population.
- Child poverty 27% in the UK because the reduction of caps of benefits
- 20% adults are in poverty because many wages are low
- Receiving benefits no longer protects because they are too low
- In Scotland child poverty is lower about 22%

-
- London Is Richer
- The north and the south divided
- Regions in north of UK have lower propositions of immigrants because its poorer on
average.
-

- Oil is mostly located in the Scottish side, was discovered in the late 60’s, brattish gov
grant licensed to private operators so they to pay additional tax
- Taxes to 70% of their profits to profitable for British state
- Oil in the north seas have declined and all revenues have declined but last year a
surge because of the war in Ukraine
- Production has been declining since 1999