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According to the latest statistical data, the number of people who are employed in the UK has increased rapidly over the past few months while unemployment remains unchanged. A majority of people is still without jobs and the rate remains at 4%, which is the lowest since 1975. The economy is facing a number of hurdles in sectors such as transportation and manufacturing but despite all these problems, the job market is resilient enough to deliver a record of high employment levels.
While people are still taking Short Term Loans For Unemployed because of the low-interest and in order to pay their monthly bills, the weekly average earnings of those who are employed have also increased considerably. Even though the Government is celebrating this new record, it is also true that the unemployment rate has stooped lower, leaving Economists and financial experts in a state of turmoil. They have warned that even though the current conditions might seem perfect, they would not remain the same for a very long time. It is said that the effect of Brexit might begin to slow down the growth of employment within the next few months. The job market is still standing strong and sturdy despite the slow growth of the economy in the previous months. As it is determined by recent trends, a large number of those who found jobs were actually those who were previously not working, for example, students or those who were the sole earning members. There is still a huge demand for labour, which is continuing to increase and encourage wage growth. Real wages have increased significantly over the past years, even though they lag behind when it comes to comparison with the data from the crisis. Is Low Productivity tampering with Wage Growth? The productivity of the country has slowed down in comparison. The slow progress indicates the fact that this area could tamper with the growth of wages in the long run. The shortage of skilled workers also adds to this data. Since businesses choose to invest the most minimum and nominal amounts when it comes to training employees, this becomes another factor, which influences the low productivity of workers. Since there is an oversupply of workers, businesses used to pay the lowest wages but because of the increment in the demand for skilled workers, these wages are driving up slowly. Finding the right employees is becoming difficult because of the lack of skilled workers. This has led to a record level rise in the number of job vacancies. This has led to workers being more successful in bagging above-inflation increases in their wages. There is a lack of investment in the UK. Imagine that the supply of labour is elastic and very versatile, almost indicating an oversupply of labour. But there are only a finite number of jobs in the market. If there were only a few workers looking for jobs, there would be positive pressure on the wage growth, which would help it rise, but since there are so many workers, there is a negative pressure, which suppresses it. Wages also help people to determine whether they would pursue higher education or make themselves available for work without being skilled enough. Now, since the UK has a big job market, there should be more opportunities for jobs. Another reason is that individuals are focusing more on their own consumption rather than looking for new opportunities to grow that money. In fact, a majority of citizens are actually building a debt trap for themselves. Since there is a lack of savings and a lot of spending, this limits the amount of cash, which is available for investment purposes. The private sector, on the other hand, is saving all its cash rather than looking forward to creating more job opportunities. Because of the lack of investment in hiring new employees, there is a lack of productivity. Despite the interest rates for loans being so low, there is underinvestment on all sorts of levels. Money is available in abundance but the lack of investment has been adding to the slow wage growth and low productivity of the country. Overall, it is very hard to ascertain where the economy might be headed. A change in the organisational structure might help to overcome the problem of the lack of productivity and have a noteworthy impact on the economy.
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