The UK labour market is an abstract concept and not a single, unitary labour market. Discuss …


The United Kingdom’s labour market as a single, unitary labour market is an abstract concept, but, if you accept that it is not then it is possible to write an article like this one by Torsten Bell, an ex Treasury civil servant and, currently, the Chief Executive of the Resolution Foundation.

The problem is that employers and jobseekers do not exist in that abstract concept. The UK labour market is composed of myriad, overlapping labour markets defined by occupation, industry sector, geography …

It is a messy world out there beyond the walls of Her Majesty’s Treasury and sundry think tanks. And there is, dear reader, precious little order in the chaos, seen from where most of us see the world of business and work, up close and personal.

Let me try and illustrate what I mean.

Let us take two people in Plymouth, both in secure employment, well qualified and experienced, but looking to move on to another job in the same line of work.

The one is a part time carer and the other a type flight surgeon with no commitments.

The geographical labour market for the carer is Plymouth and its immediate environs whilst that for the surgeon may extend as far as anywhere in the world where their skills will be welcome.

Now, imagine all the people in work in the UK and looking for work lumped together. That is what folk are talking about when they speak of the UK labour market.

I am reminded of chaps in the City who used to appear on the BBC News after a torrid day on the Stock Exchange, talking about the activity being a necessary correction.

The stock market on a daily basis is made up of numerous trades of stocks and shares, almost all pre-owned by the way.

Who was making this correction and why was it necessary?

Order must be asserted to exist in chaos or else one’s remuneration might go down. Whatever you do, do not let the punters know that X shares may have shot through the roof on Friday afternoon, because Jocasta got a good feeling about the company after an excellent lunch and in anticipation of a ripping good weekend.

They might start wondering, if they would be better off toddling off to Le Touquet and putting it all on black 10.

The UK labour market as an aggregation of all the labour markets within the UK is a nonsense for practical purposes.

As a consequence of taking that view, one may challenge Bell’s assertion that firms are finding it impossible to hire staff.

And recruiting the right person for a job takes a lot longer than taking someone’s order; making them a meal and washing up afterwards.

It is perfectly possible for employers to be hiring staff whilst others are finding it virtually impossible to fill their vacancies. The two statements are not mutually exclusive.

Most employers, by and large, are not good at recruitment, because it is a task they rarely undertake. The larger the employer, however, the more likely they are to have access to professional help in house or at least the resources to buy it in from a reputable company.

Let us look at the issue from another angle.

89.6% of all companies in the UK employ nine staff or fewer.

If you normally employ nine and you have a vacancy that is proving hard to fill then you are short 11% of your work force. Should that situation persist you may lose revenue and possibly run the risk of going out of business.

Harold Wilson once said that to the unemployed person, unemployment is 100%.

There is a chance that the vacancy may disappear, but not because it has been filled. An employer may take stock of the situation and decide that Fred who retired from the full time job was coasting just before retirement.

May be he does not need replacing, if you divide the job up amongst the existing work force or, perhaps, you only need some one part time, may be even only now and then.

This is a very thorough piece of work establishing the labour availability issues of the UK Food and Drink Sector and it very much emphasises the point of this post.

One of the problems with discussing the UK’s labour market and its sub markets is a paucity of data.

Back in the day, when Jobcentres had a role in bringing jobseekers, employed, unemployed and the economically inactive, together with employers the Office of National Statistics had access to information about around 40% of the jobs being advertised at any one time alongside that obtainable from employment agencies and other similar sources.

The last Jobcentre data that ONS accepted on jobs notified to Jobcentres was back in November 2012.

The job data supplied by employment agencies has to be considered in the light of the fact that they are profit making companies. The same goes for the press releases that get agency representatives beaming out of your TV during a breakfast time show.

They have a vested interest in presenting their business, if not their industry in a good light.

One was aware (and I am sure they do not do it today) of agencies advertising honeypot vacancies to draw in job applicants to add to their registers. The size and quality of which they then cite to employers as to why they should place their business with them.

I had more than one conversation with a jobseeker saying that the too good to be true job had always just gone when they rang up, but the agency would be happy to add them to their books.

To confuse matters more, employers may advertise a permanent job with more than one agency. It has not been unknown for agencies to advertise a client’s vacancy through the employer’s local Jobcentre, but not in the employer’s name and for them to advertise the job in the media in the employer’s name, but with the contact details of the agency.

One vacancy might be advertised in three distinct locations.

All very confusing.

Jobcentre staff used to hate being used by the agencies. They got paid for our work and rarely did employers tumble to the fact that they were paying the agency to act as an intermediary.

And, if we worked out for which employer an agency was acting we were under strict instructions to not let the employer know what was happening.

Before 1997, we were even told not to point out that our service was freeish to employers when canvassing for vacancies. We were in competition with the employment agencies for business.

New Labour, boo, hiss, said we might say to employers that it was free at the point of delivery. You are paying for it through your taxes.

One euphemism for redundancies that has been in vogue for a while is downsizing. One assumes that an industry that needs to shrink is one that needs to lose workers and, perhaps, even businesses?

Of course, the people being made unemployed may not be in the right place, geographically, and, if they are possess the right mix of skills and experience for employers seeking new employees in Bell’s expanding industries.

The article is behind a pay wall and I have thus only seen the screen grabs, but none of them contain the B word.

The end of Freedom of Movement has seen a reduction in migrant labour from the European Union that is making it harder for some employers in some sectors of the economy to fill vacancies (and retain staff).

Fewer migrants in the UK means fewer customers for UK based businesses. Is anyone seriously trying to work out what that will mean for the UK economy in the coming months?

Fewer migrants in the UK means fewer business owners in the UK and potential owners of businesses, put up for sale by UK citizens.

And fewer migrant truck drivers either living and working here or living elsewhere and passing through poses a serious risk to economic recovery.

It is interesting that some of the experts are dubious about the importance of cabotage to UK haulage either out of ignorance or, may be, the fear of facing up to the reality of cold hard facts?

Perhaps the most amusing aspect of Torsten Bell’s article is its title, “Covid could still make a mockery of the best-laid economic plans“.

Boris Johnson and planning are mutually exclusive.


3 thoughts on “The UK labour market is an abstract concept and not a single, unitary labour market. Discuss …

  1. Interesting that the report you link to (labour availability issues of the UK Food and Drink sector) doesn’t actually mention the “B” word in its executive summary but coyly states “the EU exit and resultant immigration policy has created significant uncertainty for many European
    workers in the sector around their future rights to live and work in the UK”


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