Labour Market Economics - Notes and Resources from the Livestream

The UK labour market is undergoing significant changes, with trends such as youth unemployment, trade union membership, minimum wage increases, and economic inactivity shaping the workforce. These developments have far-reaching implications for workers, businesses, and the broader economy. Whether you're an A-level student revising for exams or a teacher looking for resources, our PowerPoint slides are available as a free download to aid your learning and teaching.

Key Issues in the UK Labour Market

1. Youth Unemployment

Youth unemployment remains a persistent challenge in the UK. Many young people struggle to secure stable employment due to a lack of experience and skills mismatches. Addressing this issue requires targeted policies, including apprenticeship programs and vocational training.

2. The Rise and Fall of Trade Unions

Trade union membership has been in decline for decades. In 2024, only 23% of UK workers were part of a union, compared to 33% in 1995. This decline has weakened collective bargaining power, making it harder for workers to negotiate better wages and conditions.

Key Roles of Trade Unions:

• Collective Bargaining: Negotiating for better pay and working conditions.
• Legal Representation: Supporting workers in cases of disputes or unfair dismissal.

3. Minimum Wage and Low Pay

In April 2024, 15.7% of UK jobs were paid below the Real Living Wage. However, the National Minimum Wage (NMW) continues to rise, increasing from £11.44 per hour in 2024 to £12.21 in April 2025 for workers aged 21 and over. While this is a positive step, concerns remain about inflation and the affordability of wage hikes for small businesses.

4. Economic Inactivity: Who’s Missing from the Workforce?

Over 9.3 million people aged 16-64 in the UK were economically inactive by December 2024. The most common reasons include:

• Health and Disability: Many individuals cannot work due to long-term illness.
• Caring Responsibilities: Parents, especially mothers, often leave the workforce to care for children or elderly relatives.

Potential Policies to Reduce Inactivity:

• Affordable Childcare: Increasing subsidies for childcare to help parents return to work.
• Support for Older Workers: Encouraging skill retraining programs and flexible work options for older employees.

5. The Role of International Students

The UK remains a popular destination for international students, with 758,855 overseas students enrolled in 2023. They contribute significantly to the economy, but their presence also poses challenges.

Benefits of International Students:

• Boosting Higher Education Revenue: Tuition fees from international students support university funding.
• Filling Skill Gaps: Many stay in the UK post-graduation, helping address workforce shortages.

Challenges of High Student Migration:

• Housing and Public Service Strain: Increased demand for accommodation and services in university cities.
• Overreliance on International Tuition Fees: UK universities risk financial instability if international student numbers decline.

Conclusion

Understanding labour market trends is crucial for policymakers, businesses, and students alike. From minimum wage policies to the future of trade unions, these issues shape economic opportunities and challenges. For those studying A-level Economics, our free downloadable PowerPoint slides provide additional insights and resources for revision and classroom discussions.

Glossary of Key Terms

• Aggregate Demand: The total spending on goods and services in an economy.
• Collective Bargaining: The process where trade unions negotiate wages and conditions with employers.
• Economic Inactivity: People who are not in work and not actively seeking employment.
• Monopsony Power: When a single employer has significant control over hiring and wages in a labour market.
• Real Living Wage: A voluntary wage benchmark set higher than the statutory minimum to reflect the actual cost of living.
• Trade Union Density: The proportion of workers who are members of a trade union.
• Zero-Hour Contracts: Employment agreements where workers have no guaranteed hours of work.

For students and teachers, download our free PowerPoint slides to explore these topics in greater depth!