{"id":267981,"date":"2020-03-05T11:31:22","date_gmt":"2020-03-05T16:31:22","guid":{"rendered":"https:\/\/policyoptions.irpp.org\/issues\/why-we-should-resist-assumptions-about-the-job-market-and-inequality\/"},"modified":"2025-10-07T22:52:00","modified_gmt":"2025-10-08T02:52:00","slug":"why-we-should-resist-assumptions-about-the-job-market-and-inequality","status":"publish","type":"issues","link":"https:\/\/policyoptions.irpp.org\/fr\/2020\/03\/why-we-should-resist-assumptions-about-the-job-market-and-inequality\/","title":{"rendered":"Why we should resist assumptions about the job market and inequality"},"content":{"rendered":"

Incomes in Britain \u2014 as in many countries around the world \u2014 have suffered hugely<\/a> in the decade following the financial crisis. It\u2019s therefore clear that Britain\u2019s jobs market, as the main source of income for most households, has room for improvement. But simplistic and wrong-headed descriptions of its problems abound, meaning it\u2019s far too easy for policy-makers to jump to the wrong conclusions.<\/p>\n

First, with public concern about inequality<\/a> at a 21-year high in Britain, many assume that inequality has shot up. But the inequality of household incomes has been broadly flat for nearly four decades, since the 1980s, while hourly wages<\/a> have actually become less<\/em> unequal in the past two decades, thanks to the introduction and ramping up of the minimum wage. Certainly, the level of inequality<\/a> remains too high; it is as high now as it was at the end of the 1980s, a period of very sharp increases. But we mustn\u2019t let rising concern about inequality \u2014 probably because anemic growth for everyone has made us think more about how that growth is shared \u2014 lead us to the wrong conclusions about actual rises.<\/p>\n

The second wrong conclusion is related to the first. It is the assumption that even if inequality between low and high earners hasn\u2019t grown, too many people in certain demographic groups or living in certain parts of the country are excluded from the labour market altogether. In fact, Britain\u2019s remarkably strong employment growth in recent years has closed employment gaps<\/a> for those with the lowest qualifications, people with disabilities and those in the lowest-employment subregions. The gender pay gap<\/a> continues to narrow. And educational attainment<\/a> has risen fastest for ethnic-minority women. That\u2019s not to deny that large gaps remain, but opportunities to participate are growing.<\/p>\n

The third wrong conclusion, in relation to the UK, is that some combination of industrial change, globalization, technological advancements and taxation must have led to a rising share of national income going to the owners of capital in the form of profits. By contrast, the share going to labour, in wages and salaries, must have declined. A falling \u201clabour share\u201d would imply that even if inequality among <\/em>workers hasn\u2019t changed in recent decades, inequality between <\/em>workers and capitalists has grown. But while this is a good description of many advanced economies, it doesn\u2019t seem to fit with the data, which show that the labour share <\/a>has held up since 1980 \u2014 in both the UK and Canada. In other words, it would be wrong to claim that workers as a whole are getting a shrinking slice of the pie.<\/p>\n

But all this myth-busting good news mustn\u2019t lead to complacency. The most obvious counterpoint is that the big-picture backdrop to all this is extremely weak pay growth<\/a> over the past decade. To some extent, this has been the flip side of extremely strong employment performance, but more fundamentally it reflects woeful productivity.<\/p>\n

\"\"<\/a>
Shutterstock\/By r.nagy<\/figcaption><\/figure>\n

Beyond weak pay growth, there are a number of headwinds pushing against the reasonably positive story told above. For example, while gaps in hourly pay rates have narrowed, declines in total hours of work<\/a> for lower-paid workers in Britain mean that inequality in weekly earnings has been slower to go down. While the number of jobs has grown a lot, sharp increases in insecure and atypical employment forms<\/a> like \u201czero-hours\u201d contracts and agency work have increased precariousness for a minority. And while employment has more than recovered from the 2008-09 recession, the rate of mobility<\/a> between jobs has not. This is a concern because job-to-job moves are the best way for people to get big pay raises, are a sign of worker confidence and have wider economic benefits by quickly matching workers to the most productive firms.<\/p>\n

So while there are some positive developments in the headline numbers (except on pay), the headwinds of working time, employment security and job dynamism mean labour market developments can feel far less rosy for people in their lived experience.<\/p>\n

How should policy-makers respond? Their mantra should be that a tight jobs market with record employment is the right environment in which to do something \u2014 but they should avoid throwing the baby out with the bathwater. They must strike a balance between improvements for workers, and the risk that tighter regulation could hamper employment growth. After all, Britain\u2019s flexible labour market has served workers far better, in general, in recent years than some of the more rigid continental European systems.<\/p>\n

A wise response might include measured steps to boost employment security<\/a> \u2014 for example, through a right to a regular contract for those working regular hours on a zero-hours contract, and through minimum notice periods for shift work \u2014 rather than banning atypical forms of employment altogether. It might mean raising our ambition to push the minimum wage<\/a> to new highs, given the scant evidence to date that higher minimums damage employment, but doing so at a pace that is slow enough to pull back quickly if negative effects materialize. And it might mean expanding employment support<\/a> beyond the unemployed to workers stuck in low-skilled jobs, so that they can take up opportunities to change jobs or to train to progress.<\/p>\n

Nothing\u2019s perfect \u2014 and the British labour market certainly isn\u2019t. But ensuring that it narrows rather than widens disparities requires a thorough understanding of what has and hasn\u2019t happened to date, and a policy approach that cherishes the positives at the same time as it seeks to do better.<\/p>\n

This article is part of the\u00a0Ensuring inclusive prosperity when all boats aren\u2019t being lifted<\/a>\u00a0<\/span>special feature.<\/strong><\/p>\n

Photo: Shutterstock\/ By JuliusKielaitis<\/span><\/p>\n

\n

Do you have something to say about the article you just read? Be part of the\u00a0<\/em>Policy Options\u00a0discussion, and send in your own submission.\u00a0Here is a\u00a0<\/em>link<\/em><\/a>\u00a0on how to do it.\u00a0<\/em>|\u00a0Souhaitez-vous r\u00e9agir \u00e0 cet article ?\u00a0<\/em>Joignez-vous aux d\u00e9bats d\u2019<\/em>Options politiques\u00a0et soumettez-nous votre texte en suivant ces\u00a0<\/em>directives<\/em><\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Incomes in Britain \u2014 as in many countries around the world \u2014 have suffered hugely in the decade following the financial crisis. It\u2019s therefore clear that Britain\u2019s jobs market, as the main source of income for most households, has room for improvement. But simplistic and wrong-headed descriptions of its problems abound, meaning it\u2019s far too […]<\/p>\n","protected":false},"featured_media":242008,"template":"","meta":{"_acf_changed":false,"content-type":"","ep_exclude_from_search":false,"apple_news_api_created_at":"2025-10-08T02:52:03Z","apple_news_api_id":"5d49ab9b-0756-49b2-b1f5-ce6cb7bc513f","apple_news_api_modified_at":"2025-10-08T02:52:03Z","apple_news_api_revision":"AAAAAAAAAAD\/\/\/\/\/\/\/\/\/\/w==","apple_news_api_share_url":"https:\/\/apple.news\/AXUmrmwdWSbKx9c5st7xRPw","apple_news_cover_media_provider":"image","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_cover_video_id":0,"apple_news_cover_video_url":"","apple_news_cover_embedwebvideo_url":"","apple_news_is_hidden":"","apple_news_is_paid":"","apple_news_is_preview":"","apple_news_is_sponsored":"","apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"","apple_news_slug":"","apple_news_sections":[],"apple_news_suppress_video_url":false,"apple_news_use_image_component":false},"categories":[9362,9357,9372],"tags":[8529,9205,9095],"article-status":[],"irpp-category":[4277,4245,4251,4266],"section":[],"irpp-tag":[],"class_list":["post-267981","issues","type-issues","status-publish","has-post-thumbnail","hentry","category-economie","category-politiques-sociales","category-recent-stories-fr","tag-unemployment-fr","tag-emploi","tag-inegalites","irpp-category-discrimination-fr","irpp-category-economie","irpp-category-politique-sociale","irpp-category-travail"],"acf":[],"apple_news_notices":[],"yoast_head":"\nWhy we should resist assumptions about the job market and inequality<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/policyoptions.irpp.org\/fr\/2020\/03\/why-we-should-resist-assumptions-about-the-job-market-and-inequality\/\" \/>\n<meta property=\"og:locale\" content=\"fr_FR\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why we should resist assumptions about the job market and inequality\" \/>\n<meta property=\"og:description\" content=\"Incomes in Britain \u2014 as in many countries around the world \u2014 have suffered hugely in the decade following the financial crisis. 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