The United Kingdom has severally passed through a fall in its microeconomic performance that altered its labor market. During the eighth and ninth decade of the 20th century, the UK government suffered a period of recession that impacted the labor market leading to the rise of unemployment by less even though it later fell back rapidly. A similar occurrence of the 'great recession' also happened between the year 2008 and 2014 that ascribed to a great fall in the country's economic base and labor market. Notwithstanding the fact that at the end of 2014 there was positive growth in the economy and labor market, the previous recession had impacted UK's performance of the labor market and affected its currency as a result of fall in efficiency of production (Coulter, 2016). Among the aspects that this essay seeks to shine a light on are; UK's impacts of the fall in the labor productivity, the influence that the great recession imparted to the economics labor and salary cuts and the overall effect to the UK currency.
The great long recession that took place between 2008 and 2014 impacted the UK's performance in its macroeconomic approaches thus had to employ some pay cuts that targeted the labor market. A sharp fall in the wages is an impact that the fall in UK's labor productivity. The consequences of a continued pay cut were realized when the overall productivity in the various sectors was achieved thus causing the macroeconomics to face a significant challenge in resurfacing the matter. Lavoie and Stockhammer (2013) asserted that the great recession led to a loss in the labor market even though there was a creation of about one million jobs in private sectors. The jobs lost were more than the ones created in the private sectors thus the UK labor market is still at risk of poor productivity.
Another impact of sustained fall in the UK's labor market is the continued increase in jobs insecurity with a few well-paying full-time jobs. The nation's aspect of recovering from the effects of the recession was challenging since the labor market surge resulted in a downfall in the overall acceptance of people's requests for loans due to the fear of illegitimacy of repaying (Crafts, 2012). Consequently, the economy was at its toppling point regarding money flow in the economy regardless of the fact that the great recession helped in treating the high-level inflation that had taken place in the United Kingdom.
Labor productivity downfall resulted in the restriction of wage growth even though it did not put more pressure lowering the wages. The consequences of wage cuts resulted in poor labor with many employees in the labor market losing their jobs. Coulter (2016) attested that there was also an internal devaluation since most companies had to adjust the unit labor costs while compromising the viability of the services provided. A downfall in the labor market led to a high fluctuation of the exchange rates thus made the United Kingdom enjoy exchange rates after the recession was over. The great depression led to a deterioration of UK's GDP to as low as 5.7% percent from the 20% early in 2008. Indeed, the effect that the recession impacts to the macro-economics of UK was the deterioration of the per capita income.
Coulter, S. (2016). The UK labor market and the great recession'. Retrieved from http://eprints.lse.ac.uk/65615/1/Coulter_The%20UK%20labour%20market%20and%20the%20great%20recession.pdf
Crafts, N. (2012). British relative economic decline revisited: The role of competition. Explorations in Economic History, 49(1), 17-29.
Lavoie, M., & Stockhammer, E. (2013). Wage-led growth: Concept, theories, and policies. In Wage-led Growth (pp. 13-39). Palgrave Macmillan, London.
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