The mobility of labour refers to the ability of workers to change from one job to another, both geographically and occupationally. There are more than 29 million people working in the UK labour markets producing a wide range of goods and services. However, around 1.5 million are also unemployed, indicating that labour markets do not always operate efficiently.
Some of the unemployed may simply be changing jobs and so register as out of work for a short period of time. After all, an economy is dynamic and specialised, so we should expect some unemployment since jobs are continuously being created and ended. Unemployment while people search for jobs and gill them is known as frictional unemployment.
However, a more serious type of unemployment is due to a mismatch in skills and location between job seekers and job providers. This gives rise to immobility of labour and structural unemplyment.
Geographical immobility refers to the obstacles which prevent labour moving from one area to another to find work. There are several causes, such as family and social ties, the financial costs involved with moving house, imperfect market knowledge on available work, regional variations in house prices and the cost of living. The biggest problem tends to be lack of affordable housing in many parts of the UK, but especially the southeast region.
Occupational immobility refers to the obstacles which prevent labour from changing their type of occupation to find work. There are several causes, including sufficient education, training, skills, and work experience.
Government measures to increase labour mobility
There are various measures that a government might undertake to increase the geographical mobility of labour, and these include:
- Relaxation of planning laws which enable construction firms to build housing, especially in the greenbelt areas and the southeast of England.
- Increasing the construction of social housing, such as council properties and charities (housing associations). Rental costs also tend to be more affordable than mortgages.
- Offering housing subsides to certain groups of workers where acute shortages exist, such as teachers, nurses and firefighters in southeast England. Subsidies may include mortgage relief, shared ownership and relocation grants.
- Improving the operation of Job Centers so that more information is available on job vacancies in any area.
The measures a government might introduce to increase the occupational mobility of labour include:
- Increasing the provision of training schemes, especially for the unemployed. This might include subsidies to private sector companies to offer training services.
- Increasing the provision of further education. Vocational education courses offer training in specific work-based skills and work experience to students.
- Increasing the provision of higher education. There has been a rapid expansion in the the number of students in the sector over recent years. Increasing access to student loans and limiting tuition fees might help.