The economic and labour market

August 3rd, 2017

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The economic and labour market

The European Union is composed of member countries and states. It is a political and economic entity and it was established in 1993. The European Union controls the member countries by standardizing laws that applies and are used in all the countries that are its members. As Avgouleas, (2000, p.72), puts it, there is need of the rules that are used by the European Union to be harmonized. This will help the member states to be regulated by the same rules and guidelines and it will enhance uniformity in the member states and countries. As a result, the control of the member states will be made easier. The purpose of the formation of European Union was to guarantee the free movement of services, goods, people and capital. The European Union has helped in promotion of industries and in particular it has promoted the tourism industry in countries like Greece.

Economy of Greece

Greece being a member of the European Union has been using the Euro currency and it has benefitted from the currency. It started using the currency in the year 2002 and before that it had a very weak performance. As stated by Mitsopoulos, (2009, p. 246-254), the poor performance contributed to poor labour, corruption and the environmental protection. The use of a single currency to the member states has helped the countries to have competitive loan rates like the Greece and this helps in the improvement of the economy. As a result of the use of the euro currency, Greece increased its growth and the economic status was greatly boosted. Before the year 2008, the GDP growth of Greece was an average of 4% and sometimes it was above that, and this dropped to 2% after the financial crises in the year 2008 which affected the GDP of most countries. This has been illustrated by the diagram below. (Figure 1). In the year 2010, the GDP of Greece has contracted by 1.4 percent in the last quarter compared to the third quarter.

Greece GDP Annual percentage Change

Figure 1

Greece has been enjoying good living standards and it has had a stable economy by being a member of the European Union. In the Quality of life index for the whole world, Greece was twenty two in the ranking which is a good position in the world. There is a high standard of living in Greece even if their salary is below the average of the European Union. The social security cost makes the living standard to be good because they ensure that the people get a quality life. The cost of living has been increasing in Greece. Food is cheaper and affordable in Greece because of the farms in the provinces that provide the food.

The bank of Greece is the one that participates in the monetary policy formulation. The governor of the bank is involved in the decisions that are made concerning the monetary policy. The monetary policy in Greece seeks to maintain the price stability and maintaining the inflation rates. The target of Greece concerning the inflation rate is to maintain it below 2% but still close to two percent.

Labour market

Greece has received all the advantages of being a member of the European Union and the citizens can go to other countries without the visa. The economic structure of the European Union has helped the member countries to improve their trade in that there are no border controls and there are no tariffs for the member states. They also have the freedom to move freely with their capital.

Greece is located in Europe and it is in the southeastern part. It has mountains and some of the areas are filled with forest. It has good places for farming. Barley and wheat are the most suitable crops and other fruits are available. The country also has some parts for pasture and this largely contributes to the labour market. Greece is divided into three geographical regions. Manufacturing has become one of the major industries in Greece. It has been termed as an income earner and the people from Greece get their raw materials from imports. They have steel industry but they don’t manufacture cars. The other industry is farming which help in the contribution of the GDP of the country.

In the labour market, there are different regions and they are affected differently by effects of the economy. This is because of the different characteristics in every region and the challenges they get also differ from each other. This causes the patterns employment to be composed in several different ways. The European Union has discovered that a country may have two regions but they might be very different from each other in the patterns of employment. This is because they might be specializing in different things and they may be having different sectors.

In Greece regions are divided according to the things they specialize with and the main industries being agriculture and manufacturing. Some regions specialize in agriculture, others specialize with industry while others may specialize with services. There are ways that can be used to measure the sector specialization degree. The one approach that can be used is the method where the local economy is compared with a reference economy. This approach is also called the location quotient. It is used to measure the ratio of employment between the reference economy sector and the regional economy sector. The reference economy sector that is compared is usually the national economy of the location that the region that is being measured is situated. For example the regions in Greece use the economy of Greece.

The regions that specialize in services mostly get high education and the rate of employment cannot be compared with the region that people specialize in agriculture. The diagram below shows the percentage of the people who are employed with higher education compared to the total employment. According to the sector specialization, employment is low in the areas that do not specialize in higher education. Figure 2 is a good example of sector specialization where one sector specializes in agriculture and the other sector specializes with services.

File:Employed persons with higher education, as a percentage of total employment, by cluster, EU27, 2008.PNG

Figure

Economy of UK

When focusing at the quarterly growth, in UK the GDP in the last quarter of the year 2010 contrasted by o.5 percent when revised form the previous data. It has increased from the year 2009 by 1.5 percent which is a good trend. The figure below shows the GDP growth of the UK. Figure 3

GDP Growth of UK
Economy contracts by 0.5% in Q4

Figure 3

In UK, the living standard is high and especially the prices of buying a house in some areas. When people pay the mortgages, they are left with a little amount of money to spend. The food and other services that are provided are expensive because of the high cost of living.

The monetary policy in UK is set to maintain the stability of prices and to maintain low inflation. The inflation is based on the Consumer price index and the inflation target for UK which is expressed as annual rate is 2%. In UK the Bank of England is the one that is responsible for having a monetary committee that deals with the issues of the monetary policy.

On the other hand, the UK has been using the immigration policies as stated by Clark and Lindley, (2009, P175-198), in the economy. It has received migrants from the European Union member states. The UK has benefited from the migration and the growth rate in the world has also increased. The migration trends have proved that the migration of the skilled labour is good for the growth and the migration of the unskilled labour might be harmful to the receiving country. The migration from the European Union and from other countries has caused the population of the UK to increase.

Labour market

In UK the GVA per head in all the regions on the population decreased in the year 2008-2009.Different regions experienced different rates of decrease. The largest decrease in the regions was 4.0 percent followed by 3.5 percent. In the year 2009 there was a negative GVA per head in al the region which was not like in 2008 where there was a positive growth in all the regions.

United Kingdom is in the western part of Europe and it is an island nation. The whole country is surrounded by the sea. Some parts of the land are mountainous and there are some hills. Most of the coastal areas are wetlands and during heavy rains there are floods. The main industries in the UK are banking and finance. Steel is the third and manufacturing of transport equipment is also an active industry in UK industry.

All the workers in UK who are not from the country need to have Visas for them to work in the country. The rules of the Visas affect the labour market. Approximately fourteen percent of the labour market in the UK is composed of the immigrants who move there from other countries. Unlike the European Union labour market, there is no free movement in UK. The UK labour market has been stable. There have been immigrants and the employment has grown. The labour market in UK composes of the member states from the European Union and even other countries that are not from the European Union. In 2006, the employment grew over the whole year in all the quarters. The labour market in UK is divided into the public sector employment and the private sector employment. In the same year, the public sector employment went down and the private sector employment grew. Figure 4 below shows how the labour market statistics has been fairing from 2004 to 2006 in UK.

UK labour market holding up

Figure 4

According to Madouros, (2005, p. 215-220), the UK labour market in 2005 has sustained the unemployment level to be small and the employment level to be high. The results showed that the pressure of the wage in the economy was easing. UK has been able to balance the employment level because of the immigrants that come in.

The Gross domestic product of Greece in the fourth quarter of the year 2010 contracted by 1.4 percent over the third quarter, while the Gross domestic product of UK contrasted by 0.5 percent in the same quarter in the year 2010. The growth of the GDP in Greece has been contributed by the tourism.

Concerning the living standards of the Greece and the UK, Greece has been in better position because some of the basic things like commodities and food are easily affordable in Greece unlike in UK. Being that the GDP per capita in UK is greater than in Greece, The people in UK pay more for the things like alcohol, fuel, food and cigarettes and the people in Greece pay less because they pay less taxes. The prices of property in Greece are lower than the prices of the same in UK.

In the monetary policy, the inflation rate of UK is supposed to be 2% while Greece maintains its inflation rate below 2%, but it should not be very far from the two percent. The labour force that migrates to the UK need a visa unlike the citizens who do business and go to work in the European Union member states.

Geographically, Greece has a big land that can be used for farming compared to UK. There are many crops that are grown in Greece if compared to UK, and that is why the living standards are low. UK has many coastal areas because it is surrounded by water and most of the coastal regions are wetland unlike in Greece. The leading industry in Greece is manufacturing followed by farming unlike in UK where farming is not one of the main contributors of the economy.

References

Avgouleas. E., 2000, The Harmonization of Rules of Conduct in EU Financial Markets: Economic Analysis, Subsidiarity and Investor Protection. Academic journal. Vol. 6 Issue 1, p72, 21p

Clark. K. and Lindley. J. 2009. Immigrant assimilation pre and post labour market entry: evidence from the UK Labour Force Survey. Academic journal. Vol. 22 Issue 1, p175-198, 24p,

File: Employed persons with higher education, as a percentage of total employment, by cluster, EU27, 2008.PNG. 2010. Viewed on 29. March. 2011. <http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Labour_market_sector_specialisation_at_regional_level>

GDP Growth. Economy contracts by 0.5%in Q4. 2011. Viewed on 1st. April. 2011 <http://www.statistics.gov.uk/cci/nugget.asp?id=192>

Greece GDP Annual percentage change. 2008. Viewed on 29. March. 2011. <http://seekingalpha.com/article/110712-what-can-we-learn-from-greece-s-problems>

Madouros. V. 2005. An overview of the UK labour market, drawing together the latest official labour market data and information from non-government sources and taking the wider economic picture into account. Periodical. Vol. 113 Issue 6, p215-220, 6p

Mitsopoulos. M. 2009. Economic and social turbulence in Greece: the product markets are a no-brainer, the labour market is not. Academic journal. Vol. 44 Issue 4, p246-254, 9p,

UK labour market holding up. 2006. Viewed on 29. March. 2011.http://neweconomist.blogs.com/new_economist/2006/10/labour_force.html