3.2.5 Labour: Population, Training and Employment

(This is an archived extract from the book Patterns of Power: Edition 2)

Wealth creation depends upon the employment of labour, which can be viewed from different economic perspectives:

· The capacity of the economy depends upon the availability of suitably trained people of working age and upon their productivity.

· Labour is a cost to the activity of wealth-creation. Employers seek to minimise this cost, which is determined by the productivity of the workforce and the cost of the wages and benefits they receive.

· Income from employment supports consumer spending, which fuels economic activity.

· Employment also reduces the need for government spending on benefits; people help the economy if they support themselves by participating in wealth creation.

· People’s income from employment is an important aspect of their wellbeing, so the availability of suitable work and its hours and conditions are very important to them – as recognised in Articles 23 and 24 of the Universal Declaration of Human Rights (Appendix).

· People who are employed are less likely to resort to crime.

· As discussed later, people put pressure on governments if their employment is threatened (3.3.9.1).

From all these perspectives, it is advantageous to have most of a country’s population gainfully employed. This, though, is difficult to achieve when circumstances are changing rapidly. Some unemployment is inevitable, and the labour market (3.3.3.1) cannot function properly unless there is a pool of labour available.

As old technologies become superseded, those who were involved with them have to move on – often with wrenching social consequences – but, as will be seen later, government attempts to protect jobs are at best temporary and are bad for the economy as a whole (3.3.7.1). It is best for everyone if people who lose their jobs are able to find new work quickly; their ability to work starts to diminish if they stay unemployed, so there is a gradual erosion of productive capacity.

There is an increased requirement for training:

· New technologies may require new skills.

· When people have to change jobs they are likely to need re-training.

· Productivity can be increased by additional training.

There is an economic justification for some government spending on training, to increase the competitiveness of the country as a whole. Some of that spending could be channelled through employers – to make it worth their while to provide training for job-specific skills.