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Examine the main feature of the structure of employment in the UK, noting the principal trends in the last 20 years.

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Introduction

1(a) Examine the main feature of the structure of employment in the UK, noting the principal trends in the last 20 years. The labour force within the UK can be divided into four different industries: the primary sector, the secondary sector, the tertiary sector and the quaternary sector. The primary sector includes agriculture, fishing, forestry, coal mining and steel works. The secondary sector includes manufacturing, construction and the supply of energy and water. The tertiary sector is the selling of goods and provision of services. Finally the quaternary sector is the information technology sector, and it is very hard to draw a line of distinction between the tertiary and quaternary sector. In 1971 the population of the labour force in the UK was 21.6 million, of which 5.5% were in the primary sector, 41.8% in the secondary sector and 52.6% in the tertiary sector. The UK employment in the primary sector has declined for many reasons in the past 20 years. One reason is that due to new technological advances the same amount of labour is not required in this sector. Another is that steel works have moved to countries where they can pay lower wages to the work force and thus reduce production costs and increase profits. Foreign governments have attracted the firms in the primary industry by giving them grants and reducing taxes. The secondary sector, the manufacturing sector, has also declined rapidly in the last 20 years. The UK motor vehicle manufacturing peaked in 1964 but ever since has been in decline. This decline in manufacture accounted for most of the peak unemployment in the early 80's and 90's, this mainly affected the North and Wales. Between 1978-84 1.9 million jobs were lost in manufacturing as employment collapsed by 19%. Employment in the energy sector has also declined along with employment in electricity, gas, water supply and other energy industries; they fell to less than 160,000 in 1996. ...read more.

Middle

There are also weaknesses however in the GDP per head even when it is adjusted to PPP, it does not take in account the hidden economy. The hidden economy includes illegal activity, subsistence farming, and DIY etc. this would be particularly important in LEDC's where there is a large rural economy and a great deal of corruption. For example it is thought if the hidden economy of Nigeria is brought forward in calculating its GDP then the GDP would increase by 70%. Another weakness is that although the GDP per head may be high it may mask a very wide distribution of wealth. In Saudi Arabia for example there are a very rich few the raise the GDP per head whereas the rest of the country are is not as economically well of as the GDP would suggest. Knowledge is also an indicator used to distinguish between developed and developing countries. Along with resources knowledge is need to make good use of the resources. Therefore education is a good indicator, this would include literacy rate and percentage of people going to higher education. In developed countries it is compulsory for children under the age of 16 to attend school, in developing countries however a percentage of the children start work before the age 16, as they need to help out with the family income. Children are seen as a source of income in poorer community of the LEDC's and therefore are sent to work at an early age rather than attending school. This is particularly true in the rural areas of an LEDC. In developed countries there is no need for the children to work at such an early age as the parents usually work and can pay for their expenses or they can claim benefits from the government. The number of people that go on to university can be measured and in developed countries there are a greater number of people going to university than in developing countries. ...read more.

Conclusion

Country A has a comparative advantage in producing food, as it is better off in producing units of food rather than units of machinery. The theory of comparative advantage, however, is based on a number of assumptions: 1) Resources are perfectly mobile, i.e. perfectly suitable for production of both goods. 2) Costs are constant and there are no economies of scale. The existence of economies of scale will reinforce the benefits from international specialisation. 3) There are no barriers to trade. 4) Traded goods are homogeneous. 5) No transport cost. In reality there are travel costs and these can sometimes eliminate any comparative advantage costs. 6) There is perfect knowledge, so all the buyers and sellers know where the cheapest goods can be found internationally. 7) Favourable terms of trade. Another point put forward by the theory of comparative advantage is that if the comparative cost of production between two countries does not differ then there is nothing to be gained from trading, as in will not increase GDP. If nations specialise in producing the good over which they have a comparative advantage then they increase their output, as they would have larger number of consumers, and thus increase their GDP and improve their economic welfare. Specialisation brings a certain amount of improved economic welfare, as some countries will limit the amount of their exports so that there is still a market for the same good made within that country. (An example of this is the United States imposing a tariff on imported steel. This tariff made the imported steel more expensive that imported steel so consumers had to buy US made steel). This is done so that that country will be self reliant in case of war or another international affair. If country A imports all its machinery from its neighbour, country B, but then they go to war then country B will stop supplying machinery to country A. Therefore it is important for country A to be able to provide its own machinery or other goods and services in imports. ...read more.

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