The Impact of Financial Crisis on the Uk Job Market

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The impact of the financial crisis on the UK job market and employment (2007-2009)

Module: PM021-Aspects of British Culture and Society

Name: JUN YU WU
Student Number: 0908108
Tutor: Jeff Meadowcroft
Word Count: 1,970

Contents

1. Introduction……………………………………………………………………...Page 3 2. Global financial crisis (2007-2009)………………………………………Page 3 3. Influence on world job market……………………………………………Page 3-4 4. Influence on the UK job market………………………………………….Page 4-5 4.1 Short-term changes……………………………………………………..Page4-5 4.2 Long-term changes……………………………………………………….Page 5 5. Analysis of current situation in the UK………………………………Page 5 5.1 “British jobs for British workers”………………………………….Page 6 5.2 Job shortage for unskilled youths…………………………………Page 6 5.3 Tendency of the UK job market……………………………………Page 6-7 6. Potential solutions……………………………………………………………Page 7 7. Conclusion……………………………………………………………………….Page 7 8. References……………………………………………………………………….Page 8

1. Introduction
It is important to investigate the changes on UK job market which were mainly caused by the global financial crisis. Since the global financial crisis happened in 2007, it has brought about a far reaching influence on world job market. Figures reveal that an estimated 6.0 percent of the world’s workers were not working but looking for a job in 2008. (International Labour Organization, 2009) The situation in the UK is even worse. The latest official jobless figures showed that the number of work in the UK had risen to its highest level since 1995. (BBC, 2009) This report will describe the impact which the financial crisis (2007-2009) has had on the UK job market and to find potential solutions to overcome this crisis. First, it will describe the background of the global financial crisis and how it has influenced on world job market. Then it will discuss short-term changes in the UK job market which were caused by the financial crisis and long-term changes over the last 30 years. The report will also analyse the current situation of employment in UK before providing some recommendations on issues, such as social security provision, where improvements are appropriate and how they can be made.

2. Global financial crisis (2007-2009)
The global financial crisis started to show its effects on June 2007. It was reported that this is the worst crisis that global financial markets have experienced since the 1930s. The crisis was caused by the collapse of the housing market in the United States. Credit in the United States and other developed countries were overly trustful of residential mortgages, commercial mortgages, credit cards, auto loans and student loans. Many securitized products had converted these debts into negative financial derivatives, in financing for leveraged buyouts and in the dangerous credit default exchange market, however the real reasons may go deeper. The high commodity and energy prices, the sub-prime mortgage crisis, contraction of the real estate market in many developed countries, and the severe global financial services shock has given rise to a massive tightening in lending and had a negative effect on most sectors of the economy and on employment (International Labour Organization, 2009)

3. Influence on world job market
The global unemployment rate increased from 5.7 per cent in 2007 to 6.0 percent in 2008, the number of the unemployed people increased by 10.7 million between 2007 and 2008, which is the largest year-on-year increase since 1998. The International Labour Organization predicted that at least 20 million jobs will have been lost by the end of 2009 due to this financial crisis, and mostly in financial services, construction, real estate, and the auto sector, which will make the world unemployment above 200 million for the first time. The amount of unemployed people worldwide could increase by more than 50 million in 2009. (International Labour Organization, 2009) The official...
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