Factors Affecting Local Employment in the United Kingdom and the USA - Essay Example

Management May 24, Factors affecting local employment in United Kingdom and the USA Globalization has created employment opportunities in many countries. However, these opportunities are not always equal among countries. There are several factors that constrain employment, and among these factors are those pertaining to economics, political, immigration, organization and demographic factors. These are the major issues in United Kingdom and USA that will be discussed in this study. 1. United Kingdom. Economy. UK has a labor force of 31.45 million distributed to agriculture 1.14%, industry 18.2% and services 80.4%. Services, particularly banking, insurance and business services account for a large part of its GDP while industry continues to decline. UK, like the other economies in the world, has also suffered an economic decline because of the economic crisis, much more due to its exposure in the financial sector. (CIA world Factbook). Because of this, the country was pressed into a recession in the middle of 2008. Labor has been affected because unemployment rate stepped up to 7.9% in 2010 as against 7.6 %in 2009. As shown in table below, the year 2011 has the highest unemployment rate in UK since 2003. Fig. 1. Unemployment rate in UK Source: CIA World Factbook, cited in Index Mundi Political environment Workers in UK are protected by the employment law. UK implements a national minimum wage amount of ?6.08 per hour to workers above 21, while ?4.98 is paid to workers with ages 18-20. Wage rate is much lower to 16-17 that is ?3.68S and for apprentice rate is ?2.60.how below are the entitlement of workers under this law. Working hours in UK should not exceed 48 hours, but there are instances that exempt certain class of workers from this. Doctors, domestic servants, police and army personnel and those engaged in emergency work are exempted in48 hours rule. All workers are entitled to holiday pay of 5.6 weeks paid annual leave, sick leave, of 5.5 times, rest breaks and overtime pay. These privileges are stipulated in an employment contract that has a term expiry. Sunday is a work day in UK (direct.gov.) Immigration rules. All foreign workers eager to work in UK must obtain a working permit. To qualify, applicant must qualify in the points based system for immigration for work based categories. Investors, entrepreneurs and exceptionally talented person, called as high-value migrants should pass the point system, and they are welcome to UK without the need for job offers. Other qualifications to work in UK are being a skilled worker, temporary worker, domestic worker, or representative of an overseas firm, broadcasting firm or a newspaper organization (UK Border Agency) Demographics Population of UK as of 2011 is 62,678,362. Age structure of working group is divided into 15-64 age bracket with male having 20,979,000 and female 20,500,000. With a labor force of 31.45 million part of this belong to women labor (CIA World Factbook, 2011). The constraint for employment is found to be the gender gap of pay that becomes barriers to women working in occupations traditionally done by men. According to Facts Fawcett society, the gender pay gap is estimated at 15.5% that could be worth L15 to L23 billion. The study of this society showed that 64% of lowest paid workers are women, and many of them are doing part-time work which is paid lower than the hourly rate work. 2. United States Economy The United States has a market oriented economy wherein businesses, organizations and individuals are allowed to make their own decisions while the federal government buys goods and services in the marketplace. US enjoy flexibility in management as compared to other countries and they can expand capital plant, develop new products and lay off surplus workers. Economic The economic crisis is one of the major constraints in local employment in the US labor market because as shown in the chart below, the unemployment rate has continued to rise up to 9.7% in 2010. Source: Bureau of Labor & Statistics. 2009. http://www.bls.gov/opub/ted/2009/may/wk2/art02.htm The minimum wage in the United States as of 2009 is $7.29 but there states that pay higher than the prevailing minimum wage. Columbia, for instance pays $8.25 per hour, and workers work 40 hrs per week . Cowan reports that minimum wage workers in the US tends to be younger, almost half are under 25, mostly are unmarried, and more likely to be part-time workers. Most of the minimum wage earners are found in leisure and hospitality industry (BLS, 2009) Holiday pay in the United States. The Fair Labor Standards Act of the US, the law that regulates workers rights doesn’t require employers in the private sector to pay employees a holiday pay or holiday time off. This means US, under this law, treats holiday as any other regular working day in terms of pay and day off. The law treats employees in the private sector and Fed employees differently when it comes to holiday pay. Fed closes offices during public holidays and pays employees holiday pay, but for private sector employers, paying employees during holidays is only voluntary. Yet, this has been a practice with private sector employers to pay employees working on holidays as part of incentive plans. Some employers have even offered double time pay and premium pay to reward employees (Employee issues.com) Demographics The total labor force of US is 154.9 million (2010 estimate) and a total population of 313,232,044 (2011 estimate). By occupation, the labor force is divided into: Farming, forestry and fishing – 0.7% Manufacturing, extraction, transportation and crafts 20.3 % Managerial, professional and technical 37.3% Sales and office 24.2% Other services 17.6% Source: CIA World Factbook, 2011 Constraint to employment is the development of a “two-tier labor market” in which those at the top are the professional, technically skilled personnel and those at the bottom lack education. This explains disparity in pay raises, health insurance coverage and other benefits.(BLS,2010) Immigration Employees who are interested to work and reside in the US need to get a visa or a working permit. They may do so under the following conditions: First, they can get an sponsorship by an employee, become an investor, get sponsorship by a close family member in the United States, join the diversity visa lottery program and/or enter US under an asylum and refugee status. However, the constraints under the U.S. program for immigration of getting lawful residence are that it takes usually a long period of time so that the momentum of the job offer is gone. Sometimes when the service of the employee is badly needed, sponsor employer asks for a non-immigrant visa that has a shorter time of validity (USCIS) Unlike UK that encourages high-value immigrants, this option is not available in the United States, and every applicant must pass the long process of application for entry to US. ( Bureau of Labor and Statistics, 2009) Conclusion: In comparing the restraining factors for employment between United States and the United Kingdom, the economic crisis is the strongest reason why employers control employment. As shown, both countries have increasing unemployment rate that is a sign that the economy is not improving. Economic expansion is not seen in business and manufacturing firms so much so that the need for employment is also limited. Because of the larger population of US than UK, unemployment is more intense in US because it has 9.7% unemployment rate as against 7.9% of UK. Second factor is discrimination. In UK discrimination is seen in women’s pay which is lower than those being received by men for the same piece of work. Although there is a law that dictates equality for all genders in the society, this is not fully enjoyed by women in the labor sector. In the US, discrimination is observed between the more educated and less educated workers. Because of technology, a gap is created between those who chose to get higher education than those who did not. Technology educated bred workers land good positions because they are qualified in terms of skills and thus enjoy higher salaries and benefits in their work. This gap cannot be ignored because those unskilled cannot be employed to technical jobs that are needed by the company. Employee benefits at work are more or less universal between the two countries, although there is a difference in the minimum wage application and working hours in UK is longer than US. In immigration, UK laws are more welcoming to those who are qualified than in the United States where processing of application is more tedious and loner. References Bureau of Labor & Statistics. 2009. Viewed 24 May 2011 2http://www.bls.gov/opub/ted/2009/may/wk2/art02.htm CIA World Factbook: United States Viewed 24 May 2011https://www.cia.gov/library/publications/the-world-factbook/geos/us.html CIA World Factbook: United Kingdom Viewed 24 May 2011https://www.cia.gov/library/publications/the-world-factbook/geos/us.html CIA World Factbook, cited in Index Mundi . Unemployment rate. Viewed 24 May 2011 http://www.indexmundi.com/united_kingdom/unemployment_rate.html Direct gov. Working time limits.Viewed 24 May 2011 http://www.direct.gov.uk/en/Employment/Employees/WorkingHoursAndTimeOff/DG_10028439 Direct gov. Employment terms and conditions. viewed 24 May 2011 http://www.direct.gov.uk/en/Employment/index.htm Employee issues.com. Holiday Pay – Paid holidays. Viewed 25 May 2011 http://employeeissues.com/holiday_pay.htm UK Border Agency. How to work in UK viewed24 May 2011 http://www.ukba.homeoffice.gov.uk/workingintheuk/ The Facts Fawcett society. Equal Pay - The Facts Fawcett society.Viewed24 May 2011 http://www.fawcettsociety.org.uk/index.asp?PageID=321 USCIS. US Citizenship & Immigration Services. Working in the U.S. Viewed 24 May 2011 http://www.uscis.gov/portal/site/uscis Read More