A Look Ahead

Abstract

The UK is an exemplar of a free market economy; reforms pursued by all governments since the 1980s have resulted in ‘one of the most market-friendly economies in the world’ (Card et al 2004, p.13). The UK has tended to lead France and Germany and even the US on the degree of flexibility in hiring and firing and related matters (Card and Freeman 2004). Extensive labour inflows, particularly from Eastern Europe, have increased labour market competition. Despite the welcome introduction of a minimum wage, throughout the period, labour laws discouraged industrial action and employment protection was limited; one result of this was the fall in labour share depicted in Figure 2.3, particularly for the bottom half of workers (Atkinson 2009).