Urban Labour Markets: The Causes and Consequence of Change

Abstract

The labour market plays a key role in mediating the relationship between economic competitiveness and social cohesion within nations, cities and regions. It transmits external shocks and internal restructuring of the economy to the employment prospects, incomes and quality of life of individuals and communities. Key issues concern the pace and nature of economic change, the ability of the labour market to adjust, whether some groups bear a disproportionate burden, and what policies can help to mitigate these effects. The labour force should also be viewed as more than a passive recipient of economic change. In the language of urban competitiveness, labour can be regarded as an urban asset, with an in uence on economic performance through its productivity, creativity and availability. The issues surrounding labour market adjustment, exibility and employability go to the heart of many contemporary economic and social theories and policies. This paper provides an overview of contemporary labour market developments in Britain’ s cities. It also updates research from over a decade ago to establish the long-term trends, incorporates a selective review of recent literature, and discusses the implications for government policy. This approach is felt to be justi® ed on the grounds that there has been less synoptic research on urban labour markets in Britain during the past decade than there was in the 1970s and 1980s. Research has tended to become more specialised and focused on particular features of the labour market, such as the growth of `non-employment’ and social exclusion; particular localities or city types, such as `global’ and `polycentric’ cities; or particular adjustment processes, such as migration, commuting or wage exibility. Meanwhile, there is a growing body of literature asserting that there has been a turn-around and recovery in the performance of cities, but with limited supporting evidence. Coincidentally, there have been important developments in labour market policy, including increasing emphasis placed on supply-side perspectives, individual behaviour, skills and choice, while the differential demand for labour in different places has been downplayed. The ® rst section analyses the long-term changes in labour demand, looking particularly at the scale and composition of employment trends in the 1980s and 1990s compared with earlier decades. Despite major restructuring of the British economy and