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To what extent does the British experience differ when compared against the major competitors - Essay Example

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Over the last three major recessions, British economy suffered from sensitive losses in output, which extended over several quarters to cause negative growths before its recovery. The job loss in the recessions caused massive unemployment, which could have been estimated to be restored in a period of approximately five years. …
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To what extent does the British experience differ when compared against the major competitors
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Download file to see previous pages The cause of the increase in unemployment is still associated with various issues that citizens claim to have resulted from poor decision making in the UK. They include the agreement to join the ERM, international economics, and the Lawson boom. However, the consequences were severely bitter in the intensity of unemployment, let alone deterioration in public finances. According to Mullard, “between 1990 and 1992 UK unemployment increased from 1.8 million to nearly 3 million, while public finances moved from a positive balance in 1990 to a public sector deficit of £50 billion in 1993 – an equivalent of 8 per cent of GDP”.The situation occurred when most of the workforce in Britain was concentrated in manufacturing industries, especially in the northern cities where steel, coal, and engineering industries were common. Although the OECD countries accounted for almost 35 million job loss between 1970 and 2000, the UK experience which fluctuated between 2 and 3 million job loss exceeded Germany and France who accounted for 1.1 and 1.4 millions respectively; with Yorkshire, East Lancashire, and South Yorkshire holding 10 percent each, of the unemployment rate in 1980s in UK. It is evident that the employers in UK shed more labor to minimize losses that when the calm from recession was returning, the existing labour force was insufficient to run effectively. The average rate of unemployment between 1981 and 85 was 10.5, 5.6, 6.2, 9.0 and 8.3 in UK, Italy, Germany, France and USA respectively (Irvin, 2011, p. 5).The unemployment duration seemed to contribute significantly to the increase in unemployment in ...Download file to see next pagesRead More
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