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Special feature

A century of labour market change:

A century of labour market change: 1900 to 2000

1900 to 2000
By Craig Lindsay, Labour Market Division, Office for National Statistics

A summary of labour market conditions in the twentieth

Key points century.
● In 1900 the population was
around 38 million and gross domestic
product (GDP) stood at just under Introduction
£125 billion at constant 1995 market
prices. By the end of the century, the THE AIM of this article is to provide an end of the Victorian age, a period that
population had increased by 50 per overview of labour market change had seen the country at the forefront of
cent to 59 million, and GDP had risen
through the twentieth century, and its the Industrial Revolution and the
fivefold to £800 billion.
links to major events and to social expansion of Empire. Government
● The estimated employment rate
change more generally. ONS already intervention was light, and the economy
for 15 to 64-year-olds in 1902 was
produces a range of articles looking at had developed largely based upon the
around 69 per cent. Using Labour
Force Survey data the employment general labour market conditions: the free market liberal heritage of Adam
rate in 2000 was 71 per cent. monthly Labour Market Assessment Smith (1723-90), and of Cobden (1804-
However, this comparison is affected (see pp103-6) looks at the current 65) and Bright (1811-89). As late as
by changes in the school leaving age labour market situation using the latest 1874, both Disraeli (Prime Minister:
and retirement age. data; the annual ‘State of the Labour 1868-68 and 1874-80) and Gladstone
● The unemployment rate, as Market’ pieces (of which the first was (Prime Minister: 1868-74, 1880-85,
measured by those claiming published on the National Statistics 1886-94) had gone into the general
unemployment-related benefit, was website www.statistics.gov.uk last year) election promising to repeal income tax
below 5 per cent in 1900. It was at its look at change over the course of a year. (although during their different times in
highest point in 1932, at 22 per cent By comparison, this article aims to take office neither did). The nineteenth
but by the end of the century, it was a step back and to examine longer-term century had seen politics dominated by
below 5 per cent again. trends. the Tory and Whig groupings, and then
● One major change was the shift in In 1900, Britain was coming to the by their successor parties, the
industrial composition. In the UK,
manufacturing’s share fell from 28 to
14 per cent of employment, and
agriculture’s share from 11 to 2 per
cent.
● At the beginning of the twentieth
century, around five million women
worked, making up 29 per cent of the
total workforce. By 2000, the figure
had risen to 13 million, 46 per cent of
the total workforce.
● The average weekly hours of a
manual worker fell from 53 hours in
1943 to 43.5 in 1987.
● In 1900 trade union membership
represented 11 per cent of those in
employment. It peaked in the late
1970s at 50 per cent but by 2000 was
down to under 29 per cent, its lowest
level for 60 years.
● The level of full-time earnings has
soared from an average £1.40 per
week in 1902 (not adjusted for
inflation) to £350 per week in 1997.

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Special feature A century of labour market change: 1900 to 2000

A century of labour market change: 1900 to 2000

Conservatives and Liberals 250 times their 1902 level while prices great political change with the rise of
respectively. However, the beginnings had risen 67 times.5 Manufacturing’s the Labour Party at the expense of the
of change were evident. The Industrial importance had declined, representing Liberals. The political consensus had
Revolution, as well as bringing only 14 per cent of employment and 22 shifted over the century: first, to
increased wealth and higher living per cent of output. Similarly, only 2 per incorporate greater state provision of
standards, had seen the emergence of cent of people worked in agriculture, public services; and then more recently
the working class and the first disciples forestry and fishing, which represented it moved back slightly with
of Marxism. only 2 per cent of output. By privatisation and the reduction in direct
In 1900 the population was around 38 comparison, services represented government intervention in industry. A
million1 and gross domestic product around 75 per cent of employment6 and similar, if more extreme, shift had been
(GDP) stood at just under £125 billion2 66 per cent of output. Government played out on a global scale with the rise
at constant 1995 market prices. The intervention had increased markedly and fall of communism in Eastern
economy was more notably based upon with, for example, the development of Europe. This article attempts to
trade and manufacturing: manu- the Welfare State and the National examine the links between these events
facturing represented 28 per cent of Health Service (NHS). Government and changes in the labour market over
output; agriculture, forestry and fishing expenditure as a proportion of GDP had the century, and in particular in the
11 per cent; and services 50 per cent. increased from 15 per cent to around 40 changing nature of employment.
Looking at the labour market, the per cent.7
employment rate was 69 per cent, with Looking more generally at the labour The changing population
24 per cent in manufacturing and market, the employment rate stood at 71
textiles, and 12 per cent in agriculture. per cent, with unemployment at 4 per Underlying the changes in the UK,
Unemployment stood at around 3 per cent, as measured by the number of and the UK labour market, patterns over
cent. Within this, the workforce was people claiming benefit. Female the century have been changes in the
very much male dominated, with men participation had increased greatly, with population, most notably in migration,
representing 70 per cent of the active women representing 45 per cent of the birth rates and life expectancy. Within
population.3 active working-age population. By this, the main change has come from the
Britain in 2000 was a very different comparison, male participation was combination of falling birth rates and
place. The days of Empire were gone. declining. reduced mortality, which have led to an
The population had increased by 50 per The twentieth century was a period of ageing population, with an increasing
cent to 59 million;4 by comparison, substantial change for the UK. It saw proportion of people of post-retirement
GDP had risen fivefold to £800 billion, among other things: two world wars; the age.
at constant 1995 market prices (see rise and decline of trade unionism; the
Figure 1). This increase in living Great Depression; unemployment of up Migration
standards was also visible in average to 22 per cent; and great changes in Britain is a country of immigration
weekly wages, which had risen to over social attitudes. There had also been and emigration. It has always been

Figure Gross domestic product;a United Kingdom; 1900 to 2000

1
Million (£)
900,000

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0
1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

Source: United Kingdom National Accounts – The Blue Book

a At constant 1995 market prices. See technical note for further information about the data sources.
Note: Data have not been adjusted to reflect the post-2001 Census population estimates.

134 Labour Market trends March 2003

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A century of labour market change: 1900 to 2000 Special feature

relatively open, and the British research,9 at the end of the century the that non-British nationals made up 12.5

A century of labour market change: 1900 to 2000

population is now, as it always has been, largest single identifiable group was UK per cent of academic and research staff,
the result of successive influxes of nationals (mostly returning emigrants, were most likely to be in medicine,
migrants and the racial and cultural although some were born abroad). science and engineering, and comprised
intermixture of these migrants with Other major sources were the European over half the faculty of the London
those who were already here. It is also Economic Area and Asia, but, overall, School of Economics.
reasonably clear, if difficult to quantify, there were significant numbers of
that Britain has benefited considerably, migrants from as many as 29 regions of Mortality
in both economic and cultural terms, the world. This diversity of background At the start of the twentieth century
from this openness. Patterns in also feeds into labour market the mortality rate was 16 deaths per
migration varied over the twentieth experiences. Some migrants are very 1,000 living persons,11 and had been in
century. The century began with net successful, others are not. Immigrants constant decline since the 1860s when it
emigration, mostly of young men, to have a higher tendency to be stood at around 22.5 per 1,000. As
other countries, especially North unemployed or particularly Figure 2 shows, this sharp decline
America, Australia, New Zealand and economically inactive. Around 6 per continued into the first part of the new
the other colonies. During the Great cent of migrants are unemployed century, with continuing falls up until
Depression this was reversed as compared with a UK average of just 1921-25. The effect of the First World
migrants returned home, and following under 5 per cent. The migrant working- War can be seen in the male mortality
the Second World War there age employment rate is around 65 per series for 1916-20 when the rate
was marked immigration from cent, compared with 74 per cent for the increased to 16.5 per 1,000. The rate
Commonwealth countries. As a result, UK as a whole. However, those who do subsequently declined to 13 per 1,000
there was net inward migration from go into work, quite often move into in 1921-25. Female mortality also
1931 through to 1961. In the 1970s and areas of labour shortage. For example, declined, reaching 11 deaths per 1,000.
1980s, the UK became a net exporter of according to a Home Office migration By comparison, mortality rates have
people as families migrated to Australia, report10 published in 2001, 31 per cent been fairly flat in the period since 1925,
New Zealand and South Africa. of doctors and 13 per cent of nurses are falling only marginally. Female
However, of late there has been a return non-UK born; in London the figures are mortality was relatively unchanged at 11
to net immigration. For example, in 23 per cent and 47 per cent respectively. deaths per 1,000 in 1991-95. The male
2000, an estimated 100,000 more Half the expansion of the NHS over the mortality rate had declined from 13 to 11
people migrated into the UK than out of last decade – that is, 8,000 of the deaths per 1,000, excepting an upward
it.8 additional 16,000 staff – had qualified surge during the Second World War.
Moreover, immigrants are diverse, abroad. An estimated 70 per cent of Most of this improvement in male
and cannot be easily treated as a single catering jobs in London are filled by mortality has come after 1980. Looking
group. Their backgrounds are diverse. migrants. And in 1995-96, the Higher at the data on ‘deaths from injuries and
For example, according to Home Office Education Statistics Agency showed poisoning’,12 the main reason appears to

Figure Mortality ratesa over five-year periods by sex; Great Britain; 1901-1905 to 1991-1995
2
Number of deaths per 1,000 people
18

16

14

12

10

6
All
4
Men
2 Women
0
1901-1905 1911-1915 1921-1925 1931-1935 1941-1945 1951-1955 1961-1965 1971-1975 1981-1985 1991-1995

Source: Office for National Statistics, Mortality Statistics, general 1998

a See technical note for further information about the data sources.
Note: Data have not been adjusted to reflect the post-2001 Census population estimates.

March 2003 Labour Market trends 135

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A century of labour market change: 1900 to 2000

Figure Number of people in employment;a United Kingdom; 1900 to 2000

3
Thousands
30,000

25,000

20,000

15,000

10,000

5,000

0
1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

Sources: The Economist Publications Ltd.; Labour Force Survey

a See technical note for further information about the data sources.
Note: Data have not been adjusted to reflect the post-2001 Census population estimates.

have been the decline in deaths in road The employment level increased by leaving age. The school leaving age was
traffic accidents (possibly linked to the around 0.5 per cent per year on average. 12 years in 1900. This was raised to 14
introduction of compulsory seatbelt However, within this, there have been in 1918 and then to 15 in 1947. This was
legislation in 1983). variations, most notably half a dozen then raised again from 15 to 16 in
occasions when employment fell by 2 1972/73. Other things being equal, this
Births per cent or more. The most marked of will have reduced the number of young
The number of births has declined these was in 1921 when employment people in employment. For example,
throughout the century, interrupted only fell 17 per cent at the onset of the inter- according to the 1901 Census around 10
by the two post-war baby booms and a war depression. The second largest fall, per cent (140,000) of 10 to 14-year-old
peak in the 1960s. In 1900 the fertility of 5 per cent, came in 1946 following boys in Great Britain were already
rate per woman was 3.5 children; by the end of the Second World War. By ‘engaged in occupations’. Meanwhile,
1997 this had fallen to 1.7. comparison, the largest falls in GDP at the other end of the age scale, it is
Linked to this, there has also been an came in 1919-21 and 1944-45. important to be aware of the increase in
increasing tendency for women to have Similarly, it can be seen that retirement; in 1901 nearly 40 per cent
their first child later in life. As a result, employment falls in 1981 and 1991-92 (110,000) of men aged 75 or over were
the number of children born to women also appear to be lagged responses to still working. By comparison, in 2000
aged under 30 has been in decline since earlier falls in GDP. It is also noticeable less than one in ten men was still in
1961, whereas the number born to the that the two periods with the most employment after reaching the state
over 30s has been increasing.13 marked falls in GDP both followed pension age of 65.
world wars, which also provided the Just as employment has responded to
periods of strongest GDP growth (17 changes in output, so too has
The changing nature of per cent annual growth in 1915 and 14 unemployment. For much of the first 20
employment and per cent in 1940). years of the twentieth century the
unemployment In terms of the employment rate, the unemployment rate, as measured by
variations have been as marked as those those claiming unemployment-related
Given the growth in the UK population in the level, but the overall growth has benefit, was below 5 per cent (see
it is not surprising that the most obvious been somewhat less. It is possible to Figure 4). With the inter-war
changes in employment have come in the calculate an estimate for the depression, the rate increased to 17 per
changes in the level of employment. In employment rate for 15 to 64-year- cent in the early 1920s before easing to
1900 18 million people were employed in olds14 in 1902 of around 69 per cent. On around 10 per cent, and then soaring to
the UK. By 2000 this had risen to 27 the same basis, but using Labour 22 per cent in 1932. This fell back in the
million (see Figure 3), mostly as a result Force Survey (LFS) data, the current run up to the Second World War,
of population growth. As already noted, employment rate in 2000 was 71 per dipping to below 1 per cent during the
the population increased from 38 million cent. However, this comparison is war years. The post-war period was then
to around 59 million. affected by changes in the school fairly stable, with unemployment below

136 Labour Market trends March 2003

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A century of labour market change: 1900 to 2000 Special feature

A century of labour market change: 1900 to 2000

Figure Year-on-year growth of the retail prices index (RPI)a and unemployment;b United Kingdom; 1900 to 2000
4
Per cent
30

25

20

15

10

-5

-10

-15
RPI
-20 Unemployment rate

-25
1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

Sources: Economica; Retail Prices Index; Employment Gazette, December 1993; Office for National Statistics, claimant count series
a The RPI started in 1947. All figures before this date are estimated and are not official figures. They come from Layton and Crowther (1938). See technical note for further information on data sources.
b Unemployment data are based on register and claimant count data (see technical note for further information).
Note: Data have not been adjusted to reflect the post-2001 Census population estimates.

3 per cent until the mid-1970s when it shift in industrial composition, with official workforce jobs data and which
started to increase. The claimant the decline of agriculture and includes a wider number of industries
unemployment rate peaked in 1986 at manufacturing’s share of total than are included in Mitchell’s estimate.
around 10.5 per cent and it was only in employment and the rise of services. In Mitchell excludes the transport and
the last few years of the century that it the UK, manufacturing’s share fell from communications, and commerce and
dipped back to below 5 per cent. 28 to 14 per cent of employment, and finance sectors from services. Including
The other interesting factor is the agriculture’s share from 11 to 2 per cent. these sectors in Mitchell’s estimates
changing relationship between Nor was this a purely UK phenomenon. would suggest that services have
unemployment and inflation. The By 1900, the UK had already undergone increased from 34 per cent of UK
standard Phillips Curve theory (see the Industrial Revolution, and the employment in 1901 to 70 per cent in
technical note) suggests that there is a proportion of employment in 1991.
trade-off between inflation and agriculture was already in decline. By There were several drivers behind
unemployment. Low or falling comparison, according to Mitchell this change, some local, some general.
unemployment will, other things being (1998) agriculture still represented Most importantly, there is nothing new
equal, increase inflation; high or rising around 40 per cent of employment in in shifting industrial composition;
unemployment will lead to inflation France, Germany and the USA.15 By before the Industrial Revolution most
easing. Figure 4 shows that while this 1990, this was down to 6 per cent, 3 per people in the UK had worked in
holds for some periods, such as the 1920s cent and 3 per cent respectively. agricultural industries. The eighteenth
and 1930s, and maybe the 1960s or the Similarly, all three countries had seen and nineteenth centuries saw that
1980s, it is far from convincing over the growth in their service sectors, which change as technological innovations
century as a whole. The most striking increased from 17 to 33 per cent of began to improve the productivity of
contradictions of the rule are the 1970s, employment in France, from 11 to 33 agricultural workers, starting with
when both inflation and unemployment per cent in Germany, and from 14 to 33 Jethro Tull’s (1674-1741) mechanical
were rising, and the 1990s when both fell. per cent in the USA. On the same basis, seed sower in 1701. These
the UK saw service sector employment developments meant that more
Industrial composition increase from 21 to 32 per cent. This agricultural produce could be provided
As already mentioned, one major differs from the 75 per cent quoted by fewer workers and consequently the
change over the last century was the earlier in the article, which is based on numbers employed in the primary

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sector began to fall. However, at the opportunity for women to move into education seem likely to have fuelled
same time, technology such as the steam industry, with men fighting overseas. increased female participation in two
engine triggered the Industrial However, longer-term growth in female ways: first, with their children at school,
Revolution. The decline in employment participation is linked to other changes, women were more able to take up
in agriculture was more than offset by some within the labour market and some employment; secondly, and probably
the increase in the new manufacturing within society more generally. The more more importantly, with increased
and mining sectors. Similarly, the general rise in female emancipation and education women were equipped to take
twentieth century saw ongoing the change in attitudes around the 1960s on the new jobs. For example, in 1922
improvements in technology which are likely to have helped, and it is female students obtained around 23 per
improved efficiency in the noticeable that the major increase in cent of all first degrees – out of a total of
manufacturing sector, for example female participation has come in the post- just over 10,000; by 1993, this had risen
computers and automation. This in turn war period. However, there are also other to 45 per cent of around 90,000 degrees
freed up resources to work in the direct economic factors at play. The first awarded in the UK.18
burgeoning services sector. Moreover, is the general move, already noted, from By comparison, male participation
each revolution also helped fuel the heavy industry to services. Even within rates in the labour force fell over the
next: improved efficiency in agriculture remaining manufacturing there has been latter part of the twentieth century. In
raised living standards and wealth a shift from old industries to automation part, this seems to have been associated
which increased the demand for and to hi-tech manufacture, which are with the same industrial shift which has
manufactured goods; similarly, rising less physically demanding and, helped increase female participation.
living standards and leisure in the consequently, potentially more For example, the decline of old heavy
twentieth century helped increase the accessible. For example, the move from industries such as coal, shipbuilding and
demand for services. shipbuilding to computer component steel left a large number of men
Alongside this is a more international manufacture. unemployed in the 1980s. Many seem to
aspect to the process. Another driver Also, within the labour market, there have drifted into inactivity, feeling
behind manufacturing’s decline was has been the increased use of part-time detached from the labour market –
competition from abroad. To take one workers, leading to ongoing either too old or unwilling to reskill. It
example, 1913 was a record year for the developments in flexible working. The might be expected that this is to be a
Lancashire cotton industry. Exports of development of part-time working was passing problem that will lessen as the
woven cloth from the region topped aided by the rise of the service sector and particular affected cohort of workers
7,000 million linear yards – around 65 in turn made it easier for women with ages and leaves the workforce.
per cent of world output.16 By 1960, the families to return to work. This move However, there does appear to be a
Lancashire cotton industry was dead, was probably also aided by the increased more persistent and general decline in
killed by a combination of lack of use of labour-saving equipment in the male economic activity.
investment, which left it at a home, for example washing machines This increase in male inactivity
disadvantage when competing with and tumble dryers among others. appears to be associated with an
newcomers with newer, better Outside of the labour market, another increase in the ill health of the inactive
machinery, and the fact that overseas development which helped increase towards the end of the century. In
labour was cheaper. The pattern was to female participation was the rise of particular, since 1981 there have been
be repeated across a number of widespread education. Government increasing numbers of working-age
industries, and the economy moved to involvement in education before 1900 people being reported as disabled or
focus on those areas where it had more had been limited. The 1870 Elementary long-term sick. For example, in 1997-
of a competitive advantage, such as Education Act had required local school 98, almost two million long-term sick
services or those manufacturing boards to provide elementary schools and disabled people in Great Britain
industries that required higher skills. where existing facilities were were in receipt of incapacity benefit or
inadequate, but it was not until the 1902 severe disablement benefit, which was
Participation in the Education Act that schooling came more than double the number on the
workforce under local authority control. It was also equivalent benefits in 1981-82. The
Another major long-term change has not until 1902 that the Government number of people receiving disability
been the increasing female participation made any effort to establish a system of living allowance was three million, up
in the workforce. At the beginning of secondary education, when the Act over five times. Not surprisingly, this
the twentieth century, around five provided for two types of state-aided has fed into the social security budget,
million women worked, making up 29 secondary school: the endowed with social security expenditure more
per cent of the total workforce.17 By grammar school; and the municipal or than doubling in real terms between
2000 the figure had risen to 13 million, county secondary schools. It was the 1977-78 and 1999-00 to stand at almost
representing around 53 per cent of the 1944 Education Act that then £103 billion.
female population aged 16 and over and established the principle of free The question is: why has there been
46 per cent of the total workforce. education for all from primary to this increase in ill health? The rise in the
The First World War provided an initial secondary level. These changes in number of those receiving these

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A century of labour market change: 1900 to 2000

Figure Proportion of people in employment who are members of a trade union; United Kingdom;a 1900 to 2000
5
Per cent
60

50

40

30

20

10

0
1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

Sources: Trade union membership levels: British Labour Statistics Historical Abstract 1886-1968; Department of Employment;
Certification Officer's Annual Reports. Employment levels: One Hundred Years of Economic Statistics; Labour Force Survey
a Data since 1975 from the Certification Officer's Annual Reports are for Great Britain only. See technical note for further information about the data sources.
Note: Data have not been adjusted to reflect the post-2001 Census population estimates.

Figure Number of working days lost due to labour disputes;a United Kingdom; 1901 to 2000
6
Millions
180

160

140

120

100

80

60

40

20

0
1901 1906 1911 1916 1921 1926 1931 1936 1941 1946 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2000

Source: Social Trends 30, Office for National Statistics

a See technical note for further information about the data sources.
Note: Data have not been adjusted to reflect the post-2001 Census population estimates.

invalidity benefits is partly due to an were cut; the problems continue to deprivation which ‘. . . contributes to an
increase in the duration of claims rather affect the next generation, and the inter-generational cycle of inactivity,
than an increase in new claims. explanation appears to be at least in part low expectations, poor skills acquisition
However, as already noted there has cultural, with a cohort of workers and social exclusion’.19 Alongside this is
also been a real increase, particularly growing up used to worklessness. For an increased awareness of illness and
among men, which in part seems to be example, a regional strengths, disease, such as depression. Previously
linked to the decline of certain weaknesses, opportunities and threats such disorders may have existed but
traditional industries and the resulting (SWOT) analysis (see technical note) simply gone undiagnosed.
impacts on local areas. The rise cannot carried out in East Wales concluded that
be explained solely in terms of the certain areas were affected by the Hours worked
cohort of workers who left the old decline and restructuring of traditional Alongside the changes in
nationalised industries as subsidies industries. People experienced multiple employment type and characteristics

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A century of labour market change: 1900 to 2000

there was also a general decline in the average weekly hours of a manual employment. This rose to 40 per cent in
average hours worked over the worker fell from 53 hours in 1943 to the early 1920s before falling back to
twentieth century. In 1870 annual hours 43.5 in 1987.21 Moreover, while overall around 24 per cent in the mid-1930s
worked per person stood at 2,984. By hours have fallen there have been (see Figure 5). Membership then surged
1913 this was down to 2,624 and the changes in working patterns, which again, reaching 40 per cent in the late
decline continued, reaching 1,489 in have altered the nature of the working 1940s and remained fairly constant until
1998.20 Similar trends can be seen across week. For example, Sunday working the 1970s when again recruitment
the developed world, and are linked to has become more widespread since the increased. Union membership peaked in
technological change increasing Sunday Trading Act 1994, which the late 1970s at a little over 50 per cent
productivity. This rising productivity in allowed Sunday shop opening in of those in employment. However, it has
turn feeds into rising wages, and as England and Wales. been in almost continuous decline ever
wages increase beyond the subsistence since and by 2000 was down to under 29
level the greater the demand, and Workplace relations per cent, its lowest level for 60 years.
opportunity, for increased leisure time. The century also saw major changes Coupled to this there were varying
The decline in annual hours can also in workplace relations. In 1900 trade levels of industrial unrest through the
be seen in the reduced length of the union membership represented a little century. As Figure 6 shows, for much of
average working week. For example, under 11 per cent of those in the period, the number of working days

Figure Index of earnings;a United Kingdom; 1900 to 2000

7
1987=100
250
b
The index of Liesner's
200 hourly earnings c
Average Earnings Index

150

100

50

0
1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

Sources: The Economist Publications Ltd.; Average Earnings Index

a See technical note for further information about the data sources.
b The Liesner index data are based on the hourly earnings rates given in Liesner's One Hundred Years of Economic Statistics. Data have been
converted into an index so that 1987=100.
c The Average Earnings Index is based on the published data. However, the index has been reweighted so that 1987=100 instead of 1995=100
as in the published data.
Note: Data have not been adjusted to reflect the post-2001 Census population estimates.

Figure
8 Growth rates of average earnings and the Retail Prices Index; Great Britain; 1940 to 2000

Per cent
30

25 The index of Liesner's

hourly earnings
Average Earnings Index
20
Retail Prices Index
15

10

-5
1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

Sources: The Economist Publications Ltd.; Average Earnings Index

140 Labour Market trends March 2003

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A century of labour market change: 1900 to 2000

Figure Proportions of households with regular access to a car;a United Kingdom; 1951 to 2000
9
Per cent
100

90 No car
One car
80
Two or more cars
70

60

50

40

30

20

10

0
1951 1956 1961 1965 1971 1976 1981 1986 1991 1996 2000

Sources: Family Expenditure Survey; General Household Survey; National Travel Survey
a See technical note for futher information about data sources.

lost to stoppages has remained fairly accurately drawn out in Figure 8, which 45 per cent by 1970. This has remained
low. The first part of the century saw provides annual growth rates for constant since, but there has been
three main periods of unrest, each more earnings and the retail prices index continuing growth in the proportion of
marked than its predecessor. This (RPI). Most significant is the peak in the households with two or more cars (from
culminated in the General Strike in 1970s, which is also in official average 7 per cent in 1970 to 28 per cent in
1926 when 162 million days were lost to earnings index (AEI) data, and which 2000).
strikes; this was more than was lost for can be linked to the high inflation of the As well as the increase in car
the entire period between 1927 and period, and the resulting wage-price ownership, there has been an increase in
1970, an era of relative industrial peace. spirals. Generally, and without commuting. For example, from 1976 to
The 1970s and 1980s then saw broaching the issue of causality, 1999/2001 average commuting trip
industrial action flaring up again with earnings and inflation have moved distance increased by over 60 per cent.22
three years in which days lost hit 20 together since the 1950s. There are various reasons for increased
million. However, following the end of Figure 8 also brings out, which is not commuting in recent times. Greater
the miners’ strike in 1985 and reform of clear in the previous figure, that wage specialisation in the job market may
union legislation, the number of rate inflation has been declining since have led to more distant opportunities
stoppages fell away again. It is the 1970s. and more frequent job moves. The
important to note that a single major growth in female participation has
stoppage can dominate these figures. Labour mobility increased the number of households in
For example, even of the 162 million Linked to the changing nature of which both partners are working, and
days lost to strikes in 1926, 90 per cent work and the increased mobility of the inevitably in some cases travelling in
were in the coal industry. workforce has been the rise of motor opposite directions and living in the
transport, in particular the car. The car middle. Some commuting is from
Earnings has revolutionised working patterns, choice. Nor is all commuting by road.
The level of full-time earnings has increasing travel and labour mobility, Travel has also became easier with the
soared from an average £1.40 per week and allowing an increase in distances development of the railway, and for
in 1902 (unadjusted for inflation) to commuted. Data on the first half of the certain parts of the country – in
£350 per week in 1997. Figure 7 century are not available, but even in particular London – there can be no
illustrates an index of weekly earnings 1951 only 14 per cent of households had doubt that the development, and spread,
over the century with 1987=100. As can regular access to a car (see Figure 9). By of commuting is heavily linked to the
be clearly seen most of this increase 2000 this had increased to 73 per cent. development of the railway.
came in the period from 1970 onwards. The big growth came between 1951 and The key point is that over the last
However, this is slightly misleading. 1970 with the proportion of households century travelling to work has become
The patterns in growth are more with access to one car rising from 13 to easier and allowed people to commute

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Special feature A century of labour market change: 1900 to 2000

A century of labour market change: 1900 to 2000

longer distances. As such, it has had the trends that had started in the previous decline. Trade unions rose and then fell
effect of increasing the catchment area century, for example in terms of in influence. However, the overall
of local labour markets (as defined by industrial change and the continuing improvements were overwhelming:
Travel-to-Work Areas). improvements in technology. As always better working conditions generally;
when there is such sweeping change, falling hours; increased real wages;
Conclusion there are winners and losers. Many greater flexibility in work; and
traditional industries such as increased female participation in the
The twentieth century was a period of shipbuilding or mining, growth areas of workforce.
great change. In some cases, these were the nineteenth century, went into

i
Further information
For further information, contact:
Craig Lindsay,
B3/04,
Office for National Statistics,
1 Drummond Gate,
London SW1V 2QQ,
e-mail craig.lindsay@ons.gov.uk,
tel. 020 7533 5896.

Notes
1 House of Commons Library Research Paper 99/111, A Century of Change:Trends in UK Statistics since 1900 (1999).
2 100 Years of GDP 1900-1999 at: http:/statbase/themes/economy/Articles/NationalAccounts/Articles/100_years_of_GDP.asp.
3 Mitchell, B. R., International Historical Statistics: Europe 1750-1993, fourth edition.
4 2001 Census of Population.
5 House of Commons, Research Paper 02/44, Inflation: the value of the pound 1750-2001 (2002) at
www.parliament.uk/commons/lib/research/rp2002/rp02-044.pdf.
6 Workforce jobs.
7 Instititue for Fiscal Studies Briefing Note 25: Long-Term Trends in British Taxation and Spending (2002).
8 Office for National Statistics, International Migration 2001– interim estimates, First Release (28 November 2002).
9 Home Office, Research Study, The Settlement of Refugees in Britain, No.141 (1995).
10 Home Office, Research Study, RDS Occasional Paper No. 67, Migration: an economic and social analysis, at
www.homeoffice.gov.uk/rds/pdfs/occ67-migration.pdf.
11 Office for National Statistics, Mortality Statistics general 1998 (series DH1, No. 31), at www.statistics.gov.uk/statbase/xsdataset.asp?vlnk=2278.
12 Office for National Statistics,‘Deaths from injury and poisoning: external cause and year of registration or occurrence, 1901-2000’ taken from Table 3
published in Mortality Statistics: Injury and Poisoning (series DH4, No. 25), at www.statistics.gov.uk/statbase/xsdataset.asp?vlnk=5679.
13 Table 3.1 of Population Trends, No. 110, at www.statistics.gov.uk/statbase/xsdataset.asp?vlnk=6161.
14 Based on population and employment data in Liesner,T. Publications Ltd, One Hundred Years of Economic Statistics,The Economist Publications Ltd. (1989).
15 Mitchell, B. R., International Historical Statistics: Europe 1750-1993, fourth edition, and Mitchell, B. R., International Historical Statistics:The Americas 1750-1993,
fourth edition.
16 History and Heritage of the City and the Metropolitan County of Greater Manchester, at
www.manchester2002-uk.com/history/modern/20thcent-1.html.
17 Mitchell, B. R., International Historical Statistics: Europe 1750-1993, fourth edition.
18 House of Commons Library Research Paper 99/111, A Century of Change:Trends in UK Statistics since 1900 (1999).
19 East Wales, Objective 3, Regional Action Plan, Appendix 5, at prp.powys.org.uk/docs/obj3%20rap%20appendix%205.pdf.
20 Maddison, A., The World Economy: A Millennial Perspective, Organization for Economic Cooperation and Development (2001).
21 Liesner,T. Publications Ltd, One Hundred Years of Economic Statistics,The Economist Publications Ltd. (1989).
22 Department for Transport, National Travel Survey 1999/2001. Update at www.transtat.dft.gov.uk/tables/2002/nts/nts02.htm.

142 Labour Market trends March 2003

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A century of labour market change: 1900 to 2000 Special feature

A century of labour market change: 1900 to 2000

References
Allin, P.,‘One Hundred Years of Labour Market Indicators’, Employment Gazette, pp553-7, December 1993.

Department of Employment and Productivity, British Labour Statistics Historical Abstract 1886-1968 (1971).

Phillips, H.,‘The Relation between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom’, 1861-1957, Economica, new Series 25,

No.2, (1958).

Home Office Research Study,‘The Settlement of Refugees in Britain’, RDS Occasional Paper No. 67, Migration: An economic and social analysis, No.141 (1995).

House of Commons Library Research Paper 99/111, A Century of Change:Trends in UK Statistics since 1900 (1999).

House of Commons Library Research Paper 02/44, Inflation: the value of the pound 1750-2001 (2002).

Institute for Fiscal Studies Briefing Note 25: Long-Term Trends in British Taxation and Spending (2002).

Layston,W.T. and Crowther, G., An Introduction to the Study of Prices, Macmillan and Co., (1938).

Liesner,T. Publications Ltd, One Hundred Years of Economic Statistics,The Economist Publications Ltd. (1989).

Maddison,A., The World Economy: A Millennial Perspective, Organization for Economic Cooperation and Development (2001).

Mitchell, B. R., International Historical Statistics: Europe 1750-1993, fourth edition, New York Stockton Press (1998).

Mitchell, B. R., International Historical Statistics:The Americas 1750-1993, fourth edition, New York Stockton Press (1998).

Technical note

This article presents an overview of the main trends within Liesner, published in cooperation with ONS in 1989. Data for
the UK labour market over the twentieth century. In doing this, later years are consistent with the 2000 edition of The Blue Book.
it uses data from a number of different sources, and inevitably Data for years before 1948 are not available from National
there are issues of consistency and comparability over time. Such Statistics.
issues of consistency occur throughout this analysis. Data have
only been presented where it is considered that they add value. Mortality rates
However, this is an analytical article trying to draw out the main Figure 2 shows mortality rate data which are taken from
messages from the data and not a reconciliation piece; users Table 3 published in Mortality Statistics, general 1998 (series
should be aware that there are limitations in comparing data over DH1 No. 31), Appendix 1 (notes to tables – sources,
such a long period of time. methods and definitions) and are available at
www.statistics.gov.uk/statbase/xsdataset.asp?vlnk=2278.
Chart sources
Gross domestic product (GDP) Employment
Figure 1 showing historical GDP is reproduced from the Employment data are taken from two main sources: One
article ‘100 Years of GDP 1900-1999’, which was originally Hundred Years of Economic Statistics for the period 1900-1983; and
published in the 2000 edition of the United Kingdom National the Labour Force Survey from 1984-2000. This does create a
Accounts – The Blue Book, and is available online at potential inconsistency as the former is based on Census of
statbase/themes/economy/Articles/NationalAccounts/Articles/1 Employment data, whereas the latter is based on the number of
00_years_of_GDP.asp. people in employment. However, this does not detract from the
The source for much of the data before 1948 is The Economist overall message seen in the data, and the two series do appear
publication, One Hundred Years of Economic Statistics by Thelma reasonably compatible.

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A century of labour market change: 1900 to 2000

Technical note

Historical industrial employment data are derived from B. R. Working days lost through stoppages
Mitchell’s International Historical Statistics: Europe 1750-1993, The historic figures for working days lost are taken from
fourth edition.This allows comparison with other countries on a Social Trends 30 and are available on the National Statistics website at
more comparable basis. However, One Hundred Years of Economic www.statistics.gov.uk/statbase/xsdataset.asp?vlnk=134&more=Y.
Statistics does contain some industrial data, and while the detail
differs, the overall message is the same: a decline in agriculture
(from 13 to 1 per cent of the workforce); and manufacturing Earnings
(from 33 to 20 per cent) between 1901 and 1987. The main Two main sources are used for earnings data: The Economist
difference is in services, where the sector is more tightly defined, publication One Hundred Years of Economic Statistics; and the
and so smaller both in 1901 and 1987. But again, it has seen Average Earnings Index (AEI). The former provides data on the
growth (from 20 to 35 per cent).The other sectors identified by average weekly earnings of manual workers. This has been
One Hundred Years of Economic Statistics are largely unchanged: converted into an index with 1987 equal to 100 for the purposes
construction, energy and water supply, transport and of Figure 7. The AEI is available from 1963 – although not on a
communication have all declined slightly as a proportion of the completely consistent basis.The AEI is normally presented as an
workforce (by 2 to 4 percentage points). Distributive trades and index with a base year of 1995. For the purposes of Figure 7, it
public administration and defence have increased (by 1 to 2 was rebased to 1987=100. The reason for this was to allow a
percentage points). better comparison with the data from the publication One
Hundred Years of Economic Statistics; 1987 was the last year of
available data from The Economist publication.
Unemployment
Data on unemployment are based on the number of
registered unemployed in the British Labour Historical Abstract Car ownership
1886-1968 for the period 1900 to 1968. Data for 1969-79 are Data on car ownership is taken from Transport Statistics Great
taken from Employment and Productivity Gazette, vol. LXVIII, Britain: 2002 Edition. Figure 7 is derived from a number of surveys:
January-December 1970. Data for the period 1971 onwards are the National Travel Survey, the Family Expenditure Survey and
taken from the claimant count series available on the National the General Household Survey – and is available at
Statistics website. This has a number of consistency issues. The www.transtat.dft.gov.uk/tables/tsgb02/9/section9.htm#9.04.
series from 1971 to the present has been adjusted to be on a
consistent basis, but before that the data are affected by different ‘Phillips Curve’
definitions as set out in the Historical Abstract. Most notably, up The Phillips Curve represents the relationship between the
until 1948 the series is based on the proportion of insured rate of inflation and the unemployment rate, and was outlined by
workers unemployed – but not all workers were covered by the A. W. H. Phillips in his 1958 study ‘The Relation between
scope of the Unemployment Insurance Acts. For example, certain Unemployment and the Rate of Change of Money Wage Rates in
domestic employment was only brought within scope in 1938. the United Kingdom, 1861-1957’ (Economica, NS 25, No. 2, 1958).
From 1948 onwards the data are based on the unemployment Phillips discovered that there was a consistent inverse, or
register. negative, relationship between the rate of wage inflation and the
In addition, while the claimant series is the only long-term rate of unemployment in the UK from 1861 to 1957. When
series available, the user should be aware that it is a narrower unemployment was high, wages increased slowly; when
measure and does not correspond to ‘unemployment’ as defined unemployment was low, wages rose rapidly. (The only important
under National Statistics today. exception was during the period of volatile inflation between the
two world wars.) This in turn led to the suggestion that there is a
Retail prices index (RPI) trade-off between unemployment and inflation. However, this
Figure 4 shows retail prices growth, which has been calculated inverse relationship did not hold throughout the twentieth
from the RPI. However, the RPI does not date back to 1900. century, most notably breaking down in the 1970s when both
Official RPI data started in 1947. All figures before 1947 are inflation and unemployment reached high levels. For more
estimated and are not ‘official’ figures, and come from estimates information,see www.econlib.org/library/Enc/PhillipsCurve.html.
in Layton and Crowther, An Introduction to the Study of Prices
(1938). SWOT analysis
SWOT analysis is a business tool for auditing an organisation
Trade union membership and its operations, for informing planning and helping a company
The data on trade union membership levels are drawn from to focus on key issues. SWOT stands for ‘strengths, weaknesses,
three different sources. For the period 1900-1968 figures come opportunities, and threats’. Strengths and weaknesses are internal
from the British Labour Statistics Historical Abstract 1886-1968 and factors. For example, a strength could be specialist expertise. A
are on a UK basis. From 1968-74, the figures are from the former weakness could be a high cost structure. Opportunities and
Department of Employment, and are also on a UK basis. Data threats are external factors. An opportunity could be a new
from 1975 are taken from Certification Officer’s Annual Reports technological development; a threat could be a shift in consumer
and are for Great Britain (GB).Trade union membership rates are tastes. Successful businesses build on their strengths, correct
then calculated as a proportion of the employment series weaknesses and protect against vulnerabilities and threats. For
outlined earlier.The switch from UK to GB does mean that there further information,see www.quickmba.com/strategy/swot/.
is an inconsistency in the series, but the impact appears to be
small and does not detract from the overall message of union
membership.

144 Labour Market trends March 2003