50.50

Where have all the jobs gone?

Jobs are disappearing in the UK, wages are dropping, and there is a shocking absence of political debate about the changing nature of work and the disappearance of full-time secure employment.

Barbara Gunnell
2 October 2012

From all the fawning that the UK’s Prime Minister David Cameron lavishes on big employers such as Asda and Tesco, you’d expect him to know a little more about the rate of unemployment among the supermarket sector’s key employee pool, older women. But no sooner had Cameron boasted during parliamentary questions that the number of women employed was on the rise, than Labour party research revealed that  the job market for women aged over 50 seeking work was bleak indeed.

Older woman pack up her desk

As the Labour Party conference got under way, senior Opposition front-bench women launched a special commission to look at the employment problems of women aged 50-64.  It would examine what shadow Home Secretary Yvette Cooper has described as “a toxic combination of sexism and ageism” faced by 50-64 year old women. The commission, to be chaired by Miriam O’Reilly and Arlene Phillips, both of whom lost their jobs on television allegedly on account of age, will look at all aspects of employment.

But tackling discrimination is not going to resolve the bigger problem. Where are these jobs going to come from? Ed Balls keynote address on the Monday of conference made clear that he would not be reversing public spending cuts. As reported here before, when government wielded the axe on local authority budget cuts, it fell disproportionately heavily on women’s jobs. Balls’s sole remedy are the traditional building jobs (overwhelmingly male) that would result from a house building and an infrastructure programme.

 The stark statistics on women’s jobs are these. Since May 2010 there has been a huge increase in unemployment among over-50s women, 31 per cent compared to 4.2 per cent for the workforce as a whole according to the Office for National Statistics. Women in other age groups have also lost jobs at a faster rate than men during the same period. Cameron based his boast about the increase in women employed on new entrants to the job market and ignored the high number of part-time workers; the numbers are crunched here by Channel 4’s FactCheck.

Bribes

There has been no good news at all for that other critically disadvantaged section of society, the 16-24 year olds whose prospects for employment continue to worsen. Unemployment remains at more than a million for this group; long-term unemployment (out of work for more than a year) is so high that the “lost generation” that politicians and commentators warned of a year ago is not a reality. We have a  large cohort of young people who have been out of education for two years with no training or experience of working who may never fulfill their potential.

The remedies set in place by government to deal with this crisis are failing to do the job. The £1bn youth contract was intended to get 430,000 young people into work over three years. But last month the Work and Pensions Select Committee condemned the scheme as unable to deal with “the scale of the current problem”.

The chair of the committee, Dame Anne Begg, was specific: “In particular, past experience shows that 160,000 wage incentives (given to employers to encourage taking on staff) is a very ambitious target in the current economic climate. And 250,000 additional work experience placements for young people may also be unrealistic.”

It is rare to find any new thinking on this growing crisis, at least within the main political parties. One side persists with the rhetoric that jobless youth is the fault of young people themselves with their unrealistic expectations and wrong attitudes. They must be made “work-ready”, and potential employers must be given costly incentives (paid for by the taxpayer) to take them on. Further blame is placed on high public sector pay (the fault of the unions), bureaucracy and over-zealous regulation of health and safety.

In political conference season one might have hoped for a clear rejection of the Coalition’s austerity programme and a positive call for policies that create jobs and growth (and provide families with income to spend in the economy). The Shadow Chancellor’s infrastructure programme may, some years down the line, give the economy a boost but it offers no vision of change or hope to those kicked out of the old jobs. Nor does it answer  questions that young  people themselves are asking such as:

Where is the new work going to come from?

What kind of jobs?

There is a shocking absence of political debate about the changing nature of work and the disappearance of full-time secure employment. Nor in the UK is there political challenge to the dogma that “flexible labour markets” and “zero-hour contracts are good for the economy.

One German economist recently argued the folly of this kind of  "race to the bottom". Heiner Flassbeck, former German deputy finance minister and now chief economist at the United Nations Conference on Trade and Development, told the Independent newspaper:

“The UK and other Western economies are actually suffering due to flexible labour markets rather than benefiting. Wages are not rising and the shift in work from full to part-time means many consumers don’t have the same disposable income. Our economies depend on consumption, and this isn’t coming about because of the suppression of wages by the working of the labour market.”

As Henry Ford reasoned, if he didn’t pay his workers enough, they wouldn’t be able to buy his cars.

Also absent from the UK debate is the massive increase in both part-time work and self-employment. Neither of these are negative trends in themselves but when they are the unchosen consequence of loss of secure employment they can have a devastating impact on families and their future expectations.  These rapid social changes are happening with virtually no discussion. Yet, of the 431,000 jobs created in the UK economy over the past year, 318,000 or almost two-thirds were part-time.

Less is known about the huge number of those who have become self-employed, except that many have moved from reasonably well-paid jobs with security to much the same work for the same bosses but with no security at all.

Paradox

Paradoxically (at least for old-time feminists and trade unionists) some genuinely innovative thinking is emerging from the traditionally conservative Federation of Small Businesses. Its September 2012 report, Back to Work: the role of small businesses in employment and enterprise, makes a strong case for government to encourage small businesses and self-employment as a way of boosting the economy and dealing with unemployment.

It calls for initiatives such as the New Enterprise Allowance scheme to be simplified in order to make it easier for the young newly unemployed young people to start-up small businesses. It calls for easier Universal Credit reporting for the self-employed (in other words less spying on those who are claiming it while trying to set up as freelances or small businesses). And for the new Start-Up Loans initiative not to be restricted to those with A-Levels.

The FSB report reveals that around 1.3 million unemployed and disadvantaged people find work each year in the small business sector (compared with 130,000 from this group taken on each year by the large firms (ie, those with more than 250 employees) In other words, almost nine out of ten unemployed people actively looking for work will eventually find it in a small business, or will set up a small enterprise themselves. A large number of these small firms will be micro-businesses, with just a handful of people. These, says the FSB, are the nation’s future innovators.

According to recent Office of National Statistics (ONS) figures, 85 per cent of the growth in employment in the first three months of 2012 was due to people starting up in self-employment, most often as a consequence of losing their jobs. More than half of the increase in self-employment since the beginning of the recession have been women.

So why is  David Cameron wasting time and taxpayers money schmoozing the retail giants and paying them to hire unemployed graduates? It would clearly be more sensible to leave supermarkets to pay the staff they need out of their quite adequate profits, and use the money to encourage small start-ups and pay micro-firms to take on one more member of staff.

The Back to Work report does not reveal much about pay and conditions or job security in this sector. It is certain that a good number of small companies will fall wretchedly short of good practice.  But it remains a fair point made by the Federation of Small Businesses themselves that the sector most likely to take on women and young workers and start to revive the economy is receiving very little support or even attention from Government.

 

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