Opinion: troubling times in the jobs market

Despite uncertainty over the statistics (don’t worry, this isn’t a post about p-values and standard deviations), we can say with some confidence (say, 95%) that the UK jobs market remains in a volatile state with many people out of work or underemployed. With public sector jobs being shed rapidly as a result of austerity measures, and the private sector unable or unwilling to create more jobs than it sheds due to falling demand (going against Chancellor George Osborne’s  expectations), the net result is a devastating lack of work for millions of people, particularly amongst the young.

I’m hardly a fan of the ‘blame Labour’ rhetoric used by many Coalition Ministers, but a look back at the jobs market over the last few years reveals that Labour must take responsibility for the steep rise in unemployment under its watch. From a pre-crash floor of 5% in November 2007, the ILO unemployment rate jumped in the space of 19 months to 7.9% in June 2009. Of course this was the result of a deep, long-lasting recession originating in an unprecedented financial crisis and accompanied by a ballooning budget deficit – which is precisely why Labour needs to acknowledge their role in presiding over a disastrous crash in the jobs market.

This does not, however, absolve the Coalition of responsibility to any real degree. The heated exchange over the latest figures at PMQs between Ed Miliband and Cameron showed that whilst the latter’s ‘we won’t take lectures from Labour’ line still works, the former is increasingly right to ask why the current administration isn’t able to reverse the rise in unemployment which has now hit 8.3% of the workforce, or 2.64 million.

Both Labour and the Coalition promote(d) policies aimed at getting people back to work – misguided though some of them may have been, there’s little doubt that both the current Coalition and its predecessor administration have had some positive impact, as I’m sure will the Youth Contract will to some degree. But will any of these policies revive the demand for good and services that underpin net job creation? Will the jobs, and in many cases the public good that those jobs provided, be adequately replaced by private sector recruitment? Are we as a country sufficiently preparing our young workforce to navigate the fluid jobs market where chopping and changing will be the norm? Serious questions remain over how this Coalition deals with an increasingly troubling feature of the UK economy, not least when we consider the squeeze on living standards for those in work as a result of stagnant wages falling far behind inflation.

For many on the left, this latter problem in particular calls for stronger and more activist trade unions – and there is a liberal argument for this in that often strong unions do the work that legislation is forced to do elsewhere. However, as the latest Tube strikes demonstrate, unions don’t always aid the cause of even those they represent, let alone the wider public interest. There is also much talk of a return to the co-operative movement, not only so that workers can group together to run ailing public and private organisations, but to revive the friendly societies of the late 19th/early 20th Century that provided much more than today’s unions do.

So what does the esteemed LDV reader make of government proposals to boost employment? To what extent should full employment be an aim of government policy?Was scrapping he Future Jobs Fund a mistake or was the Fund ineffective? Will the Regional Growth Fund and the Youth Contract boost jobs? What role can unions, co-operatives and friendly societies play in ensuring security, decent wages and training? The comments thread beckons!

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3 Comments

  • Robin Martlew 16th Dec '11 - 5:05pm

    I’m not at all sure if I’m in the right topic here. I’m trying to comment on ‘Troubling Times in the Jobs Markets’

    I am sure I am getting myself a reputation (or more likely earning being complete written off as a barmy ignoramus!) However
    “So what does the esteemed LDV reader make of government proposals to boost employment?” Yes governments should regard full employment as essential, especially if we aspire to promote an ‘Inclusive Society”. No society can be called inclusive if it fails to include everyone in all of its functions!
    This does mean that we have to look at politics and the economy differently. Capitalism As e Know It, CAWKI, is positively exclusive. It is thus unfair, inefficient and unworkable. Yes I know I am boring, but it could be possible if we didn’t accept as a fundamental truth the assertions of the economic gurus whose vested intersets comprise the heirachy that continues to defend rather than question it!
    Much of economic teaching does work, but such sweeping staements as “Printing money is inflationary”; “You must cut public spending to allow the private sector to expand”: “The Private sector is the wealth creating sector “: or “We can only have growth through a dynamic private sector!” are all wrong!
    CAWKI works to these conventions and that is why we have ‘Stop Start’ and cyclical periods of Boom/Bust.
    Growth does not have to be inflationary, but managing growth has to be founded on real conditions, not perceptions of confidence etc.
    Efficiency is when everyone is producing goods and services that other people want or need. It is not dependent on which sector happens to be producing, It does need managing sensibly both in making sure that money goes where it helps and in maintaining a balance between trade.
    It does not need to be controlled from the centre, in fact it would result in a much more gentle and responsive society if it wasn’t!
    It does need huge changes over a longish period, but it could be done!

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