Equitable full employment:Delivering a jobs recovery for all

Tony Wilson, Policy DirectorCentre for Economic and Social Inclusion

tony.wilson@cesi.org.uk@tonywilsoncesi

2008: a full employment economy?• Record employment – 75% of ‘working age’• At or near ‘structural’ rate of unemployment • Biggest gains for those furthest behind

• But still 2.5 million out of work due to ill health• Employment rate of disabled people <50%• Still wide gaps between regions (8 ppts) –

driven by ‘inactivity’, not unemployment

• Need a new definition...

It’s one thing to want full employment...• 80% employment rate?• DWP Five Year Strategy, 2005

• ‘Best in class’ employment?• Highest in G7 (George Osborne, April 2014)

• Something else?

It’s one thing to want full employment...• 80% employment rate?• DWP Five Year Strategy, 2005• Today would mean 3.3 million more in work

• ‘Best in class’ employment?• Highest in G7 (George Osborne, April 2014)• Consistently achieved during 2000s

• Something else?

It’s one thing to want full employment...• 80% employment rate?• DWP Five Year Strategy, 2005• Today would mean 3.3 million more in work

• ‘Best in class’ employment?• Highest in G7 (George Osborne, April 2014)• Consistently achieved during 2000s

• Something else? (Lawton and Dolphin, 2013)• 80% excl students, with narrowing gaps• Achievable, relevant – c1.7m more in work

This research• Which areas and groups benefited most from

the UK’s period of prolonged growth before the recession?

• What have been the impacts, for different areas and groups, both of the recession and the (tentative) recovery?

• What steps can we take to ensure that growth in employment can be shared equitably in the future?

Regions: gaps have narrowed, but still remainDifferences between regional and UK employment rate

1997 2007 2010 2014South East 5.3 4.3 4.1 3.7South West 4.0 4.1 3.5 3.2East of England 3.2 3.2 3.0 3.4East Midlands 2.5 0.4 0.4 -0.2West Midlands 0.5 -1.5 -1.0 -2.4Yorkshire and the Humber -1.7 -1.0 -1.8 -1.4London -2.0 -3.5 -2.3 -1.0Scotland -2.6 1.3 -0.1 0.7North West -2.6 -2.0 -1.6 -2.8Wales -4.1 -3.5 -3.8 -1.5Northern Ireland -5.5 -4.9 -4.2 -4.7North East -6.1 -3.2 -2.6 -3.5

And this is more pronounced in local JSA rates

Disadvantaged groups: progress has stalled

“Misleading, irresponsible and wrong”?Employment rates for young and older people, 1992-2014

“Misleading, irresponsible and wrong”?Employment rates for young and older people, 1992-2014

“Misleading, irresponsible and wrong”?Employment ‘gaps’ for young and older people, 1992-2014

A recovery for those out of work?

Job starts lower (almost) everywhere – but recovering more strongly in city regions?

Hiring recovering more strongly for men...

... for older people ...

... and for the more qualified

For other disadvantaged groups...• Hiring rates remain far lower• Five percentage points for ethnic minorities• Eight percentage points for disabled people

• But rates have not fallen by as much, and have recovered most or all of lost ground

Clear changes in the work that people do• Employee job starts down 20% on pre-recession• Self-employed starts up 7%

• Temporary work rising, including since recession• Up 9% on 2009/10 (excl seasonal and fixed term)

• Part-time employment now 39% of job starts• Up from 35 before recession

• Employment less secure, more precarious

2011 onwards, recovery strongest in middle and top of labour market

Median pay > £30k

Median pay < £20k

So what do we do about it?!

Need action in four areas• Supporting job creation

• Supporting disadvantaged areas

• Supporting those furthest from work

• Supporting quality, sustainable jobs

Supporting job creation

Previous TUC research (Silim, 2013)

• Clear case for well-designed intermediate labour markets• Including job guarantees

• Potentially a role for hiring subsidies – but often design/ implementation issues

Supporting disadvantaged areas

1: Companies benefiting from the Regional Growth Fund and Enterprise Zones should be expected to support local residents that are out of work – incl. Through work experience, traineeships and re-employment services

2: The Work Programme/ its successors should be reformed so that funding is maintained/ increased for residents living in areas with weaker labour markets

Supporting those furthest from work (1)3: Jobcentre Plus should offer employment advice and

support to all young people that are out of work

4: Increase traineeship take-up by targeting at areas with high youth unemployment and providing stronger incentives for employers

5: Reform the Youth Contract to offer targeted ILM support to long-term unemployed young people

6: Improve the joining up between training and employment support, particularly for the lowest qualified

7: A lack of qualifications should be used as a proxy for access to more intensive employment support

Supporting those furthest from work (2)8: Disability employment programmes should build on

what works, particularly around supported employment

9: Capacity and capability building to support local commissioners of disability employment support

10: Develop outreach programmes for ethnic minority groups that are furthest from mainstream support

11: Clearer service standards, including a guaranteed level of service, for long-term unemployed people being supported through Government programmes

12: For the longest-term unemployed, test a more ambitious package of support – around ILMs, integrated delivery and supported employment

Supporting quality, sustainable work13: Unlock the Adult Skills Budget to provide targeted

support for low-paid workers to improve their skills. In time, develop an ‘Employment Plus’ model that joins up support to move into work, stay there and progress

14: Tripartite sectoral bodies should be established and promoted in low-paying sectors, with a clear focus on raising skills and productivity, promoting workforce development and promoting ‘decent work’

To sum up• Full employment must be more than a slogan

• We narrowed, but did not close, gaps before the recession

• Signs of an uneven recovery – with particular risks around young people, lowest qualified, weakest areas

• But could have been a lot worse

• Need concerted action nationally and locally – growth, employment, skills

Equitable full employment:Delivering a jobs recovery for all

Tony Wilson, Policy DirectorCentre for Economic and Social Inclusion

tony.wilson@cesi.org.uk@tonywilsoncesi