Transcript A resilient labour market

The State of the Labour Market
and
Long-term Worklessness
Dave Simmonds & Paul Bivand
Centre for Economic & Social Inclusion
A resilient labour market
(courtesy of Andrew Sentance)
• Traditional industries not affected so much
• Less structural unemployment
• Retain skilled labour
• Sound profitability
• Service sector ‘sponge’
• Low productivity
• Driven by business services and health
• Under-recording of GDP
• Labour market flexibility
•
Wage restraint
•
Lifestyle
•
Active labour market policy
But ....
• Based on assumption that extent of
worklessness (rather than unemployment) has
been better
• Not included those on inactive benefits
• Resilient analysis is based on ‘parking’ of those
with ‘low productivity’
The pattern of worklessness has
changed
Lone parent benefits
Unemployment benefits
Incapacity benefits
Non-claimant unemployed (LFS)
7 mil
6 mil
5 mil
4 mil
3 mil
2 mil
1 mil
20
09
20
11
20
05
20
07
20
01
20
03
19
95
19
97
19
99
19
91
19
93
19
87
19
89
19
83
19
85
19
79
19
81
0 mil
And will change for the future…
•
•
•
•
•
•
IB reassessment – 1.5 million to be reassessed
Lone parent obligations – further 200,000
Universal Credit from 2013
Disability Living Allowance replacement
Pension Credit eligibility changes – rising age
Changing population
• 18-24s falling
• 25-34 rising
• 35-49 falling
• 50+ rising
Changing benefits profile
6,000,000
Universal Credit
Unemployment benefits (consistent)
IB transfer to JSA (cumulative) less jobs
ESA new claimants found fit for work (cumulative) less jobs
Lone parent transfer to JSA (cumulative)
ESA/IB
Lone parent benefits
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
2009
2010
2011
2012
2013
2014
Jobless recovery? OBR employment rates
OBR forecast
Actual
61
60
59
58
57
56
Feb 1990
Feb 1995
Feb 2000
Feb 2005
Feb 2010
Feb 2015
Employment not forecast to grow
before late 2012
30.5
30.0
29.5
29.0
28.5
28.0
Nov 2009
Nov 2010
Nov 2011
Nov 2012
Nov 2013
Nov 2014
Nov 2015
Stopping long-term unemployment
- this recession and last
Aug 1991
Apr 2009
Sep 2010
May 2011
70%
60%
50%
40%
30%
20%
10%
0%
3 month flows
3-6 months
6-9 months
9-12 months
12-15 months
Work Programme - last year estimates
and 2011 DWP volumes
JSA 18-24
JSA ex IB
ESA ex-IB
Lone parents on JSA
IB transfer to JSA
ESA new found fit for work
ESA/IB Work related
Unemployment benefits (consistent)
JSA 25+
ESA work related
JSA disadvantage
ESA voluntary
1,000,000
900,000
3.0m
Universal Credit
800,000
2.5m
700,000
600,000
2.0m
500,000
1.5m
400,000
300,000
1.0m
200,000
0.5m
0.0m
2011
100,000
2012
2013
2014
0
Aug 2011
Aug 2012
Aug 2013
Aug 2014
Aug 2015
What do we now think Work
Programme volumes will look like
DWP
Inclusion
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
Aug 2011
Aug 2012
Aug 2013
Aug 2014
Job outcomes and vacancies
Annual change in New JCP vacancies per new JSA claimant and JCP job outcomes, GB, SA
60%
40%
20%
0%
-20%
-40%
-60%
-80%
New vacancies per new claimant
Lone Parents
People with a Health Condition or Disability
Long-term unemployed
Short term unemployed
Job outcome annual change
Lone Parents
Other Inactive customers
Short term unemployed
50%
40%
30%
20%
10%
0%
-10%
-20%
-30%
-40%
People with a Health Condition or Disability
Long-term unemployed
GDP quarterly change
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
-0.5%
-1.0%
-1.5%
-2.0%
-2.5%
GDP quarterly change
Job outcomes and GDP
Non-claimants: hidden unemployment?
JSA claimants
ILO unemployed
900
800
700
Thousands
600
500
400
300
200
100
0
Apr
1997
Apr
1998
Apr
1999
Apr
2000
Apr
2001
Apr
2002
Apr
2003
Apr
2004
Apr
2005
Apr
2006
Apr
2007
Apr
2008
Apr
2009
Apr
2010
Apr
2011
Non-claimant unemployed –
increasing since 2004
All
Male
Female
400
350
Index May 1997=100
300
250
200
150
100
50
0
Apr 1997 Apr 1998 Apr 1999 Apr 2000 Apr 2001 Apr 2002 Apr 2003 Apr 2004 Apr 2005 Apr 2006 Apr 2007 Apr 2008 Apr 2009 Apr 2010 Apr 2011
What do we know about nonclaimants
• Competitors with welfare to work participants
• Many are long-term unemployed
• Looking for work and available to start – not
necessarily full-time
• Women unemployed – half of non-claimant
• Young likely to be non-claimant – 55% of nonclaimants in full-time education
• Over 50s – 43% of male unemployed, 47% of
female are non-claimant
Lessons for policy
• Labour market will continue to be resilient with
caveats
• Service sector still create jobs?
• Traditional industry opportunities
• Wage restraint
• Labour market interventions – increase
effectiveness
• Lifestyle changes – p/t working, older workers,
etc
Lessons for policy
• Jobcentre Plus – as effective and increased
emphasis on job placement
• Work Programme – needs market adjustment
mechanisms
• Need to anticipate Universal Credit
• Non-claimants long-term unemployed – should
we do anything?
• Lone parents – support for those with under-5s
• ESA not ready for work – is 3 months right?
• Very long-term unemployed – multiple barriers
• What is the most effective job placement
service?