APPENDIX 29
Further memorandum from Andrew Glyn and
Esra Erdem Corpus Christi College, Oxford (JG 39)
THE UK JOBS GAP—LACK OF QUALIFICATIONS
AND THE REGIONAL DIMENSION
In our memorandum to the Committee of 7 October 1999
we showed that:
(i) there are enormous variations across
UK regions in the chances of the less qualified being in work
(fig 3 of our memorandum);
(ii) high levels of joblessness for the
less qualified in the old industrial areas extends across all
age groups (figs 6 and 9);
(iii) the recovery in employment over the
past few years has hardly dented the greater probability that
a less qualified person is out of work if he or she lives in one
of the less prosperous areas (figs 4 and 8).
The DfEE's reply to our memorandum makes two
main points:
(a) The link between joblessness of the unqualified
and shortage of jobs in the regional labour market is not as close
when measured by unemployment as when non-employment (unemployment
plus inactivity) is used. But this does not make unemployment
the better measure. Indeed the DfEE's own memorandum to the Committee
says that emphasis has changed "towards employment rather
than unemployment as a key labour market indicator. Employment
is central to the government's approach and, hence, much greater
prominence is now given to the employment rate" (paras 16/17).
Their evidence gives detailed information on variation in employment
rates across the country. Our memorandum added an emphasis on
how the disadvantage due to lack of qualifications combines with
regional disadvantage to give the very high levels of joblessness
amongst those with least qualifications in the low employment
areas. As far as the least qualified are concerned we cannot agree
with the DfEE's original memorandum that "At a regional level
the spread of employment (our emphasis) and unemployment is relatively
even and has improved in recent years." (para 8).
(b) The DfEE's response (and reply to Q3
on p 13 of the Minutes of Evidence 3 November 1999) points out
that those classified as inactive tend to be detached from the
labour market and so would not automatically take jobs if there
were more available. The DfEE's statement that "in all parts
of the UK a wide range of different jobs are coming up all the
time" (Minutes of Evidence para 13) and that "any problem
of mismatch is within local markets not between local labour markets"
tends to suggest that the jobs are available already. This would
imply that the problem in the low employment areas is not a lack
of jobs but rather that the unemployed and inactive are not (for
one reason or another) filling them.
Absolutely no evidence is given for believing
that the problem is exclusively on the supply side of the labour
market. The DfEE does not dispute that many men moved into inactivity
after losing industrial jobs (answer to Q5), but seems to imply
that lack of job opportunities cannot be the explanation of why
inactivity levels remain so high in the old industrial areas.
But the fact that employment rates for the least qualified are
so much lower for the younger age groups as well surely confirms
that lack of work is a continuing problem and not just a legacy
from the past. Just because many of the inactive and the long-term
unemployed are not actively looking for work does not mean that
helping or persuading them to search more effectively will bring
a proportionate expansion of jobs. "Say's Law", that
supply creates its own demand, does not apply to the less qualified
in local labour markets. More jobs do not flow into depressed
areas just because there are more people looking for them. Of
course if the qualifications of the unemployed and inactive could
be radically upgraded then the attractiveness of an area to employers
could be transformed in the longer-term and so would job prospects.
But this is far beyond the scope of current labour market policies.
Programmes which achieve more active and informed
job search, recent work experience or marginal improvements in
qualifications may well mean that some individuals, who would
otherwise have remained long-term unemployed or inactive, fill
some of the vacancies which do come up. But the fact that an individual
has a job that she or he would not otherwise have taken does not
imply that there is an extra person employed. That would only
have been the case if the vacancy would have otherwise remained
unfilled. The usual situation, in an area of chronic excess supply
of less qualified workers, will be that some other unemployed
person would have taken the job and so that person will remain
unemployed longer. The employment rate of the region will not
be significantly affected unless policy also succeeds in bringing
in more work.
The DfEE's response disagrees "that it
is necessarily more difficult for people with low or no qualifications
to find work in areas of low demand". Far from being incorrect
we feel this conclusion is self-evident. Labour market policy
must be based on fully accepting how serious in many areas is
the objective constraint of lack of jobs for the least qualified.
Andrew Glyn and Esra
Erdem
24 January 2000
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