Unemployment, unemployment, unemployment!
18th February 2009 By Neil McInroy
Many of us are caught in the headlights of recession. The old instincts of talking the economy up or accentuating the positive – for inward investment purposes- are hard to shake off.
Also given the present situation, based partly on a crisis of confidence, we are wary of being negative – especially when there is growth in some sectors such as green technologies, despite being starved of investment.
However, for me the problem of unemployment is an issue which does not need any rose tinted spectacles. It’s an individual tragedy and a waste of human capital, which has pernicious and long-lasting effects on the economy and on communities.
Now having reached two million unemployed, it seems like a lifetime away since we were talking about ‘full employment’ and the Government’s target of 80% employment ‘in our generation’ – ambitious even prior to recession. To look at the situation now we are reminded of those dark days of the 1980s, and yet the present situation could still be worse.
It may be worse for three key reasons:
- Entrenchment. Britain had three million workless even in the good times of economic and sectoral growth. What does this now mean for those long-term unemployed people and the many communities which did not even enjoy the good times?
- Work is different. In the 80s we had more of a collectivity and solidarity around work. Being made unemployed was a tragedy, but at least on many occasions workmates and communities were in the same boat. Now work is less collective and more individualised. For many there is no automatic collective or solidarity to share the pain
- All sectors are affected. This is an industrial shake-out affecting many sectors including the professional classes. It’s got locational and vocational breadth
Of course, it may be that I am just accentuating the negative. Maybe the recession will have a ‘V’-shaped profile – a sharp drop but then a relatively rapid recovery, or it could be ‘U’-shaped – where we are in it for a longer time and recovery is more arduous.
However, the nature of unemployment and its devastating effects mean we need to plan for the worse. We need to plan for an unpredictable ‘W’ or even a disastrous ‘L’.
So what do we need to do?
- Firstly – take action on the ground. We need to connect up good national policy with activities in our communities. I have just visited an unemployed resource centre, set up in 1981. They tell me that they are starved of resources and the existing scale of operation and contracts at the national and regional scale are not local enough.
- Secondly – an integrated approach. As indicated in the interim report from the Houghton Review , we need an integrated programme response to dealing with unemployment, which would incorporate the Working Neighbourhoods Fund, and other programmes operated by the Department for Work and Pensions and Learning and Skills Councils.
However, I would go further and suggest that this integrated response also relates to BERR, the Regional Improvement and Efficiency Partnerships and the work of the RDAs. Each Local Authority and region or sub region (where there is an MAA) needs real local flexibility and powers over funding streams to control resource and bend existing programmes. We cannot wait for LAA negotiations. We need those flexibilities and the accompanying resources now.
- Thirdly - we need to help the local economy. We need to think about stimulating local demand and job creation through progressive public sector procurement and safeguarding public employment. LSPs and all public sector partners have a key role in this. We also need to consider how we can best keep people in work, how the benefit system can balance fairness with incentivising employment, and putting money into the pockets of those with a greater likelihood to spend.
There are no positives in unemployment and it needs to be tackled quickly and decisively.