By end of 2011, there will be 4.6 unemployed people for every vacancy

The economic turmoil of the past 2 years is absent from the coalition government’s ambitious prescription to reduce unemployment, explains ippr's Tess Lamming.

Our guest writer is Tess Lanning, researcher at the Institute for Public Policy Research (ippr)

In another time of high unemployment George Orwell lamented that “these unemployed are all unemployables”. Now, as then, the debate rages about whether people are out of work because of a shortage of jobs, or because they lack motivation, skills and ambition. The work and pensions secretary seems to think the latter:

“Aspiration, it seems, is in danger of becoming the preserve of the wealthy” – Iain Duncan Smith, 27 May, 2010

Perhaps this is why the economic turmoil of the past two years is conspicuously absent from the coalition government’s ambitious prescription to reduce unemployment. Their £3 billion ‘Work Programme’ is in keeping with the previous government’s New Deal, born in an era of strong economic growth. This back to work scheme will provide services to support people to seek work more effectively and to tackle any personal barriers to work. In short, the government is pledging to make the unemployed more employable.

But when there are more than five people chasing every vacancy in the UK, jobs also count. New analysis by the Institute of Public Policy Research (ippr) reveals that there are 330,000 fewer job vacancies in the UK than there are long-term unemployed people alone. And this highly competitive environment shows no sign of abating. ippr’s calculations suggest that there will still be 4.6 unemployed people – and 1.6 long-term unemployed – for every vacancy at the end of 2011.

In a report published this week ippr presents evidence that in both boom and bust the shortage of jobs has played a bigger role than previously realised. Far from lacking motivation, many people living in deprived areas have to put constant effort into looking for work, locked in a frustrating search for the next low paid, low skilled and temporary job.

The recession hit deprived areas hardest and amid fierce competition for jobs, companies are now turning away perfectly employable candidates.

Unemployment-and-vacancies-in-the-UK

ippr argues that if back to work services are to improve the prospects of the most disadvantaged job seekers, they will need to play an active role in supporting businesses to survive the downturn and grow. Sector-specific employment programmes support growth sectors to expand or invest in a workforce, and as such have the potential to help create new jobs.

The approach works well in growth sectors and those with skills gaps. Most small businesses – the key drivers of future growth – are keen to expand but many struggle to find people with the right skills or lack the capacity to manage new staff.

These organisations want tailored support to improve business planning and tools to increase management capacity and implement training, boosting productivity among workers. Some enterprising organisations that use this approach have helped stimulate an improved local economic climate, with more and better jobs for jobseekers.

Where these schemes struggle it is because of the difficulties of engaging companies operating in low skilled industries to invest more in workforce development and better utilise the skills of their workforce, suggesting a problem with the poverty of aspiration among employers.

While the UK’s flexible labour market has been credited for the lower than expected rates of unemployment after the recession, in the long term ‘flexibility’ and short-termism have also removed incentives for employers to invest in skills and retain staff. Temporary and part time workers are less likely to receive in work training and a third of UK employers provide no training at all. The result is not only fewer jobs, but poor opportunities for workers to progress and relatively low levels of innovation and productivity in the UK economy.

In some countries associations of employers, bound by locality or sector, contribute to a collective fund for apprenticeships and work-focused training. International practice shows that these can help to stimulate investment and utilisation of skills among employers. To avoid the problem of low skill sectors opting out, involvement should be mandated by legislation if necessary.

Ed Miliband is right to argue that the coalition needs a more coherent strategy for growth – and both the IMF and the OECD agree. But at a time where he has asked Labour to re-evaluate the role of flexible labour markets, all parties need new solutions. Promoting flexibility among employers is arguably more important to recovery than demanding more flexibility from British employees. Businesses that are able to adapt and deploy well-trained staff to different tasks are better able to weather shocks and take advantage of emerging markets.

• The report will be published this week – read the executive summary here.

23 Responses to “By end of 2011, there will be 4.6 unemployed people for every vacancy”

  1. Claire French

    RT @leftfootfwd: By end of 2011, there will be 4.6 unemployed people for every vacancy //bit.ly/9PHwZQ by @ippr's Tess Lamming

  2. Edward Leathem

    RT @leftfootfwd: By end of 2011, there will be 4.6 unemployed people for every vacancy //bit.ly/9PHwZQ by @ippr's Tess Lamming

  3. Shamik Das

    RT @leftfootfwd: By end of 2011, there will be 4.6 unemployed people for every vacancy //bit.ly/9PHwZQ by @ippr's Tess Lamming

  4. George Woods

    RT @leftfootfwd By end of 2011, there will be 4.6 unemployed people for every vacancy //bit.ly/9PHwZQ by @ippr's Tess Lamming

  5. Michaeljon

    RT @leftfootfwd: By end of 2011, there will be 4.6 unemployed people for every vacancy //bit.ly/9PHwZQ by @ippr's Tess Lamming

  6. Rhys Goode

    RT @leftfootfwd: By end of 2011, there will be 4.6 unemployed people for every vacancy //bit.ly/9PHwZQ by @ippr's Tess Lamming

  7. Derek Bryant

    RT @leftfootfwd By end of 2011, there will be 4.6 unemployed people for every vacancy //bit.ly/9PHwZQ by @ippr's Tess Lamming

  8. jogillette

    RT @leftfootfwd: By end of 2011, there will be 4.6 unemployed people for every vacancy //bit.ly/9PHwZQ by @ippr's Tess Lamming

  9. TSSA

    RT @woods_george: RT @leftfootfwd By end of 2011, there will be 4.6 unemployed people for every vacancy //bit.ly/9PHwZQ by @ippr's …

  10. OteshaUK

    RT @leftfootfwd By end of 2011, there will be 4.6 unemployed people for every vacancy //bit.ly/9PHwZQ by @ippr's Tess Lamming >> yikes!

  11. jeff marks

    vacancies are irrelevant really. everybody that moves off welfare has more spending money and therefore needs someone to sell them goods and services.

    example: a country of 30 million and 10% unemployed. now 30 million new people arrive. after some time you will have 60 million and 10% unemployed. unemployment is about incentives (either to work or not to work). it is about market labour rates and welfare levels. we have x million unemployed not because of a lack of jobs but because x million people are better off (taking into account money, time, freedom etc) not working than working.

  12. Thomas Clark

    Whilst no one can expect a job to land in their lap it is a lie that there is a strategy to get people into work. The truth in my experience is that the system is all too happy to keep people unemployed. The truth is that this destroys self worth and makes you less employable.

  13. william

    all of this was foreseen in july ,2004, in cabinet according to david blunkett. the chancellor knew that gdp growth was going to be way below his expenditure plans, but carried on regardless.with uncontrolled immigration and 15 percent of school leavers barely literate,what else do you expect? it would help if we could have an apology from the man that abolished the economic cycle.

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  16. Mr. Sensible

    All this about a so called ‘work program’ is not matched by the economic reality.

    Tess, is it correct to say that government spending can also play a role here; if the government had kept that lone to Sheffield Forgemasters, it would be able to create jobs in the local economy there.

  17. Chris

    @william

    When & where did Blunkett say that and in what context?

    Where does your 15% figure come from, the top of your head? The UK has jumped up literacy tables, like it has for cancer survival rates and god knows how many other benchmarks. But why stop the facts get in the way of a good bit of propaganda!

  18. arnie

    @mr sensible

    the loan to sheffield forgemasters was political corruption. if it was a good business plan they’d have got the money privately.

    loan is spelt ‘loan’ by the way

    @chris the uk has dropped in most things that can be measured over the last 13 years. the nhs is worse than the equivalent in most of the newly democratic eastern european countries

  19. Unemployed find old jobs now require more skills « 4 Mainstreet

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  20. Paul Abbott

    RT @leftfootfwd: By end of 2011, there will be 4.6 unemployed people for every vacancy //bit.ly/9PHwZQ by @ippr's Tess Lamming

  21. Cameron’s recycled rhetoric on benefit claimants | Left Foot Forward

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  23. ASHWORTH FARM

    WHAT A LOAD OF OLD CRAP, ITS ABOUT TIME THESE PEOPLE UNTERSTAND WHAT IS GOING ON IN BRITAIN TODAY. A BETTER PLAN WOULD BE TO DROP 30 MILLION POUNDS OUT OF A PLANE ALL OVER GREAT BRITAIN TO HELP WITH POVERTY.

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