Society should place a firm limit on the amount of time we are prepared to tolerate anyone being unemployed, writes IPPR’s Graeme Cooke.
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Graeme Cooke is an associate director at the Institute for Public Policy Research (IPPR)
Long term unemployment has more than doubled since the start of the recession. As Graph 1 shows, the number of people out of work for more than a year has risen from around 400,000 in 2007 to reach 855,000 in the three months ending in January 2012.
The majority of people who lose their job find another one fairly quickly, even in a recession – but those who suffer a prolonged period of unemployment risk losing touch with the labour market and face permanently reduced work and income prospects, not to mention the detrimental health and social impacts of being without work.
Graph 1:
Tomorrow’s labour market statistics are likely to see the jobless total rising on a quarterly basis for the ninth consecutive month and the Office for Budget Responsibility (OBR) predicts the unemployment rate will increase to 8.7 per cent by the end of the summer.
With a total of 2,666,000 people already looking for work, IPPR analysis suggests the unemployment total will rise by a further 100,000 in the coming months. As other respected analysts have shown, this is both unnecessary and damaging – both to individual’s lives and the national economy.
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• Ignore Osborne’s spin; a jobs recession is inevitable 1 Nov 2011
• IMF: Cutting the deficit too fast causes higher unemployment 19 Sep 2011
• Labour market weakness continues – while help for long-term unemployed is cut 13 Oct 2010
• The questions that George Osborne must answer 17 Nov 2009
Based on the OBR projections and current patterns of unemployment flows and durations, IPPR also expects the number of people out of work for a year to go up by a further 107,000 by the end of the year to hit almost a million – 962,000.
This is the ‘hidden crisis’ of the current era of stagnation that the British economy is experiencing.
With the economy likely to just about avoid a double-dip recession, there is no immediate reason to expect the headline unemployment total to spike. But neither is there sufficient growth for unemployment to fall.
In this situation, with the public sector continuing to cut jobs and new job opportunities in the private sector relatively scarce, the penalty for being out of work for longer rises – compounding the original problem.
The big worry is whether, when stronger job growth does return, people who have experienced long term unemployment will be able to take advantage. Our society is still grappling with a disastrous legacy of this kind from the 1980s and 1990s recessions: high levels of worklessness, poverty and benefit spending.
There is already some evidence a similar problem might be being stored up again. Before the recession about one in five unemployed people had been out of work for a year. That proportion is now up to a third (during a period when the denominator in that equation has been rising rapidly).
And while there has rightly been a strong focus on youth unemployment, it is worth noting that more than two-fifths (43 per cent) of the over-50s who are out of work have been unemployed for more than a year.
The government’s response to this problem is its flagship Work Programme. It is too early to tell how effective this policy is being, though there is no obvious dent in the unemployment numbers despite provider contracts being up and running for many months now.
Concerns have already been raised about the likely effectiveness of the Work Programme and even under the best possible performance scenarios, less than half of people going through it will find sustained employment.
So what happens to those who don’t?
At the very least, the government should introduce a job guarantee for those reaching then end of their Work Programme placement without a job, who would at that point have spent three years out of work.
This should provide 25 hours of paid employment, combined with on-going support and job search, which individuals would have to take up or face losing their benefits. It would effectively create a time-limit on JSA.
As we learn more about how well providers are getting on, the debate about the best way to prevent the human and economic tragedy of long term unemployment will sharpen; IPPR believes that while the state, private and charitable sectors all have a vital role in supporting people into work, society should place a firm limit on the amount of time we are prepared to tolerate anyone being unemployed.
49 Responses to “We need a firm limit on the time we are prepared to tolerate anyone being unemployed”
Eric Greenwood
Ok Graham.. I challenge you have you experienced these work programme schemes.. How do you explain they are ineffective. It is easy for you who has probably never experienced true unemployment, the true attitudes of employers towards the unemployed. But once again its another Blame the unemployed for not getting jobs. THERE ARE NO JOBS.. If you check some of teh figures there are far more unemployed but are not on JSA, or even on the job centres books. or the underemployed.
I Challenge you again Graham, Live like the unemployed for a month. try applying for hundreds of jobs, and not even getting a reply, because they are getting 200 plus people applying for the same job.. So lets punish the unemployed for the failure of employers to hire them.
It must be nice to live in an ivory tower.
Anonymous
Why are constructed jobs, which will destroy real jobs and wages “central” to anything but the Labour centralists? It’s definitely NOT left-wing thinking.
The entire POINT of his post is about removing benefits after a period, which can then be pushed to shorter and shorter periods. Never mind that in other countries, the time-limited benefits for losing a job are, again, % salary and NOT a quarter of the minimum wage…
Golookgoread
What sorts of guaranteed jobs are we talking about here… whatever the language being used? Currently under the Work Programme rules, when somebody has finished two years with the Work Programme, then the Jobcentre can send the unemployed person onto Mandatory Work Activity… in effect these are the same kind of jobs as somebody who has been issued community work through the criminal justice system.
I am discriminated by job agencies on the grounds of my age. I do not receive replies from employers primarily because of my age (53yr).
As for myself, I struggled to do everything in my power to achieve my very reasonable ambition to have a fulfilling career… in my case it was as in adult education. At the end of my career, I do deserve to be guaranteed a job which ignores my hard-worked for achievements (i.e: what once used to be my ‘potential’). In a job market where job agencies are NOT regulated (hence they automatically filter unemployed people aged 50+).
Employers are not taking older people, they are not offering the apprenticeships, re-training. I can type at 55+ words per minute (in English, Spanish & Italian), I hold two Higher Education qualifications and a dozen Vocational Certificates which I worked damned hard to obtain… I am still not competitive in todays’ job market even with those… do I really deserve to start again from scratch, doing elementary dead-end work for below the minimum wage?
Who would you like me to be Mrs Bridges? Rose? Lily? From “Downstairs” because I really took an unintentional tumble from “Upstairs”, a modest working-class “Upstairs” it was hence, after three years I should accept a modern equivalent of domestic servitude, which my 20th Century ancestors rejected in order to have more fulfilling jobs in offices and factories instead? Or should I willingly sign up to go to war instead? How many 50yr+ olds are getting internships in charities these days? How many 50yr+ olds are getting past the entrance to the reception? “What guarantee? What job? Even charities are discriminating against older career changers by hiring City workers on secondments! All employers want the equivalent of “convenience ready-meals” in the people they are hiring, so the job agencies keep telling me about their clients’ needs.
So… wage discrimination, class discrimination, re-training discrimination, all these kinds of discriminations get swept under the carpet if after three years I haven’t successfully found an employer? “I think I have just about lost the will to live” What a fascist country this my country has become.
KMJ
Frm earlier 2nite: We need a firm limit on the time we are prepared to tolerate anyone being unemployed: http://t.co/KgOHI8Ad
Denise Andrew
We need a firm limit on the time we are prepared to tolerate anyone being …: Long term unemployment has more t… http://t.co/JP3jkWLX