Macmillan Next Move 1 Pupil's Book REPACK
There is great value in preserving jobs as, beyond those with very low levels of productivity, they have productive value that is hard to quickly recreate. Plus as people become fearful of job loss, they cut spending to reduce debt or increase savings. Maintaining consumer confidence and hence a recovery next year, hangs on employment. However, as many people will lose their jobs and some sectors will not return fully to pre-crisis working levels any time soon, there needs to be a broadening in the focus to cover both job creation and preservation. The government has done next to nothing around job creation so far. Any Spring Economic Package has to move beyond preserving existing jobs.
Macmillan Next Move 1 Pupil's book
Second, this stimulus should be focused on employment in the UK (not imports as with consumption). Finally, the employment support should be as far as possible targeted of where it is most needed for a jobs recovery next year. This means on the employment of young people, on the types of entry jobs that the unemployed move into (and then move on to better positions later) and where possible to meeting other objectives such as the acute environmental and housing problems.
The government has announced the bringing forward of 5 billion pounds of infrastructure spending. This is sensible policy-making as it boosts activity and infrastructure spending has substantial multiplier effects on the rest of the economy. 5 billion is not very much, however. Spending on repairing roads has the advantage of getting started quickly but more green action (alongside loft insulation) would be a programme of green energy production such as solar and where appropriate wind power on public buildings, again quick to get started. Much larger investments (offshore wind farms / tidal power) in green energy take far longer to get moving but have similar multiplier effects into the wider economy and meeting long-term needs. Supporting the move to green cars (hybrid/electric) is also attractive as the car industry is in crisis but of course, a lot of such cars are imported. The government should be looking at something more like an extra 40 billion of public infrastructure investment spend over the next two years. Housing must be a major priority. Major infrastructure projects can come with requirements for Apprentices to be taken on. This has been done before but to date, this has applied to firms, not whole sectors. Major housing investments need apprentices in building trades and so the construction sector as a whole needs to be made to step up, rather than just firms winning individual contracts.
Overall, the next phase of the governments approach needs to move from job preservation to job creation. This involves fiscal stimulus focused on employment in the areas where it is most needed to get the unemployed back to work. That is for the young, for entry jobs and areas with evidence of on-going recruitment potential. Reducing wage costs rather than jobs (targeted support through employers NI costs and minimum wages) is an obvious place to explore.
Providers primarily used one-to-one job search support with relatively little employer engagement and wider interventions such as training. A provider had a job seeker on their books for two years and on average moved 18% into sustained employment and 25% of younger workers (there has not been a comprehensive analysis of the scheme but this is the most useful piece of evidence). The scheme became more successful over time but this largely reflected the strengthening jobs recovery in this period. While placing 1 out of 4 young into sustained employment over 2 years in a strengthening labour market suggests limited success, the scheme was low cost and these types of job support interventions have generally been found to be successful in the past (as in Gateway of New Deal for Young People). The innovative elements include payments for sustained outcomes and that people who returned to unemployment re-engaged with the programme if within the two year window. 041b061a72