The Road Back Towards Full Employment: Sizing the UK jobs gap

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Resolution Foundation analysis of the size of the UK jobs gap. First presented at event on The road back towards full employment 23 May 2013 http://www.resolutionfoundation.org/events/road-back-fuller-employment/
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  • 1. The Road Back Towards FullEmployment:Sizing the UK jobs gapJames PlunkettResolution Foundationwww.resolutionfoundation.org@resfoundation……………………………………………………………………………………………………..#fullemployment
  • 2. ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………• Different (and easier!) question:– How far have things fallen since 2008?– How long might a recovery take?Challenges accepted wisdom:• ‘The jobs recovery is well under way’ – there’s a very long way to go• ‘The hit to employment has been far weaker in this recession’ – only in itsdepth, not its duration• ‘Working hours have been squeezed’ – yes in some ways, not in othersHow far away are we from a full jobs recovery?……………………………………………………………………………………………………..#fullemployment
  • 3. …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..The number of jobs in the UK economy has recoveredto pre-2008 levelsNumber of jobs in the UK economyChange from Mar-May 2008, thousands of jobs122,000 morejobs than in 2008-1,400-1,200-1,000-800-600-400-2002002008 2009 2010 2011 2012Jobs(thousands)Number of jobs#fullemployment
  • 4. ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………But once we consider population growth, a large jobsgap has opened up……………………………………………………………………………………………………..Number of jobs in the UK economy and UK ‘jobs gap’Change from Mar-May 2008, thousands of jobs930,000 jobsshort of 2008employment rate-1,400-1,200-1,000-800-600-400-2002002008 2009 2010 2011 2012Jobs(thousands)Number of jobs Jobs gap controlling for population growth#fullemployment
  • 5. ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………Under any realistic scenario the jobs recovery has along way to run……………………………………………………………………………………………………..The UK ‘jobs gap’ under different recovery scenariosChange from Mar-May 2008, thousands of jobs-1400-1200-1000-800-600-400-20002008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Jobsgap(thousands)Jobs gap#fullemployment
  • 6. ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………Under any realistic scenario the jobs recovery has along way to run……………………………………………………………………………………………………..The UK ‘jobs gap’ under different recovery scenariosChange from Mar-May 2008, thousands of jobs-1400-1200-1000-800-600-400-20002008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Jobsgap(thousands)Jobs gap Repeating the 1994-99 jobs boom#fullemployment
  • 7. ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………Under any realistic scenario the jobs recovery has along way to run……………………………………………………………………………………………………..The UK ‘jobs gap’ under different recovery scenariosChange from Mar-May 2008, thousands of jobs-1400-1200-1000-800-600-400-20002008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Jobsgap(thousands)Jobs gap Repeating the 1994-99 jobs boomJobs boom + public sector job cuts#fullemployment
  • 8. ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………Under any realistic scenario the jobs recovery has along way to run……………………………………………………………………………………………………..The UK ‘jobs gap’ under different recovery scenariosChange from Mar-May 2008, thousands of jobs-1400-1200-1000-800-600-400-20002008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Jobsgap(thousands)Jobs gap Repeating the 1994-99 jobs boomJobs boom + public sector job cuts OBR March 2013 forecast#fullemployment
  • 9. ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………This time around the decline has been shallower – butis now on course to be longer……………………………………………………………………………………………………..Decline in employment rate compared to past recessionsPercentage point fall in employment rate from onset of employment downturn-6%-5%-4%-3%-2%-1%0%0 1 2 3 4 5 6 7 8 9 10 11 12Declineinemploymentrate(ppts)Years after start of employment downturn2008#fullemployment
  • 10. ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………Decline in employment rate compared to past recessionsPercentage point fall in employment rate from onset of employment downturnThis time around the decline has been shallower – butis now on course to be longer……………………………………………………………………………………………………..-6%-5%-4%-3%-2%-1%0%0 1 2 3 4 5 6 7 8 9 10 11 12Declineinemploymentrate(ppts)Years after start of employment downturn1990 2008#fullemployment
  • 11. ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………Decline in employment rate compared to past recessionsPercentage point fall in employment rate from onset of employment downturnThis time around the decline has been shallower – butis now on course to be longer……………………………………………………………………………………………………..-6%-5%-4%-3%-2%-1%0%0 1 2 3 4 5 6 7 8 9 10 11 12Declineinemploymentrate(ppts)Years after start of employment downturn1979 1990 2008#fullemployment
  • 12. ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………Decline in employment rate compared to past recessionsPercentage point fall in employment rate from onset of employment downturnThis time around the decline has been shallower – butis now on course to be longer……………………………………………………………………………………………………..-6%-5%-4%-3%-2%-1%0%0 1 2 3 4 5 6 7 8 9 10 11 12Declineinemploymentrate(ppts)Years after start of employment downturn1979 1990 2008 Repeating 1990s jobs boom OBR#fullemployment
  • 13. ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………The UK’s ageing workforce is central to achieving arecovery in employment……………………………………………………………………………………………………..-1400-1200-1000-800-600-400-20002008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Jobsgap(thousands)Jobs gap Late 1990s OBR March 2013Aged 16+The UK ‘jobs gap’ under different recovery scenariosChange from Mar-May 2008, thousands of jobs#fullemployment
  • 14. ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………The UK’s ageing workforce is central to achieving arecovery in employment……………………………………………………………………………………………………..-1400-1200-1000-800-600-400-20002008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Jobsgap(thousands)Jobs gap Late 1990s OBR March 2013Jobs gap 16-64 Late 1990s 16-64Aged 16+Aged 16-64The UK ‘jobs gap’ under different recovery scenariosChange from Mar-May 2008, thousands of jobs#fullemployment
  • 15. ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………Working hours: there has been a shift from full-timeto part-time1,7701,040729-52029697 243904PopulationActiveInactiveFTemployedPTemployedFTself-employedPTself-employedUnemployed……………………………………………………………………………………………………..#fullemploymentChange since 2008
  • 16. ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………But both part-timers and full-timers are workinglonger hours32.031.432.02008 2009 2013All workers37.136.537.52008 2009 2013Full-time workers15.615.215.92008 2009 2013Part-time workers……………………………………………………………………………………………………..#fullemploymentAverage working hours
  • 17. ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………The Resolution Foundation……………………………………………………………………………………………………..• No room for complacency – full jobs recoverya long way off• Ageing workforce is a big part of the picture• Real wage squeeze key part of the story
  • 18. ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………The Road Back Towards FullEmploymentResolution Foundationwww.resolutionfoundation.org@resfoundation……………………………………………………………………………………………………..#fullemployment
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