the road back towards full employment: sizing the uk jobs gap

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

James PlunkettResolution Foundation

www.resolutionfoundation.org@resfoundation

……………………………………………………………………………………………………..

#fullemployment

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

• 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 its

depth, not its duration• ‘Working hours have been squeezed’ – yes in some ways, not in others

How far away are we from a full jobs recovery?……………………………………………………………………………………………………..

#fullemployment

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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The number of jobs in the UK economy has recovered to pre-2008 levels

Number of jobs in the UK economyChange from Mar-May 2008, thousands of jobs

122,000 more jobs than in 2008

20082008

20082009

20092009

20092010

20102010

20102011

20112011

20112012

20122012

20122013

-1,400

-1,200

-1,000

-800

-600

-400

-200

200

Number of jobs

Jobs

(tho

usan

ds)

#fullemployment

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

But once we consider population growth, a large jobs gap has opened up

……………………………………………………………………………………………………..Number of jobs in the UK economy and UK ‘jobs gap’Change from Mar-May 2008, thousands of jobs

930,000 jobs short of 2008

employment rate

20082008

20082009

20092009

20092010

20102010

20102011

20112011

20112012

20122012

20122013

-1,400

-1,200

-1,000

-800

-600

-400

-200

200

Number of jobs Jobs gap controlling for population growth

Jobs

(tho

usan

ds)

#fullemployment

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Under any realistic scenario the jobs recovery has a long way to run

……………………………………………………………………………………………………..The UK ‘jobs gap’ under different recovery scenariosChange from Mar-May 2008, thousands of jobs

2008 2008 2009 2010 2010 2011 2011 2012 2013 2013 2014 2014 2015 2015 2016 2017 2017 2018 2018

-1400

-1200

-1000

-800

-600

-400

-200

0

Jobs gap

Jobs

gap

(tho

usan

ds)

#fullemployment

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Under any realistic scenario the jobs recovery has a long way to run

……………………………………………………………………………………………………..The UK ‘jobs gap’ under different recovery scenariosChange from Mar-May 2008, thousands of jobs

2008 2008 2009 2010 2010 2011 2011 2012 2013 2013 2014 2014 2015 2015 2016 2017 2017 2018 2018

-1400

-1200

-1000

-800

-600

-400

-200

0

Jobs gap Repeating the 1994-99 jobs boom

Jobs

gap

(tho

usan

ds)

#fullemployment

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Under any realistic scenario the jobs recovery has a long way to run

……………………………………………………………………………………………………..The UK ‘jobs gap’ under different recovery scenariosChange from Mar-May 2008, thousands of jobs

2008 2008 2009 2010 2010 2011 2011 2012 2013 2013 2014 2014 2015 2015 2016 2017 2017 2018 2018

-1400

-1200

-1000

-800

-600

-400

-200

0

Jobs gap Repeating the 1994-99 jobs boomJobs boom + public sector job cuts

Jobs

gap

(tho

usan

ds)

#fullemployment

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Under any realistic scenario the jobs recovery has a long way to run

……………………………………………………………………………………………………..The UK ‘jobs gap’ under different recovery scenariosChange from Mar-May 2008, thousands of jobs

2008 2008 2009 2010 2010 2011 2011 2012 2013 2013 2014 2014 2015 2015 2016 2017 2017 2018 2018

-1400

-1200

-1000

-800

-600

-400

-200

0

Jobs gap Repeating the 1994-99 jobs boomJobs boom + public sector job cuts OBR March 2013 forecast

Jobs

gap

(tho

usan

ds)

#fullemployment

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This time around the decline has been shallower – but is now on course to be longer

……………………………………………………………………………………………………..Decline in employment rate compared to past recessionsPercentage point fall in employment rate from onset of employment downturn

0 1 2 3 4 5 6 7 8 9 10 11 12

-6%

-5%

-4%

-3%

-2%

-1%

0%

2008

Years after start of employment downturn

Decl

ine

in e

mpl

oym

ent r

ate

(ppt

s)

#fullemployment

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Decline in employment rate compared to past recessionsPercentage point fall in employment rate from onset of employment downturn

This time around the decline has been shallower – but is now on course to be longer

……………………………………………………………………………………………………..

0 1 2 3 4 5 6 7 8 9 10 11 12

-6%

-5%

-4%

-3%

-2%

-1%

0%

1990 2008

Years after start of employment downturn

Decl

ine

in e

mpl

oym

ent r

ate

(ppt

s)

#fullemployment

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Decline in employment rate compared to past recessionsPercentage point fall in employment rate from onset of employment downturn

This time around the decline has been shallower – but is now on course to be longer

……………………………………………………………………………………………………..

0 1 2 3 4 5 6 7 8 9 10 11 12

-6%

-5%

-4%

-3%

-2%

-1%

0%

1979 1990 2008

Years after start of employment downturn

Decl

ine

in e

mpl

oym

ent r

ate

(ppt

s)

#fullemployment

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Decline in employment rate compared to past recessionsPercentage point fall in employment rate from onset of employment downturn

This time around the decline has been shallower – but is now on course to be longer

……………………………………………………………………………………………………..

0 1 2 3 4 5 6 7 8 9 10 11 12

-6%

-5%

-4%

-3%

-2%

-1%

0%

1979 1990 2008 Repeating 1990s jobs boom OBR

Years after start of employment downturn

Decl

ine

in e

mpl

oym

ent r

ate

(ppt

s)

#fullemployment

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

The UK’s ageing workforce is central to achieving a recovery in employment

……………………………………………………………………………………………………..

2008200920092010201120112012201320132014201520152016201720172018

-1400

-1200

-1000

-800

-600

-400

-200

0

Jobs gap Late 1990s OBR March 2013

Jobs

gap

(tho

usan

ds)

Aged 16+

The UK ‘jobs gap’ under different recovery scenariosChange from Mar-May 2008, thousands of jobs

#fullemployment

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

The UK’s ageing workforce is central to achieving a recovery in employment

……………………………………………………………………………………………………..

2008200920092010201120112012201320132014201520152016201720172018

-1400

-1200

-1000

-800

-600

-400

-200

0

Jobs gap Late 1990sOBR March 2013 Jobs gap 16-64Late 1990s 16-64

Jobs

gap

(tho

usan

ds)

Aged 16+

Aged 16-64

The UK ‘jobs gap’ under different recovery scenariosChange from Mar-May 2008, thousands of jobs

#fullemployment

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Working hours: there has been a shift from full-time to part-time

Popu

latio

n

Activ

e

Inac

tive

FT e

mpl

oyed

PT e

mpl

oyed

FT se

lf-em

ploy

ed

PT se

lf-em

ploy

ed

Unem

ploy

ed

1,770

1,040729

-520

29697 243

904

……………………………………………………………………………………………………..

#fullemployment

Change since 2008

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

But both part-timers and full-timers are working longer hours

2008 2009 2013

32.0

31.4

32.0

All workers

2008 2009 2013

37.1

36.5

37.5

Full-time workers

2008 2009 2013

15.6

15.2

15.9

Part-time workers

……………………………………………………………………………………………………..

#fullemployment

Average working hours

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

The Resolution Foundation ……………………………………………………………………………………………………..

• No room for complacency – full jobs recovery a long way off

• Ageing workforce is a big part of the picture

• Real wage squeeze key part of the story

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

The Road Back Towards Full Employment

Resolution Foundation

www.resolutionfoundation.org@resfoundation

……………………………………………………………………………………………………..

#fullemployment