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Smoke and Mirrors over Jobs

Sound over substance. Political rhetoric requires analysis in reality how much will David Cameron’s summit at Number 10 this week boost to the economy.

It was notable that nearly half the 19 companies attending the meeting with the PM were retailers, with the 34,000 new jobs they announced making up 80% of the total.

Scratching the surface a little more, most of the ‘new’ posts had in fact been announced already, and it was not made clear how many are part-time or temporary and all are low level.Supermarkets are major employers and offer good career structures, but they won’t turn around the UK economy single – handed. The majority of these jobs will be shelf fillers or cashiers but will be dealing with disposable income rather than creating wealth.

Overall, some 42,500 new jobs were announced, and that is positive news. However this is not enough to cover the layoffs in financial services alone and doesn’t make a dent in replacing the 310,000 jobs lost in manufacturing in the recession. Dare we also mention the 330,000 redundancies to come from the bloated public sector.

Two-and-a-half million people are currently on the dole but 8 million are economically inactive which is a huge burden to carry, but headline unemployment has not been as bad as expected in this downturn. Employers have made more effort to preserve jobs, even if this has been at the cost of pay cuts and freezes or short-time working.

But not all jobs created are equal. A sacked civil servant may or may not have the transferable skills to move into a new job. Picking in a supermarket warehouse paying £12,000 is not a substitute for a skilled manufacturing job, where the average earnings are nearer £30,000.

Certain groups, including the young, who lack experience, and the old who are deemed to be expensive and lacking in vigour, are suffering disproportionately. Recent legislation will lead to positive discrimination against women, it is political madness to continually increase the burden on employers.

The signs already are that rebalancing the economy so that exports and manufacturing play a bigger role is proving easier to say than to do. Regions with a high exposure to the public sector are in the eye of the employment tornado with much worse to come.

Manufacturing is doing well: output is expected to have risen by 3.8pc in 2010 and it is currently the best-performing sector of the UK economy, the first time since World War 2.

Unfortunately that will not lead to the creation of a large numbers of jobs. The industrial firms that have survived the successive downturns have done so by investing in technology, improving productivity and employing fewer people: The average UK-owned manufacturing firm has just ten staff.

Firms are wary of taking on permanent staff in the current climate and many, including motor manufacturer Toyota, are looking to hire agency workers instead. Who can blame them when employment regulations as so hostile to the employer.

Even when manufacturers do want to beef up their payroll they face an entrenched issue of skill shortages. Where are the welders, bench joiners, CNC operators, warehousemen and care workers – they all seem to be well trained Polish Workers brought in by specialist recruiters.

Industry is paying the price now for a ‘lost generation’ of skilled blue collar workers from the 1980s, when manufacturing withered and apprenticeships fell into decline.

The UK used to be a great industrial nation. As recently as 1980, 6.6m people were employed in industry. Now that figure has dropped to 2.75m. Many of our best-known companies have been sold into foreign hands or are in the transient ownership of hedge funds.

Over the past 30 years successive governments have grappled with the question of what a post-industrial Britain will do to pay its way. We have tried consumption and housing booms, we have tried financial engineering.We need to get back to basics – wealth creation.

We need the government to come up with some better answers which have to start with a skills based education policy as we can’t all work in retail. Regeneration moves have been deferred and trying to promote growth in the teeth of a gale is an enormous challenge but this government can’t cheat the electorate as Labour did by employing the unemployable in public sector roles for which we will pay for a generation


Author: Chris Slay

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