CICERO FOUNDATION SEMINAR
UK labour market policies
- a recipe for success?
Georgina Hill
British Embassy, Paris
This presentation will cover...
• The UK labour market today
• How have we got there?
• What next?
THE UK TODAY
The UK has one of the strongest labour
markets in the world...
80%
70%
Percentage
60%
50%
40%
30%
20%
10%
0%
Canada
UK
Source: OECD Employment Outlook 2007
US
Japan
Germany
France
Italy
…with high employment across
most groups
100%
90%
80%
Employment Rates
70%
60%
50%
40%
30%
20%
10%
0%
Total
Men
Women
Young
UK
Source: OECD Employment Outlook 2007
Prime
Age
OECD
Older
Low
skilled
Medium
skilled
High
skilled
…while Unemployment and Inactivity Rates
are relatively low
10
30
8
25
6
20
15
4
10
2
5
0
Inactivity 2006
Source: OECD Employment Outlook 2007
Unemployment 2006
ly
Ita
ce
Fr
an
y
ma
n
n
Ge
r
pa
Ja
US
da
Ca
na
UK
ly
Ita
ce
Fr
an
Ja
pa
n
y
ma
n
Ge
r
US
UK
da
0
Ca
na
Percentage Inactive
35
Percentage Unemployed
12
40
At low cost: expenditure on labour
market programmes as a % of GDP
2.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
N
d
e
n
e
al
ry
lia
ay
ri a
ds
nc
ec
de
ga
lan
rw
tra
tug Aust
an
a
e
e
l
n
e
r
r
o
s
r
r
r
u
w
o
I
F
N
e
G
S
P
H
Au
et h
Source: OECD
UK
rea
Ko
US
HOW HAVE WE GOT THERE?
RESTATED OECD JOBS STRATEGY
• No single golden road to better labour market
performance
• But some common success factors, eg:
– macroeconomic stability
– incentives
– competition
Key elements that have contributed to
the success so far…
• Macroeconomic Stability
• Flexibility and Diversity
• Making work pay:
– National Minimum Wage and tax credits improve incentives
to work for low income households
• Active Labour Market Policies:
–
–
–
–
Jobcentre Plus
Rights & Responsibilities agenda
assisted job search
New Deals: employment programmes to reduce long term
unemployment through intensive tailored support/activities
TURNOVER IN THE UK LABOUR MARKET
E
3 million
E
1.65 m
2.01 m
1.29 m
U
2.13 m
1.13 m
2.01 m
E = EMPLOYMENT U =UNEMPLOYMENT I = INACTIVITY
Source: UK LFS, Longitudinal Dataset ( 2 Quarter )
I
USUAL HOURS WORKED PER WEEK
FRANCE
UNITED KINGDOM
50.0%
50.0%
40.0%
40.0%
30.0%
30.0%
20.0%
20.0%
10.0%
10.0%
0.0%
40
44
48
40
44
48
36
32
28
24
20
16
12
8
8 12 16 20 24 28 32 36 40 44 48
4
4
0
0.0%
0
Hours usually worked
Hours usually w orked
ITALY
GERMANY
50.0%
50.0%
40.0%
40.0%
30.0%
30.0%
20.0%
20.0%
10.0%
10.0%
Source: Eurostat
36
32
28
24
20
16
12
8
4
0.0%
0
48
44
40
36
32
28
24
20
16
12
8
4
0
0.0%
Hours usually worked
Hours usually worked
Temporary employment
16
14
12
10
8
6
4
2
0
US
UK
Italy
Source: OECD Online Statistical Database
France
Canada
Germany
Japan
ACTIVE LABOUR MARKET POLICIES
• Make work pay
• One stop shop: Jobcentre Plus
– links Rights & Responsibilities
– benefit payment & assisted job search
– Jobseeker’s Agreement = back to work plan
• Regular contact:
– fortnightly signing to check on progress
– regular reviews (13 weeks)
– personal advisers
– close follow-up
• Greater help & employability measures as duration increases, eg
New Deal
Jobcentre Plus
•
•
•
•
Payment of Working Age benefits
Job Services to customers and employers
Recruitment services for employers
Extra help for ‘priority’ customers, including New Deal
programmes
• Benefit fraud prevention and investigation
Jobcentre Plus Purpose:
“Work for those who can, support for those who cannot”
WHAT NEXT?
Current Considerations
• Balance between rights & responsibilities
• Boost employment to 80% and tackle longterm unemployment
• Greater use of private & voluntary sector
• Greater devolution
• Link between employment & skills
28
27
26
25
24
23
22
21
20
19
18
17
16
15
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Economic Inactivity
ILO Unemployment
Unemployment Rate
Inactivity Rate
The key problem is now economic
inactivity not unemployment…
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
1973
1971
…and because the vast majority of claimants
of inactive benefits are economically
inactive, most are not looking for work…
3,000,000
Inactive
ILO unemployed
2,500,000
In employment
2,000,000
1,500,000
1,000,000
500,000
0
JSA 18-24
JSA 25-49
50 and over
Incapacity Benefits
lone parents
any other form of IS
Sw
la
nd
K
ed
e
Ire
U
tra
l
et
he ia
rla
nd
s
C
an
ad
a
an
d
S
n
Au
st
ria
G
er
m
an
y
D
en
m
ar
Be k
lg
iu
m
Sl
F
ov
r
ak anc
e
R
ep
ub
lic
O
EC
D
N
Au
s
Ze
al
U
30
ew
35
N
n
Ja
pa
in
Sp
a
% OF THE WORKING-AGE POPULATION
…And other countries face similar
problems…
40
Other benefits
Unemployment benefits
Sickness & Disability
Old age & early retirement
25
20
15
10
5
0
What are we doing about it…?
The UK Government’s long-term aim is to
achieve an employment rate of 80% of the
working age population:
• 1 million fewer people on incapacity benefits
• 1 million more older people in work
• 300,000 more lone parents in work
• tackling inactivity and worklessness,
particularly in the most geographically deprived
areas
We have begun to make a difference amongst lone
parents and those on Incapacity Benefit…
1) Reform Incapacity Benefit, for sick and disabled:
- ‘Pathways to Work’
- including mandatory Work Focused Interviews
• Increase incentives for Lone Parents to (re-)enter labour
market:
- New Deals extended to lone parents
- Tax Credits
- transitional top-up payments to ensure work pays
• Extending working lives:
- age discrimination legislation
- increase in State Pension Age
- Age Positive campaign
Conclusions: So far so good….but there
is more to do!
• Next stage of Welfare Reform
- changes in the benefit structure
• Support for disadvantaged groups:
– certain areas, especially major cities
– some minority ethnic groups
– people with low or no qualifications
• Skills
– transition from school to work
– lifelong training
Any questions…or answers?
Department for Work & Pensions:
www.dwp.gov.uk
Jobcentre Plus:
www.jobcentreplus.gov.uk
New Deal employment programmes:
www.newdeal.gov.uk
Learning & Skills Council:
www.lsc.gov.uk