In 1993, unemployment started to fall from its peak of just below 3 million
– 10 per cent of the workforce.
At that time, the fall in the jobless count came as a complete surprise.
Even by the mid-1990s it was widely believed that the economy would never be
able to create enough jobs; all society could hope for was to ‘redefine work’.
Instead, the UK enjoyed a net rise in employment of 2.5 million people
between 1993 and the end of 2002, and recorded the biggest percentage point
improvement in unemployment of all the major economies.
There are now 27.8 million people in work – a record level. But who got the
new jobs, and can the employment rate rise even higher?
Women took a slightly larger share of the extra jobs (51.4 per cent) than
men (48.6 per cent). The female employment rate of 69.6 per cent is already at
a record high.
The male rate, however, is 3 per cent below the previous peak in 1990, and a
massive 10 percentage points lower than the record reached in the early 1970s.
Despite a decade of job creation, restoring the male employment rate to where
it stood a generation ago would thus require an extra two million men in work.
The view that new employment opportunities are mostly part-time or temporary
is wide of the mark. Full-time jobs account for 60 per cent of the rise in
employment since 1993, while the share of temporary jobs in total employment
(6.5 per cent) is only slightly up on a decade ago. The share of
self-employment meanwhile has fallen from 12.4 to 11.3 per cent.
The one trend that has been commonly correctly perceived, is the rise in the
number of service sector jobs. This has increased by well over three million
(17 per cent) in the past decade, more than offsetting the loss of around half
a million manufacturing jobs and heavy proportionate job losses in agriculture
and the energy sector.
Despite the fall in unemployment, there is no absolute shortage of labour –
according to the labour force survey, there are presently 3.75 million jobless
people in the UK who want to work. But the ranks of the jobless include many
individuals who are not in a position to easily fill vacancies.
As well as maintaining economic stability, further substantial increases in
the employment rate will therefore only be possible if better use is made of
this potential labour reserve.
This will require action by the Government and employers to ensure that
recruitment and diversity practices serve to reduce barriers to employment
related to race, age, disability and caring responsibilities. Only when such
barriers are removed, will the UK really be able to achieve ‘jobs for all’.
By John Philpott, Chief economist, Chartered Institute of Personnel and