The economy’s down, where are the jobs?

Tuesday, January 24th, 2012 - Article, Employment News


The economy’s down,

where are the jobs?

Through the looking glas…

If you are educated, everywhere…

There’s a lot of economic data that comes our way in January, and at the end of it there is the annual shagri-la for the rich, famous and politically connected in Davos to talk about how they are going to save us all.

Here’s the problem: in four years, the politicians might have saved us from the worst of the possible affects of a 1930s style global recession Mk2, but they have not yet turned the corner for the simplest of reasons. They have not yet sorted out the banks. Its like the world economy is holding on to us by our belt and braces and not letting us fall, but neither is it allowing us to make a sure and secure step on the ladder of recovery.

Hence small data is having a big effect on the media. So when we are in a fragile world state and small issues make big differences, should we be surprised by words of doom and gloom and more recession?

Lets try to get this all in perspective. That after is is the point of this post, and actually the outlook is good in many places of the world of employment.

Firstly, lets go back to the Millenium, because economically that’s about where most of the Western economies are right now, again. Except, unemployment is higher, about double numerically.

Did anyone starve en-mass in 2000? Did anyone not drive a car? Did a few people lose a bit of money? Yes, it was the year of the Millenium bug and the following dot.com boom. The problem since that time was that in the west, the economic boom was fueled by a gigantic debt bubble, that took eight years to grow and collapsed in less than 18months. What’s the legacy? Record levels of national government and personal debt that will take a decade and more to pay off.

But let’s go back to the Millenium. What has also happened since then? In 2000, UK population was just over 58M, while at the end of 2011 it was just over 62M. Part of that growth was brought about by the retired people who had emigrated to Spain coming home when their house prices collapsed, and part by a reduction in similar people looking to make the same choice. But much of that growth has been in the immigrant population, coming in mainly from the EU.

What jobs did these immigrants fulfill? Again there is a lot of data to support this, but it seems quite simply that they fulfilled in the main the low-paid, factory and service sectors jobs. Back in the 1950s, these would be have been the jobs fulfilled by those leaving school without many qualifications, and progressing into apprenticeship schemes. Now they have been fulfilled by immigrants, who are degree level qualified. If you were an employer, which job applicant would you take? Secondly, with all these job applicants and resultant competition, the price paid for these workers can only do one thing: fall. The simple answer to immigration in the last ten years has been an increase in the amount of competition, and hence a fall in wages relative to the overall economic growth.

But, to allow for 4million extra people in the United Kingdom, overall employment must have gone up? Simply, it has. So much as though the number of unemployed is at a numerical high, the percentage number of people looking for work is not at a high. In fact its not even close – yet. What could or will drive it there?

Simply the shift from the government sector fueled growth of the past 13 years, to the private sector focus that is needed to rebalance the economy. At present, because of the lack of certainty around the Eurozone and the lack of lending from the banks – of which there are about a third less in the UK presently compared to four years ago – the private sector is not growing at the required rate to keep unemployment low(er).

It’s that word rebalance which sums up our current situation, and which – rightly – economists hate. Economists, like volcanologists, are great at predicting that something could happen, they are just not sure when. Hence why they moved their turned around predictions from early 2012, to late 2012, to now late 2013.

So is all gloomy?

If you are sat in a situation where by you have no qualifications, and have no prospect of getting any qualifications, then yes. However, for anyone else, there’s some good news.

Last year, the UK exported more cars than at any time in its history. Now, I am a fan of classic bikes, and this statistic just blew me away. The great days of Austin, MG and the like pale into insignificance versus the might of Jaguar LandRover, Toyota, Rolls Royce, Bentley and Nissan, which is presently the largest car factory by product produced ever in the UK, yes even more productive than Longbridge at its peak. Also, don’t forget Ford, which now produces all of its diesel engines for European production in UK at plants in Bridgend and Dagenham.

But listen to these and similar hi-tech employers, and what do they all complain about? A lack of skilled workers!  Surely that can not be true?

A few years ago, when I started looking seriously at starting a business in the recruitment sector, I came across a first version of the list of skills from MAC, the Migration Advisory Committee. This is a committee made up of employers, educators, trade unionists, politicians and civil servants who, post the introduction of the points-based immigration system in 2007, where to advice the Borders & Immigration Agency on the medium and long term need for skills in the UK. B&I were to take this information, and turn it into points: the greater the need for skills, the more points, and hence the further around the globe that the employer could advertise for a vacancy. But what shocked me of this list, was the breadth of skills allowed to be recruited from outside the EU:

  • Welders
  • Jockeys
  • Teachers – English and science
  • Doctors
  • Social workers – specialising in child care services
  • Chefs

If you want to read the full report, all 252 pages of it, then you can read it here.

So should we all be gloomy? I am still amazed that people read the media headlines over the reality of their sector in job search, but then my day job is in recruitment.

The simple answer is that MerKozy need to sort out the Eurozone, and the UK the government need to sort the banks.

But in the mean time, there is still a lot of employment and empty vacancies out there, above whatever the Births, Deaths and Marriages column of your local rag, or the headline writers at the Daily Mail may want you to think.

Life moves on – Good Luck!

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