Migration and Employment – headline numbers are not the only story

March 30, 2015, by Guest Blogger. filed under Uncategorized; No Comments.

Chris Lawton, Senior Research Fellow at the Division of Economics, Nottingham Trent University.

As someone who studies the economic and labour market impacts of migration, the NIACE Making Migration Work report is extremely welcome, as it helps move the debate on from a preoccupation with the number of immigrants coming to the UK towards a more positive discussion of how the impacts need to be addressed within the context of our post-industrial employment structure.

My view is that the UK has suffered from an over-reliance on ‘bad’ jobs since the decline on manufacturing in the 1970s and 80s. The ‘knowledge workers’ who have flourished since then are less likely to be concerned with migration – it is the lower skilled workers, often in areas left untouched by the growth of high-value services, who feel most negatively affected – even though the proliferation of poor quality jobs with limited opportunities for training and personal development preceded the sudden increase in EU migration in 2004.

Over the last decade, a large proportion of the UK media, alongside those politicians who have adopted an anti-immigration stance, have responded to every new estimate of migration in the same way. Any increase is presented as a disaster, with increasingly catastrophic language as we approach the General Election on May the 7th. The headlines accompanying the latest Quarterly Migration Statistics were predictable. If the UK has become, as David Cameron stated, the ‘jobs engine of Europe’, it is hardly surprising that it is drawing in people from recession mired European countries keen to meet that demand.

A few weeks later, the Government’s Office for Budgetary Responsibility (OBR) demonstrated that their forecasts for growth and employment depended heavily on maintaining recent levels of net migration. Current and expected future levels of migration add 0.6 percentage points per annum to the OBR’s growth forecast (bringing their forecast for GDP growth in 2015 to 2.5%). The respected think tank the Institute of Fiscal Studies (IFS) has supported the view for some time that a reduction in net migration would lead to reduced economic growth.

So if migrants – and especially EU migrants – make an important contribution to both economic growth and UK public finances (and on which there is a high level of consensus amongst specialists in various fields) why is the belief that migration is ‘bad’ for the UK economy so widely accepted? With no evidence of the existence of significant ‘benefit tourism’, the issue comes down to education, skills and quality of employment – for both migrants and non-migrants. And this is another area where the headline numbers drive the debate, distracting us from the stories behind those numbers.

Employment for both migrants and non-migrants has become increasingly polarised as the economy has recovered. Jobs in the middle of the skill hierarchy – especially the Skilled Trades, already in long-term decline – have shrunk faster, whilst occupations at either end have increased. The headline employment numbers also disguise the fact that UK employment has become increasingly part-time and casualised – again for both migrants and non-migrants. Although the latest data shows that total employment in the UK has increased by 2% on the last year, the number of self-employed people working part-time has increased by 6% and the number of people on temporary contracts has increased by 5%. The TUC have described the growing phenomenon of casualised and vulnerable self-employment as the ‘the rise of the odd jobbers’ – not just ‘Polish builders’, but UK-born IT technicians forced to become self-employed consultants, older males having lost jobs in manufacturing or construction becoming taxi drivers or window cleaners: avoiding unemployment, but trading down on their skills.

During the recession and the initial period of uncertain recovery, policy makers stopped worrying about the long entrenched problem of the ‘quality’ of employment in the UK. Although many commentators in the media continue to obsess over the numbers of migrants each year, the increase in the total number of people employed across the UK has further distracted attention away from the quality of many of these jobs. Yet experiences of the quality of work and people’s negative perceptions of migrants are intimately connected. It is no surprise that some of the local areas where migration is a particularly contentious issue, including Nigel Farage’s target constituency of Thanet, are areas that have experienced significantly below average levels of migration. Less than 9% of the resident population of Thanet were born outside the UK according to the 2011 Census, compared to a national average of 14%. Quality of employment is a significant challenge for such areas, and migrants are an easy scapegoat, whether they are present in any great numbers or not.

The UK continues to be over-reliant on low pay, low skill jobs – thus it is inevitable that many migrants will come to the UK to meet this demand. An ambitious economic development and industrial strategy – that addresses skills, business support, enforces employment regulation and incentivises fair wages will help to finally improve the quality of many jobs whilst simultaneously allowing us to be less concerned about the quantity of year-on-year migration.

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Dangerous times for the Apprenticeship programme

March 12, 2015, by David Hughes. filed under Uncategorized; 2 Comments / Comment on this.
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There are many employers offering great Apprenticeships for people who will get a great start to their career, with the support they need to progress to better jobs and to become lifelong learners. Those are the employers who also benefit from great staff who will help improve productivity and business success. And then there are others where the experience of the apprentice is not so good.

This reality doesn’t seem to matter to the politicians from across the parties who are wedded to supporting Apprenticeships. Perhaps they have been seduced by the many excellent examples of how Apprenticeships do support good outcomes. But I am worried that the support for the programme is unrealistic. The claims for what ‘more apprentices’ will deliver is long: improved productivity, reduced youth unemployment, greater social mobility, business success, economic growth and so on. For all of these, apprentices do contribute, but the programme will not solve them on its own and yet the programme seems to be the only investment in skills which is being prioritised outside of higher education.

For all of us who worry about inclusive growth, I think there are three areas where we should focus our thoughts and efforts:

  1. Defining what Apprenticeships deliver and how they fit with other training and education.
  2. Quality and the success measures for the programme.
  3. Access to Apprenticeships and inequalities.

So what is an Apprenticeship? I like the short definition in the Remaking Apprenticeships report from City & Guilds: an Apprenticeship is a job with significant inbuilt learning designed to prepare the apprentice for future employment, employability and active citizenship of a high quality. There is a lot in there worth unpacking. The focus on learning both formally and informally, the focus on the outcomes of a job and a career and the clear return on the investment for the Government of supporting people to be active citizens. I’d like to see all Apprenticeships being about this, supporting people to aspire and be ambitious about what they can achieve, how far they can go. I think that’s what employers want from their employees.

So if that’s what we want Apprenticeships to be about, how does the quality measure up? Well, I’m clear that some employers offer this to a very high quality and have senior staff who have had good careers after starting out as an apprentice. But there is a lot of evidence that the experience for too many is not good enough. For instance a recent survey found that a third of those on the Apprenticeship programme didn’t even know they were an apprentice. Not a great measure of quality and there are other signs such as declining success rates and a quarter of 16-18 year old apprentices paid below the minimum wage.

The big problem though is that we don’t know enough about the experience of apprentices (where is their voice in the reforms?) nor about the outcomes of the programme. The measures of success used do not include key outcomes such as how many apprentices end up with a job, go onto further learning and gain higher wages. That should change and needs to change if we are to sell Apprenticeships to young people, parents and their advisers as well as to more employers.

So how well does the Apprenticeship programme do on equality and diversity? Sadly, the programme seems to echo the inequalities which already exist in the labour market. Around 9% of apprentices are from BME backgrounds compared with 15% of the population; gender stereotyping of ‘male and female roles’ is rife; and access to Apprenticeships for people with disabilities is poor. The figures are not good and perhaps more worryingly, we don’t have a strong policy push or funding and measures like there are in higher education for instance. In HE we have OFFA, widening participation and retention budgets policies and significant budgets from HEFCE and universities being focused on greater equality of access and achievement. Surely we need that for Apprenticeships as well?

As a sector these three issues – definition, quality and access – do matter and it is critical that we focus on them with the new Government in its early days. I want the Apprenticeship programme to carry on receiving the support it now has, but for the right reasons and in a fit state to offer every apprentice a great experience and to genuinely set them up for a fulfilling career and life.

NIACE is calling for the introduction of an Apprentice Charter to raise the quality and equality of Apprenticeships. Policy-makers, employers, providers and apprentices are invited to make comments on the initial proposed approach.

 

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How the Citizens’ Curriculum supports engagement in city life

February 25, 2015, by Guest Blogger. filed under Uncategorized; No Comments.
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In our latest blog from one of the NIACE Citizens’ Curriculum pilot sites, Munawara Sattar and Hoshna Huda from Leicester College explain how a Citizens’ Curriculum approach is benefitting learners who have recently migrated to Leicester. 

Many of us walk through the city centre and don’t take time to stop and enjoy our surroundings, or think about its past.  If we are new to the city, we might not even be aware of its history, what the city centre has to offer, or perhaps lack the confidence to explore the attractions, opportunities and the possibilities.  However, learners on our Citizens’ Curriculum course were delighted to be given the chance to find out more.

Working with recent migrants to the city, Leicester College’s Citizens’ Curriculum pilot combines English for Speakers of Other Languages (ESOL) with health, digital, financial and civic capabilities to enable them to make the best start to a new life in a new country and a new city.

As part of the civic capability strand of the course, tutors and three groups of learners braved the cold and undertook a fact-finding trip of Leicester City centre.  The purpose of the trip was to develop learners’ understanding of the historical backdrop of Leicester, the diverse range of faiths in the city and to encourage pride in being a citizen of the city. The trip took us through the historic part of the city, starting at the Clock Tower, onto Leicester Cathedral, Newarke House museum, the Jain Centre and the Buddhist Centre.  We learnt about the industrial past, the story of Richard III and the Great Wars, and about the history of immigration to Leicester.

All the learners agreed that they had experienced parts of Leicester they had never seen before.  It was great to see them feel empowered to go into local buildings they were previously afraid to visit. The best part was finding out that many went back to the local attractions independently, this time with friends and family.

The Citizens’ Curriculum approach allows tutors to respond to the needs and interests of the learners, who play a crucial part in shaping the course content.  The city centre trip is one example of the value of this, but it can be seen in other parts of the course too.  For instance, in the digital and financial capabilities strands, the learners expressed an interest in an online lift-sharing scheme, offering the possibility of affordable travel.  They are now developing the language and digital skills to find out more about how they can use the internet to access these types of ‘sharing-economy’ initiatives.  This isn’t just about saving money of course – it’s clear that, as with the city centre trip, the Citizens’ Curriculum has the potential to bring about greater civic engagement to benefit everyone.

How do you think a Citizens’ Curriculum benefit learners in other settings? How would you use it?

 

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Local Approaches to Boosting Earnings

February 24, 2015, by Guest Blogger. filed under Uncategorized; No Comments.

Damien Conyngham-Hynes is a Policy Advisor in the Cabinet Office’s Cities and Local Growth Unit specialising in labour markets and skills. In this blog, Damien details three innovative ideas that could help people increase their earnings through work.

What is the challenge?

Low pay continues to dominate the policy debate in the UK, and rightly so. Whilst the employment rate at 73.2% is at record levels (1) and wages for people who have remained in continuous employment have, for the most part, continued to rise in real terms(2); for some people – particularly those who lost their jobs during the recession – this has not been the case. For instance, it remains the case that over half those living in poverty live in a household where someone works (3).

The issue is one of progression as well as low pay. Almost three quarters of workers who were low paid in 2002 were still in low paid work a decade later. And whilst 46% of these workers did experience high pay at certain points during the decade, cycling between low and high paying jobs, 27% never earned above low pay during that time (4). This figure is significantly worse for some groups, including lone parents and people with disabilities.

These issues have a significant human impact, but they also have a striking fiscal impact. Improvements to the welfare system are expected to save money – Universal Credit alone is projected to save £20.7 billion through higher earnings for people moving into employment and reduced spending on benefits (5). However, there remains scope for improvement. For instance, a recent report suggests that if all UK workers earned the living wage – the wage rate required to provide workers with a basic but acceptable standard of living – the Treasury could achieve gross savings of up to £3.6 billion a year through increased tax revenue and lower spending on in-work benefits.

Structural drivers

Long-term structural trends have contributed to the current low pay-low progression equilibrium.

Stagnant productivity levels and an increasingly polarised labour market are two of these trends. UK output per hour worked in 2013 was 17% lower than the average for G7 countries, and 30% behind the US (7). As productivity is, in the long run, the main determinant of living standards, this marks a worrying trend.

At the same time, increased globalisation and rapid technological advances have led to a growth in both high-paying and low-paying jobs, coupled with significant falls in middle income jobs (8). This pattern of polarisation further entrenches low levels of progression by removing the middle-income jobs that low paid workers may progress into.

Three proposals to counteract the trend

One of the Government’s key policies aiming to tackle this issue is Universal Credit. By ensuring that people are always better off the more they work and by simplifying the system by introducing a single taper, people are incentivised to find and progress in work. This is a positive move; although on its own may not be enough.

NIACE’s proposals for a National Advancement Service in its latest report is innovative, not least because it makes the case for how skills investment could contribute to efforts to boost earnings (9). However there are a number of additional ways to improve the existing system, and the Government is testing these approaches through City Deals and Growth Deals. These include:

  •  Tweaking existing programmes to include metrics for progression. The Work Programme’s focus on long-term outcomes is a positive step, but providers should be paid in part for improving their participants’ earnings (10). Through its City Deal, Plymouth have been testing this approach using a randomised control trial to assess how to boost the earnings of young people who have found work through the Work Programme. More radically,  in the future there may be scope for a structural move towards implementing earnings programmes rather than employment programmes. In this case, providers’ primary focus would be on improving earnings for participants, with employment used as a mechanism to achieve this goal.
  • Developing estate-based employment and progression programmes. For residents of deprived estates, there is evidence that housing provider-led employment initiatives can support residents of deprived estates to find and progress in work. The Jobs Plus programme, previously delivered in the US, offered residents financial incentives to work, alongside employment and community support. The scheme was very successful. Tenants’ yearly earnings increased by 6.2% compared to the control group, and in the three sites that did not experience any implementation issues, the figure was 14% (11). These gains continued even after the programme ended. The Black Country, through its City Deal, is piloting a similar approach to reducing welfare dependency in two areas of high unemployment. Further testing and  evaluation of this model in a UK context should be a priority.
  • Generating stronger evidence of ‘what works’. Whilst there is significant evidence of what works in helping people find employment, there is little robust evidence of what works in helping people progress in employment. The previous Employment Retention and Advancement pilots in the UK showed evidence of earnings gains for participants, but did not identify which interventions caused this improvement. A commitment to more sophisticated piloting to generate robust impact evidence at scale should be prioritised so that future policy makers and providers can identify which interventions or combinations of interventions work in the coming years.

The UK labour market’s twin challenges of low pay and low progression are significant but not insurmountable. By improving existing programmes, introducing well-targeted additional support and joining up Whitehall silos, they can be overcome.

1 Office for National Statistics – Statistical Bulletin: UK Labour Market, February 2015
2 Emmerson et al – The IFS Green Budget (Institute for Fiscal Studies, February 2015)
2 MacInnes et al – Monitoring Poverty and Social Exclusion 2013 (Joseph Rowntree Foundation, 2013)
4 D’Arcy, Hurrell – Escape plan: Understanding who progresses from low pay and who gets stuck (Resolution Foundation, November 2014)
5 National Audit Office – Universal Credit: progress update (26 November 2014)
6 Lawton, Pennycook – Beyond the bottom line: The challenges and opportunities of a living wage (IPPR, Resolution Foundation, 2013)
7 Office for National Statistics – Statistical Bulletin: International comparisons of productivity – First Estimates, 2013 (October 2014)
8 Goos, Manning – Lousy and Lovely jobs – The rising polarization of work in Britain (Review of Economics and Statistics, 89)
9 NIACE – No Limits: From getting by to getting on (February 2015)
10 Ben Galim, Krasnowski, Lanning – More than a foot in the door: Job sustainability and advancement in London and the UK (IPPR, 2011)
11 Bloom, Riccio, Verma – Promoting work in public housing: The effectiveness of Jobs Plus – Final report (MDRC, 2005)

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Progression Starts With Entry

February 20, 2015, by Guest Blogger. filed under Uncategorized; No Comments.

Charlotte Pickles, Senior Research Director at Reform

Responding to the publication of ‘No Limits: from getting on to getting by‘, Charlotte Pickles, Senior Research Director at leading think-tank Reform discusses how we can address the specifics of unemployment and progression:

Earlier this month, DWP Director General Jeremy Moore told a Reform conference that Britain is very good at getting people into work, but more needs to be done to help people progress once there. This is certainly true for the bulk of people making the transition from benefits into work, though more needs to be done to support those with more complex barriers. Nonetheless, whatever its political make-up, an incoming government will inevitably make in work “progression” a key priority. No Limits: from getting by to getting on is a timely and important contribution.

However, within this, we need to be clear what exactly it is we’re trying to address. Discussions about low pay, low hours, low skill jobs can miss the fact that each of these elements may benefit from specific reforms – and that for many, getting on the first rung of the employment ladder remains the most pressing issue.

Take low skills. To state the obvious, this is not just a problem of progressing in the labour market, but of joining it in the first place. ONS analysis of the 2011 census data shows that fewer than half of those with no qualifications are in employment, versus eight in ten of those with at least one qualification. It is absolutely the case that helping people to increase their skills should enable them to progress in work, but, as any Work Programme provider will tell you, better integration between skills and employment services is needed just to get those furthest from the labour market on the first rung.

Addressing low pay as its own problem is also key. Of course we want entry level jobs to provide a stepping stone to increased earnings, but we also want those jobs to pay a fair wage in themselves. The Government currently pays out around £30 billion in Tax Credits, the vast majority of which goes to working families. Tax payers are subsidising employers paying wages deemed too low for families to survive on. With one in five workers earning less than a living wage, government and business should be looking at their respective roles and responsibilities in tackling this. Reducing the Tax Credit bill might also enable greater investment in the sorts of services that NIACE are arguing could help people progress.

In a Universal Credit world these issues become all the more important. The distinction between “in work” and “out of work” benefits is blurred, with those in work not deemed to be earning enough subject to conditionality. A new approach to employment support is needed that (a) ensures a more seamless offer of support from unemployment to progression and (b) introduces support for those in work but needing to earn more (through increased earnings and/or hours). A payment by results model linked to increased earnings (or a reduction in Universal Credit entitlement) would therefore appear sensible.

There is no doubt that a personalised approach which integrates the current set of fragmented services is the right way to proceed. Nor that services should be offered via “trusted” agents. The National Advancement Service is therefore certainly worth testing, all the more so given the limited evidence-base for what works to enable progression.

However, whilst we must embrace ideas and initiatives that seek to move people from “getting by to getting on”, we must not lose sight of the need to support people to move into work in the first place. Work is itself good for people, clearly “good” work is even better.

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