Get the right skill and you should have no problem getting a job...

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...or so it seems:

Job opportunities were 17% higher in December 2011 compared with the same period in 2010, and were more than one-fifth higher than in December 2009, according to figures published today by reed.co.uk. The most recent Reed Job Index data highlights growth in demand for new staff in 2011 compared with 2010. According to Reed, this trend was largely driven by demand for technical staff, such as engineers and IT and telecommunications specialists, with an annual increase in job vacancies of more than 40% across these roles.

But a couple of sectors continues to decline:

Unsurprisingly, decline was reflected in the figures for public sector activity, with demand in that sector 15% lower than during the same period in 2010, and at one-third of its 2009 level.

Meanwhile, demand for staff in financial services fell slightly in December 2011 to a little below its level of 12 months earlier, although it is still above its level two years ago when the index began.

Not surprisingly the UK can find jobs for skilled people who contribute to production and create wealth but not for parasites like me!

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The right isn't stupid - it just disagrees with your stumbling and mumbling

Apparently “the right” – of which I am a proud member – are stupid:

What interests me here is: why should the standard of rightist argument be so low - almost wilfully ignorant of opposing evidence?

And the reasons – such as they are explained – relate to several specific factors:

1. The relationship between “employment protection” and levels of employment
2. How minimum wages – especially for the young – affect the economy
3. Whether taxes and specifically higher rates of income tax impact negatively on enterprise

We’re told by this (I assume) left-inclined expert that there isn’t any evidence supporting what the right asserts.

So let’s have a look:

Here’s the International Labour Organisation (ILO) on the subject of how employment protection legislation (EPL) impacts on the labour market:

EPL is significantly correlated with certain labour market flows across countries, such as labour turnover, inflow into unemployment, duration of unemployment and the share of long-term unemployed. The stricter the EPL is, the lower the labour turnover, the higher the inflow into unemployment, the longer the duration of unemployment and the higher the proportion of long-term unemployment in total joblessness are.

So the ILO says that stricter EPL contributes to higher levels of unemployment and especially long-term unemployment. There are a load of caveats to this but it seems that “the stupid right” do have a point when they suggest that looser employment rights might have a positive impact on employment.

In the case of minimum wages the research is (I’ll be kind) all over the place. Much of this is because of ideological and/or theoretical prejudices – both for and against minimum wages. However, nearly all the research shows a small effect on employment and a bigger effect on levels of long-term unemployment especially among young people.

We find that movements in both French and American real minimum wages are associated with relatively important employment effects in general, and very strong effects on workers employed at the minimum wage. In the French case, albeit imprecisely estimated, a 1% increase in the real minimum wage decreases the employment probability of a young man currently employed at the minimum wage by 2.5%. In the United States, a decrease in the real minimum of 1% increases the probability that a young man employed at the minimum wage came from nonemployment by 2.2%.

The “stupid right” are on pretty sound grounds questioning minimum wages and in suggesting that reducing the level of such wages for young people might stimulate employment. For sure, like changes to employment legislation, it won’t solve the problem but it might help!

And the high marginal tax rates – they don’t helpeconomic growth:

This article explores the impact of tax policy on economic growth in the states within the framework of an endogenous growth model. Regression analysis is used to estimate the impact of taxes on economic growth in the states from 1964 to 2004. The analysis reveals a significant negative impact of higher marginal tax rates on economic growth.

OK it’s just one piece of research – there will be others that suggest different outcomes. Indeed, some studies on entrepreneurship see cuts in personal taxes as a disincentive to self-employment – mostly because it’s a damn sight easier to avoid taxes if you’re self-employed!

But again the research suggests that the “stupid right” have a fair point - lower marginal rates of personal tax ceteris paribus have a positive effect on economic growth. Therefore, cutting the UK’s top rate is a good idea!

None of this suggests that there aren't different policy options, different taxes and alternative appraisals of the effect that such decisions have on the economy. What I am saying is that these suggestions – lower minimum wages, less strict labour laws and low marginal rates of personal taxation – are not “stupid”.

And saying they are is well...pretty dumb, really.

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And lo, the EU creates unemployment!

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It was predicted:

Employers scaled back their use of temporary workers in the run up to the introduction of the Agency Workers Regulations, according to research by the CBI and recruitment consultancy Harvey Nash.

Thank you Europe from all those folk who won't now have a job...

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Did we have employment land strategies during the industrial revolution?

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The body that 'represents' senior local council planners - the Planning Officers Society - has been having its say on the National Planning Policy Framework. And its main criticism is that without a grand strategy on "employment land" we won't get any economic growth. Or something like that:

"...new rules would create a weakening of stipulated employment land at a local level, due to the potential for building housing on land previously set-aside for businesses, according to the POS.

‘The basis for planning for housing has not yet been clearly thought through,’ it said.

‘A local reservoir of such land is essential to facilitate the growth of small and medium-sized enterprises, to provide … employment and to attract inward investment.

Apparently under these rules Jaguar wouldn't have been able to expand as the land would have gone for housing.

Remember folks that these are the people who think they can plan our futures! Heaven help us!

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The joys of annually managed expenditure - a look at the Work Programme

The Work Programme – described often as the government’s “flagship welfare-to-work” scheme – represents an important shift in the delivery of these programmes. Rather than being funded from a limited pot of money (the “Departmental Expenditure Limit” – DEL) the scheme is funded by a demand-led approach (the “Annual Managed Expenditure” – AME).

In previous programmes the provider of service was contracted to provide a given number of “outputs and outcomes” (e.g. number of people entering the programme – and output, or people into jobs – an outcome) and remunerated on that limited basis.  Under the Work Programme the only limit, in theory, is the number of workless people – the payment to providers is set against the savings to the overall welfare budget.

There are some important elements to consider here. Firstly, the government can invest more on finding work for those people who are more expensive to maintain on benefits – single mums, disabled people. 

Secondly, the government has shifted much of the risk from the department to the provider. The payments are on results – there are few payments for outputs and much of the money comes after the client has been in work for six months, one year and two years. In principle this means that the provider has a real incentive to get clients off welfare and to keep it that way for two years.

The Social Market Foundation thinks there’s a problem – the providers aren’t going to hit the targets (these are minimum numbers) set by government:

At least 90% of organisations involved in delivering the Government's flagship back to work scheme, the Work Programme, risk having their contracts terminated because of unreachable performance targets set by the Department for Work and Pensions (DWP). The Social Market Foundation, the think tank originally behind the idea for the Work Programme and responsible for the analysis, said that without an urgent rethink of the performance criteria this could lead to the failure of the entire scheme with potentially dire consequences for the 2.4 million long term unemployed it is designed to help.

We need to understand that SMF’s analysis is based on the performance levels of welfare-to-work providers in the last government’s “Flexible New Deal” programme. Indeed, under this analysis there is a problem. However, this does rather assume that the shift from a programme delivering to a pre-determined set of outputs and outcomes to one based on payments on results will not alter the performance of providers. This seems unlikely to me.

And the people who own these businesses seem to think it’s a fair bet too as Chris Grayling, the minister concerned points out:

"The Work Programme is the biggest payments-by-results scheme of its kind in the world. The providers are investing £500million of their own money into it this year alone, and they wouldn't be doing that unless they were confident of making a real difference in getting people into sustainable employment and achieving results."

And more to the point - if the providers miss their targets, there is little or no loss to the government. So more incentive to deliver (that's where the money is) and less downside risk. Seems like a good deal to me.

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So the private sector is creating those jobs...

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Figures from dear old Monster reveal that while public and community sector recruitment has declined (along with the defence industry), overall the picture's good:

The declines in these areas, however, did not manage to spoil the overall figures, which showed positive annual growth across 15 of the 21 industry sectors measured. Topping the list was recruitment for the transport, post and logistics sector, which experienced a 36 per cent increase. 

So yes, the private is creating jobs. Just like they said it would.

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"Are there any vacancies here at the moment?"

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My wife and I were in Burtons yesterday looking (unsuccessfully) for a t-shirt. While we were perusing the clothes on offer a young woman walked into the shop and approached the floorwalker:

"Are there any vacancies here at the moment?"

The woman was looking for a job*. Now there weren't any on offer at Burton but I was cheered that this young woman saw that the way to get a job was to go out to the places that employ people and ask them whether they had need of her services.

I hope this particular young woman is successful - she shows the initiative that employers like, she was prepared to invest some shoe leather and make the effort. She probably recognises that we have no 'right' to a job - it is work done in exchange for payment received - and that jobs are pretty scarce now. And that plenty never get near to the Job Centre.

*Update - came across this while reading the Policy Exchange report on 'Fairness' (pdf):

At present, Jobseekers Allowance claimants are required to search for work but there is no fixed amount of time they are mandated to spend doing this. In fact, a recent survey conducted by two Princeton economists for the Institute for the Study of Labor, found that jobseekers in the UK spend an average of eight minutes per day looking for jobs.

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