Archives for category: Labour market

At the Conservative Conference Cameron repeated his call for the ending of Housing Benefit for those aged under 25 years (see my post for 25 June 2012).  He did not name Housing Benefit, or what will be the housing component of Universal Credit, in his speech instead he said:

‘There are still over a million young people not in education, employment, or training.

Today it is still possible to leave school, sign on, find a flat, start claiming housing benefit and opt for a life on benefits.

It’s time for bold action here.

We should ask, as we write our next manifesto, if that option should really exist at all.

Instead we should give young people a clear, positive choice:

Go to school. Go to college. Do an apprenticeship. Get a job.

But just choose the dole? We’ve got to offer them something better than that.

And let no one paint ideas like this as callous.

Think about it: with your children, would you dream of just leaving them to their own devices, not getting a job, not training, nothing?  

No – you’d nag and push and guide and do anything to get them on their way… and so must we.

So this is what we want to see: everyone under 25 – earning or learning.’  (Cameron, 2013)

Nonetheless,  it is widely reported that the intention is to remove Housing Benefit from those aged under 25 years. For example, the BBC reports:

A Conservative source has told the BBC the manifesto will definitely contain a
commitment to end the automatic entitlement to housing benefit for the
under-25s, as suggested previously by Mr Cameron.

This re-announcement does not make sense in terms of the Party’s stated aims.  First, it wants to reduce worklessness, it wants young people in employment or education.  Yet geographically the job market has hot and cold spots.  If young people in an area of high unemployment want paid work they might wish to move to areas where there are jobs.  This proposal would make this very difficult as entry level jobs for the young tend to be low paying.  Put simply, Cameron’s policy would stop some youngsters gaining work by restricting them to jobs within commuting distance of their parents/guardians home, but there may be a lack of employment opportunities locally.

Secondly, the Party wants to be business friendly.  Yet a measure that reduced job mobility penalises employers – the pool of young people to recruit from is smaller.  Where the job market is buoyant, employers may have to pay higher wages as young people can no longer afford to move to such areas and compete for work.

Thirdly, the Party believes that employment is meant to pay – hard working youngsters should be better off in work than on the dole.  Yet the low wages associated with entry level jobs mean that under 25s will find it difficult to be better off in employment without support to cover their housing costs.

The proposal is irrational in terms of the Conservatives Party’s stated ambitions.  This then raises the question of why (repeatedly) make the proposal?  The simplest explanation is that it is for party political/ideological reasons.  There is no strong interest group representing young people, politically they are an easy target.  So-called ‘tough decisions’ would involve tackling the causes of the high cost of Housing Benefit – the lack of affordable rented accommodation.  Now addressing that, would have made sense!

There have been claim and counterclaim about whether the number of people in employment in the UK has risen or fallen since the General Election in May 2010.  The debate is usually in terms of number of jobs, but any comparisons are made difficult by some people working full-time, others part-time and by some people having more than one job.  A more revealing approach is to look at actual hours worked.  Here the news is less good for the prime minister.

Total weekly hours worked in May-July 2010 (which cover the election) were 921.3m, and in Sept-Nov 2011 (the most recent figure) were slightly lower at 916.3m, a fall of 0.5 per cent.  So whilst the numbers do go up and down over time, the labour market appears to be more or less where it was when Cameron came to power.  Not quite what was promised!

The ONS data going back to the beginning of the recession are graphed in this spreadsheet:  Hours worked chart jan 2012.xls