We recently posted an item on our website about unemployment and living standards in our constituency, Leeds North West. Here we turn our attention more widely to Yorkshire and the Humber. This has been made possible by the publication of the Yorkshire and the Humber Jobs and Opportunities Bulletin (July 2013).
The threat and the fact of unemployment in Yorkshire and the Humber is a very serious one. The Coalition’s austerity programme has hit our region harder than some more affluent areas in the south of the country. No surprise there!
The evidence from across the country is clear. Five years after the global financial crisis and economic crash and with three years of coalition slash and burn policies, the UK has 2.5m people unemployed – 8 per cent of the labour force – including almost 1 million young people aged 16-24. The proportion of people who are in work has fallen since the onset of the financial crisis at the end of 2007. Wages are stagnating while the cost of living goes up. As many as one million people are on zero-hours contracts.
Against this backdrop we focus our attention on the over 5 million people who live in Yorkshire and the Humber.
First – the stark facts about unemployment.
Government economic policies are hitting jobs very hard in the region:
• A quarter of a million people in Yorkshire and the Humber are unemployed, the third worst regional unemployment rate in the country.
• More than one in twenty of the working force is claiming jobseeker’s allowance (JSA).
• The number of people receiving JSA for more than two years has more than doubled since May 2010.
• Unemployment at present in the region stands at 9%, against the country’s average of 8%. Only the North East and the West Midlands currently fare worse. This figure includes 105,000 unemployed women, a 10,000 increase on last year.
• Unemployment levels which rose sharply during the recession have stayed high thanks to government economic decisions since 2010. The number of unemployed people aged 25-34, for example, has risen every year since the crash from 44,000 to 62,000.
• The areas that have fared the worst include the Parliamentary constituencies of Bradford West which has the 7th highest rate of claimants of unemployment benefits in the UK (12.1%) and Kingston upon Hull West and Hessle which has the 13th highest rate (11.3%). This is in contrast to some areas of the region, which have a significantly lower claimant count. The percentage of people claiming jobseeker’s allowance in Sheffield Hallam, the seat of Liberal Democrat leader, Nick Clegg, stands at 2%, 85% lower than Bradford West.
• In each of the two years to May 2013, the number of people in the region aged 25-49 claiming jobseeker’s allowance for over two years more than doubled, reaching 14,800. The most recent figures show that there are five JSA claimants in Yorkshire and the Humber for every jobcentre vacancy.
Second, the impact on living standards.
Government economic policies are damaging living standards in the region:
• Average full-time real wages have fallen sharply in Yorkshire and the Humber since 2010, by an average of £2,000 for every full-time worker. Some areas have seen much greater falls than the regional average. In the East Riding, real wages have fallen by £3500.
• Women in Yorkshire and the Humber are taking the brunt of the fall in living standards with even nominal wages falling.
• Yorkshire and the Humber now has the second highest rate of part-time workers of any region. In addition, there are now over 140,000 temporary workers, two-fifths of whom want a permanent job but can’t get one. Recent publication of zero-hours contract employment estimates suggests that the situation is even worse than we thought.
Third – the young people of Yorkshire and the Humber are paying the heaviest price.
Government economic policies are hitting the youngest hardest in our region:
• 100,000 young people in Yorkshire and the Humber are now unemployed, making up 42% of all those unemployed in the region.
• The number of young people claiming unemployment benefits for over a year has tripled since 2010.
• Almost one in five young people in Yorkshire and the Humber are ‘NEET’ (not in education, employment or training), including 10% of 16-18 year-olds.
• The number of young people spending a long time on unemployment benefits has risen dramatically. Over 9,500 JSA recipients under 25 in Yorkshire and the Humber have been claiming unemployment benefits for over a year – more than three times the number that were doing so when the government took office.
• Of those young people who are in work, too many are employed on zero-hour contracts, the number of 16-24 year-olds on zero-hours contracts nationally has more than doubled since the start of the economic downturn to 76,000 in 2012. Recent revelations of the number of companies using zero-hour contracts suggest that the correct figure is much higher.
Why, then, is unemployment so bad?
Ed Balls, the Shadow Chancellor, has always argued that the Coalition government has sought to cut the deficit too far and too fast. He showed that the deficit was, in historical terms, not particularly deep and that Britain was very well placed to repay international debts. The Tories claimed economic difficulties as an excuse to cut the welfare state, privatise the NHS and the school system and pauperise the most vulnerable, including the disabled. The Tory-lite Lib Dems were happy to go along with this.
The Chancellor and his Lib Dem sidekick, Danny Alexander, claimed that jobs lost in the public sector would be replaced by those in the private sector. Has this happened?
Well, public sector jobs have been lost and some private sector jobs have been created.
However, as we explained in a previous posting, ‘The State, Enterprise and the Mystery of the Unemployment Figures’ the present published statistics are misleading. Many of the private sector jobs include those where workers are underemployed (i.e. they want more hours) and are on part-time contracts.
More seriously, many people are employed on zero-hour contracts. Remember, those employed on zero-hour contracts do not appear in the unemployment statistics.
Most worrying, there are about one million people who are long-term unemployed. Our northern regional economies are particularly vulnerable to the Government’s economic policy because the public sector is a major component here.
Of course Osborne and Alexander say, ‘Ah, you see. It is all Labour’s fault. They spent too much and didn’t regulate the banks sufficiently tightly.’
We will say nothing more about the fact that the then-Shadow Chancellor Osborne criticised Labour for regulating the banks too tightly.
But the charge that this is Labour’s fault must be rebutted – and you shouldn’t just take our word for that.
A recent research paper by Simon Wren-Lewis, the respected Oxford economist, argues firmly that Labour got the recession economics spot on and the Coalition got it completely wrong. Wren-Lewis argues:
‘The Labour government had two key fiscal decisions to make: by how much, and by what means, to try and stimulate the economy … and how quickly to plan to correct the deficit caused by the recession and any countercyclical action it took … my own view is that the government was absolutely right to try to use fiscal policy to mitigate the impact of the recession, and it was also right to plan to correct the deficit relatively slowly.’
Essentially, Wren-Lewis* argues that instead of taking money out of the economy, as the Coalition did, it would have been better to stimulate the economy in selective ways to stimulate growth – as Ed Balls has consistently argued. Taking money out of the economy only made it worse.
This is not an academic discussion – on the basis of such decisions jobs are made or lost.
However, as we have argued before, the decision was not taken on economic grounds but on ideological or political ones.
The Tories and the Tory-lite Liberal Democrats just wanted to reduce the size of the state and they’ve succeeded in doing that.
In the process they’ve destroyed jobs and reduced living standards.
They’re continuing to do so – and regions like Yorkshire and the Humber are paying a heavy price for their right-wing economic dogmas.
*A longer discussion of Wren-Lewis’s argument here.