Arresting the cycle of unemployment in Birmingham
Not surprisingly when the Labour Market Statistics where published by the ONS last week there was a good deal of analysis about what they tell us about the current state of the economy and, in particular, job creation and unemployment.
Nationally the picture appears to be improving with the data showing that an additional 168,000 jobs were created in the last quarter (May to July) and 334,000 in the last year. However, whilst the national rate of unemployment fell by 0.1%, which is undoubtedly good news, it was noted that the West Midlands was one region where the rate went up by 0.3%.
This is clearly not good. Indeed, if we consider the data tells for unemployment more locally we see quite a picture which tells how difficult things still are.
The latest available data for unadjusted claimant unemployment in the UK in August was 4.4% just under 1.4 million people. It is worth noting that the claimant rate is the number of those claimants divided by economically active working age residents who are actively seeking work and not including students, those with responsibility for looking after families, the retired, the sick and disabled and those who are discouraged.
The figure of 1.4 million economically active claimants in August showed represented a fall which also occurred in The West Midlands and Birmingham. What is problematical is that whilst the claimant rate for the former is 5.6%, some 147,206 which was a reduction of 2,789, in Birmingham the claimant rate is 10.1% which is 46,096 and represented a fall of 316.
It is also worth noting that the number of claimant unemployed for Greater Birmingham and Solihull Local Enterprise Partnership area (GBS LEP) in August was 60,424 (a rate of 6.8%). This means that three quarters of those who are unemployed in GBS LEP are resident in Birmingham.
Of the eight 'core' cities, Birmingham has the highest claimant unemployment rate. The average for the core cities which includes Bristol, Leeds, Liverpool, Manchester, Newcastle-upon-Tyne, Nottingham, and Sheffield is 7.0% and it is to be noted that the lowest rate is found in Bristol (4.2%) and the highest, apart from Birmingham, is Liverpool (8.8%).
For the sake of completeness Greater London has a rate of 4.7%.
And when you look at the figures on an even more local level in Birmingham it is possible to see that unemployment varies significantly. The constituency of Sutton Coldfield with an unadjusted unemployment rate of 3.4% is one per cent below the national average.
Given the average for Birmingham is 10.1% it is unsurprising that there will be some areas with lower and higher rates. Nonetheless, though Ladywood has all the problems that would be associated with an inner-city constituency, the fact that its unemployment rate is 21.8% would indicate that unemployment is very localised.
In some inner-city wards unemployment is well over even 22%; Aston (30.1%), Washwood Heath (28%) Lozells & East Handsworth (26.4%) and Nechells (25.5%) and Sparkbrook (25.2%).
It will come as no surprise that these areas display all of the characteristics of deprivation and trying to deal with the consequences is no small challenge.
Any cursory examination of information on jobs available will tell you that for those with requisite qualifications and experience, especially in IT and business analysis, there is high demand. The problem is getting those without the required expectations to be willing to both 'upskill' and, in some cases, to be willing to travel.
The ONS national figures show that even though there may be more jobs available, there is an increasing trend towards part-time work.
For example, though the number of men in work is almost the same as five years ago (just under 16 million), the composition has alters so that there are now 272,000 less employed full-time (13.85 million) and 281,000 more employed part time (2.1 million). It is worth noting that though there has been a corresponding rise in the number of women employed full-time, up 39,000 to 7.94 million, the increase in those employed part-time has been 279,000 to reach 5.95 million.
Significantly the ONS notes that there are now 1.45 million people who work part-time simply because they cannot secure full-time work.
The trend towards part-time working is undoubtedly being replicated here in the West Midlands and though it may suit some, an argument made by those who believe so called 'zero hour' contracts have definite advantages, those who would prefer full-time well paid jobs will disagree.
We all know that living standards are being squeezed due to wages not keeping up with inflation (currently around 2.8%). The ONS notes that pay has only gone up by 1%.
Last week's ONS figures showed that in some occupations there has been significant expansion.
One of the occupations in which there are notably more jobs than three months ago is in real estate activity which suggests that property development is being seen as a way to make economic gain.
On one level this is good as it will feed into the construction cycle, a sector which has suffered considerably in the five years since global financial crisis which commenced with the collapse of Lehman Brothers.
However, are we going to forget that spurious property development was the cause of the problems which caused the 'domino-effect' leading to other institutions needing to be rescued; most memorably Royal Bank of Scotland?
Those who were intimately involved in the aftermath the collapse of Lehman Brothers such as former City Minister Lord Myners, Lord Turner who used to be chairman of the FSA (Financial Services Agency) and Alistair Darling who was Chancellor of the Exchequer five years ago, believe that as memories fade we are likely to allow financial institutions to return to the 'bad old days'.
Lord Myners makes plain his view that the banks are "still too big, too interconnected and too undercapitalised." Darling contends that there is there is still a prevalent culture which is based on the assumption that you can make money "out of nothing."
Though the ONS reported a quarterly increase in jobs in manufacturing, some 11,000
nationally, there are 15,000 fewer than a year ago.
We need more Jaguar LandRover (JLR) announcements to rebalance the economy away from the dependence on property speculation and financial services which has caused the misery that the majority of us (working and non-working), still suffer in terms of decreased living standards and reduced opportunities.
It is hard to see how the construction of more shopping centres and apartment buildings will create the basis for sustainable economic recovery.
Rather, what we need locally are precisely the sort of high-skill and well-paid jobs that will attract applications from the areas of Birmingham where there is greatest levels of unemployment and potential hopelessness.
This requires investment and the sort of 'joined-up thinking' with respect to industrial policy advocated by Lord Heseltine in his report No Stone Unturned when he publically launched it here in Birmingham almost a year ago.
Unless this happens all that will happen is that the cycle of deprivation and what is known as 'poverty of aspiration' will become endemic in the inner-city areas where, traditionally, manufacturing used to offer potential for advancement.