When Prime Minister Gordon Brown shakes hands with President Obama in Washington this week, the state of the economy will be foremost in both leaders’ minds. Given that UK economy was among the first to head into recession following the credit crunch that clearly started in the US; it seems appropriate that Gordon Brown’s should be the first European leader to enter the White House with Obama to try and lead the recovery.
In a sign of how intertwined our economies have become; both countries share the same challenges, not least in the jobs market. And these are reflected in the first comparison of Labour Market Outlook surveys conducted in the UK by the Chartered Institute of Personnel and Development (CIPD) and in the US by the Society of Human Resource Management (SHRM). It finds a marked similarity in the scale and nature of recent job losses in both countries. Both surveys report recession-related job cuts of a similar magnitude, although it seems from our data and official data that the UK economy is experiencing its jobs downturn between three to six months later than the US.
The SHRM LMO survey reports that 1 in 3 US employers cut jobs in the final quarter of 2008, similar to the proportion of UK employers planning job cuts in the first quarter of 2009 according to the CIPD. However, the SHRM survey suggests slightly fewer first quarter US job cuts – with 1 in 5 employers planning to cut jobs – which, if the similarity of experience continues, might indicate that the worst of the current UK jobs cull could be over by Easter.
Both LMO surveys show that the manufacturing sector is shedding staff at a higher rate than the rest of the economy, followed by private sector services. Both surveys also indicate that managers and professionals are being relatively hard hit.
So what does this mean for UK employment prospects in 2009 and beyond? Well, for that we first need to look at the US official data to give us a rough guide as to what might happen here. In proportionate terms the 2.6 million jobs lost to the US economy in 2008 is in line with the CIPD’s expectation that the UK economy will shed at least 600,000 in 2009. We have also seen US unemployment rise faster during the past six months than at any time since the start of the credit crunch, with the rise affecting men more than women. This is not surprising given that the sectors most affected by the credit crunch are male-dominated, such as manufacturing and production, construction and finance. This looks set to become a bigger feature in the UK economy too, but it would be wrong to treat this recession from the perspective of any particular gender.
In similar vein, our country’s leaders need to look beyond the perspective of their own countries given the global nature of it. Much is often made of the ‘special relationship‘ between the US and UK; a term used to reflect the close military cooperation between the two nations. Both leaders now need to use this relationship to reiterate their mutual opposition towards protectionism and support for public investment to prevent even more job losses on both sides of the Atlantic.
So, who did you want to win? Alex, JLS or Eoghan or maybe none of the above. Being a musician, but one who has tended not to watch the weekly X Factor episode; I was quite looking forward to settling down to Saturday night’s finale. Who could but fail to enjoy the spectacle and drama of a competition that puts young, talented people in the spotlight in such a high-pressured environment? And how refreshing is it to see young people portrayed in a positive light with shared interests and goals – a lesson for our public policymakers and a business opportunity for Facebook perhaps?
Anyway, in spite of the hyperbole and clichés that came from the presenter Dermot O’Leary; I was later treated to a couple of great performances from Alex, who deserved to win hands down.
However, when I heard that over 100, 000 people applied for this year’s competition and 8 million people voted, I started to dwell on a few concerns; most notably whether we are selling the right dream to our children. For so much effort and attention, the fact remains that we have only two stars - namely Will Young and Leona Lewis – to show for several series’ worth of Pop Idol. Is this a sign of the times, and does education risk becoming sidelined with kids’ preoccupation with becoming a Premiership footballer or a Pop Idol? Pop Idol is fine, but I could not help but think that we need a junior version of a talent contest that promotes skills that are more relevant to the workplace; such as a public speaking competition for instance.
In fact, I wouldn’t mind so much if Pop Idol might encourage more people to take part in music. But if we were to use the participation rate in sport, which has declined in the past decade, against the increase in sports TV coverage; I fear that the reverse may be true. It seems to me that the watching is getting in the way of the doing; which has implications for the health and the well-roundedness of our next generation.
What is perhaps equally resonant with recruiters across the country, is the alarming gulf between the expectations of those entering the competition. Tens of thousands of our young people clearly think they have a realistic chance of becoming musical stars. Not normally one to agree with Prince Charles, I am reminded of his comment a few years ago that "I'm all for raising expectation and encouragement but there also has to be a good dose of realism."
Earlier, this year, the CIPD organised a breakfast with the Schools Minister, Jim Knight and many CIPD members. And what was the dominant theme to emerge from the discussions? Yes, you’ve guessed it; managing the high expectations of school-leavers. What is more, the minister was really struck by the example of an employer who reported that the punctuality and attendance levels improved considerably following the decision to make drama compulsory at the feeder local school.
So while we should encourage our young people to be ambitious; it is up to parents, broadcasters, schools and employers to work together to ensure that our young children are doing and achieving rather than gazing at unattainable stars.
When Gordon Brown stated at the last Labour Party conference that he wanted British jobs for British workers, it raised many eyebrows given the massive influx of migrant workers in the past decade. Immigration more than trebled between the 90s and 2005, and this is largely down to the higher numbers of migrant workers that have arrived on these shores from eastern Europe. Government actuarians predict that the UK population will see further sizeable increases to the UK population in the next few decades; all of which made the latest official migrant worker statistics very interesting reading.
It showed that migration from eastern European countries has hit a three-year low. This is yet another indicator of worsening labour market conditions; but it is not an indicator that the job prospects for British workers will brighten dramatically because of the so-called migrant worker drain.
Firstly, the figures only tell a part of the story; they only calculate the numbers coming into the country, but not the number of those leaving. But on this measure alone, the figures still show that the UK still continues to attract foreign workers. The point is that we are starting from an extremely high base. This is particularly true of young foreign workers. During the most recent quarter of this year, 28,000 workers aged between 18 and 34 came into the UK; which equates to more than 100,000 workers during a year if current trends continue.
At a time when unemployment is expected to rise sharply in the next year, which will have disproportionately negative impact on younger workers; one wonders whether the benevolent image of the Polish worker might change.
However, we should resist this given the advantages of the availability of migrant workers. The migrant worker influx during the past decade has benefitted consumers and public service users due to lower labour costs and employers who have benefitted from a bigger, more educated, and it is argued, more productive pool of labour. The Government meanwhile maintains that immigration contributes £8 billion to the UK economy.
And let’s not forget that while the biggest winners are the immigrants themselves; let us hope that the government measures announced in the pre-budget report (see John Philpott blog for full analysis) and the drop in migrant worker numbers will mean that British workers take advantage of the British job vacancies.