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The race to the bottom goes on

SimonHaskel.jpgSimon Haskel on the reality of employment in the UK behind the government’s top-line numbers

“There are lies, damn lies and statistics”. That’s my attitude towards a debate initiated in the Lords today on employment levels.  

The level of employment has to be considered, not just in terms of numbers and the economy but also the human aspect. Its effects, both on people and on fairness in our society. 

There was a time when the government was going to create employment by means of an industrial strategy – and one that would balance the economy and the country. It says so in the Coalition Agreement: higher tech growth, skilled jobs, advanced technology, lower North/South divide. This has manifestly failed.  

Yes we have growth, but it is based on increased consumption, on a property boom, and on trading in finance – a zero sum game which benefits a few. Trading in goods and services benefits us all.  The employment level has gone up but in a way that reflects this failed industrial strategy. 

As a recent report from The Resolution Foundation makes clear, some 5 million of UK workers meet the definition of low pay set by the OECD. We have a higher proportion of low paid jobs than most OECD countries. Of course low pay in many of these jobs is topped up by the government through the tax system, so giving people a chance to makes ends meet; and at the same time keeping up the employment figures. However, instead of subsidising low pay, the government should be encouraging people to run their businesses better, helping them to raise productivity so they can pay a living wage.

Then there is the matter of productivity. In February, the Office of National Statistics gave its final productivity estimates. Last year, the output per hour in the UK was 21% below the average for the rest of the major G7 industrialised economies. It was also lower than the previous year, and 3% below the level in 2007 – the year before the recession.  

What this all demonstrates is that the Coalition has maintained the high level of employment thanks to the high number of low paid jobs needed in a low productivity economy. A strong indicator if there ever was one that we are in a race to the bottom.

Is this how we are going to pay our way in a globalised economy? Is this how we are going to cut down on the number of immigrants? People needed to do all the low skill, low paid entry level jobs. Is this how we are going to build up our exports to deal with our balance of payments and borrowing?  Even with rising levels of employment, is this the kind of leadership which inspires growth and innovation or delivers a fair society? 

Successful leadership means that people have to think that you believe in what they believe.  If they think that all you care about is the numbers then you’re in trouble. And the kind of insecurity and inequality we’re now witnessing means social and economic trouble.  

Lord Simon Haskel is a backbench Labour Peer in the House of Lords

Published 20th March 2014

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