Unit 2 Macro: The Economic Disaster of Youth Unemployment
The official figures show that there are now more than one million young people counted as unemployed in the UK although the precise scale of the jobless crisis is difficult to measure accurately. Nonetheless, it represents a fundamental economic, social and political problem and one that policy makers must address.
In this video report from Al Jazeerah, Lawrence Lee visits Leeds to find a well qualified nineteen year old with good qualifications but who cannot afford to go to university and is finding it tough to win a place in the police force - his main ambition.
read more...»Unit 1 Micro: Can the UK Computer Games Industry Grow
Britain is one of the world’s biggest exporters of creative products - from live TV shows and music to books, arts, architecture and films the economy has built up an enviable global reputation for excellence and a growing trade surplus to aid our balance of payments.
Computer games falls squarely into this category but, according to TIGA - the trade association representing the UK’s games industry - unless there is renewed government support, the future of this sector is at risk. TIGA claims that the British games industry is suffering a significant ‘brain drain’ as talented programmers and artists leave the country to work abroad.
read more...»Unit 2 Macro: Living below the Breadline
This article on the appalling depth of workless households in Liverpool is a reminder of the multiple aspects of relative poverty and economic/social exclusion.
The causes of unemployment are complex - many are structural - but it is hard to draw much if any optimism from reading this article. By some estimates over one third of households in Liverpool have no one in work and second and third generation unemployment is not uncommon. This is a must article for students to read if they want a better awareness of the human cost of non-employment. Read: Below the breadline on Liverpool’s workless estates
read more...»Unit 2 Macro: A Prezi on Unemployment Policies
After a hesitant start and some time spent getting to know the user interface, I am starting to use Prezi more widely as an alternative to other presentation software. I would be really keen to share ideas and collaborate on presentations with other colleagues so if you are interested in joining up please let me know. Here is an initial presentation I used this afternoon on unemployment policies - focusing on ten strategies to reduce unemployment. The aim is to stimulate discussion among students who can take apart the proposals and substitute their own.
read more...»Unit 2 Macro: Video Clips on Unemployment
I blogged last week about unemployment and made available some updated charts on unemployment for the UK and a range of other countries. Here are some short video news clips on aspects of unemployment that I have been using when teaching unemployment to AS and A2 groups. These clips provide a window on the human and social cost of high rates of unemployment and are especially useful in reinforcing the causes of unemployment and evaluation of policies likely to be most effective in bringing jobless rates down over time.
read more...»Unit 2 Macro: Reducing Unemployment after a Recession
How quickly do people find new work after they have been made redundant and experienced a period of unemployment?
According to new research published in the May 2011 edition of the Economic Journal, only around one person in every ten unemployed in Britain finds fresh work within a month and nearly half of the extra unemployed created in the wake of an economic shock such as the fallout from the global financial crisis are still without a new job after six months.
If government economic policies and the labour market generally are failing to get people back into paid jobs the impact of a recession on unemployment rates can last for a substantial time period bringing with it increased economic and social costs.
read more...»Structural Unemployment - The Last Cast
In the spring of 2010 the iron and steel making plant at Corus in Redcar in Cleveland was mothballed seemingly ending a 150-year-old industry on Teesside and bringing with it an enormous challenge to the local labour market. BBC Teesside has produced many resources on the plant closure that will make the issue of structural unemployment vivid for students who want to understand many of difficulties of getting people back into work who have skills specific to heavy manufacturing. Here is a link to three short film clips on the impact of the Corus closure
Revision: Consequences of Unemployment
Persistently high unemployment create huge costs for individuals and for the economy as a whole. Some of these costs are difficult to value and measure, especially the longer-term social costs.
read more...»Apprenticeships for a Silver Generation
The oldest contestant in the new (6th) series of The Apprentice is thirty one! But why should apprentices be concentrated only among those in the early stages of their careers?
The number of people aged fifty and over who are applying for and winning places on apprenticeship schemes has more than doubled in the last few years as this BBC news video explains. Apprenticeship programmes for older workers challenges our common preconceptions about their place in the labour market - and this is a good thing as the debate continues about how best to support and encourage people to stay in work during these challenging economic times. Lifelong learning is not merely a vaccuous slogan - it has a real meaning and is hugely important for the British economy in the years ahead.
This video reinforces the importance of human capital, the need for flexible skills to avoid structural unemployment. And it raises questions about who should and who can fund apprenticeship schemes and their longer-term economic and social benefits.
Hundreds of jobs lost as Bosch moves from Wales to Hungary
The Bosch Group - a privately owned German multinational manufacturing business has announced the closure of it’s car parts factory in south Wales with the loss of hundreds of jobs. With 900 jobs going at the factory itself, the final scale of extra unemployment will be significantly higher because of the negative multiplier effects for the local and regional economy.
read more...»David Blanchflower on Unemployment Policies
David Blanchflower writes in the new Autumn edition of the RSA’s Journal about the help needed to avert an unemployment time bomb especially for younger workers. This piece builds on his recent talk at the RSA. It is a superb article and has some powerful sections on the economic and social consequences of high rates of unemployment.
A Case Study in Labour Mobility - 50 Jobs in 50 Weeks
Perhaps we should expect nothing less from an unemployed Economics graduate, heavily in debt who had become desperate in search of a fulfilling job. Californian Dan Seddiqui went from being homeless and unemployed to getting 50 different jobs in 50 different US states in just 50 weeks and his story is featured in today’s Daily Telegraph
“In just 50 weeks Dan tried everything from being a lobster catcher, a jazz conductor, a TV weatherman and even a Las Vegas wedding planner.” Naturally a book is on the way!
This article is perfect as a starter teaching resource when discussing occupational and geographical mobility of labour and the natural and structural barriers that prevent others doing something similar in their search for worthwhile work.
Life in the Middle - income distribution in the UK
The TUC has published a report ‘Life in the Middle - The Untold Story of Britain’s Average Earners’ surveying ‘Middle Britain’ in particular, and income distribution across the population as a whole. They define Middle Britain as the fifth of the population (quintile) which earns within 10% of the median income of about £20,000 per year for households in the UK in 2006/7, the last year when full figures are available. The results make very interesting reading, and give some good up-to-date figures on income distribution for use in A2 microeconomics papers.
Revision - Labour Market Failure (presentation)
Here is a revised streamed presentation on market failure in the labour market
read more...»Corus Steel and the Multiplier Effect
The giant steel plant at Redcar has dominated the industrial landscape on Teesside for decades. I last went round the site on a school Geography Field Trip in the spring of 2006 and, although it felt a bit like being landed back in the 1970s, there was no denying the scale of the operations and the commitment to quality in producing high-value precision steel.
This BBC article focuses on the economic and social consequences if the Redcar plant closes - it is excellent for students wanting to understanding a little more about structural unemployment and also the negative multiplier effects that come from heavy job losses in a local area. The danger is that the loss of jobs may be permanent and that the region will suffer from an irreversible loss of skills.
The article states that “So as well as the 2,000 Corus jobs at risk, there’s a supply chain equivalent to maybe 10,000 people spread around the region.”
Q&A: Why is youth unemployment so high?
Youth unemployment rates are typically higher than for the rest of the working population. Nearly 4 people out of 10 who are unemployed are aged between 16 and 24. And as our chart shows over 100,000 young people have been out of work for over a year, a figure that has doubled since 2002 although it is much lower than it was when the UK economy was coming out of recession in the early 1990s.
read more...»Retracing the Road to Wigan Pier
Paul Mason, Newsnight’s Economics Editor embarks on a journey from London to Wigan and considers the impact that a recession that is officially only six months old is having on the labour market. I used this (7 minute) piece with my AS students this week and it proved to be an evocative video clip highlighting in particular the issues of youth unemployment, structural unemployment arising from the collapse of production and jobs in the industrial heartlands of the Black Country and the hidden aspects of the downturn among the legions of self-employed, in this case the 250,000+ mini car drivers working in the UK. Paul Mason writes about his experiences here.
A related story ..... recession (depression?) in Dublin has caused a huge rise in the number of people applying for and apparently getting licences to drive taxis in the capital. This report in the Telegraph says that Dublin now has 16,000 licensed taxis. New York, with a population 17 times as large, has 13,000…... a good example to use of how macroeconomic difficulties impacts directly on localised markets.
Apprenticeships, skills gaps, information failure and training opportunities
Earlier this month the Prime Minister announced a £140m plan to create 35,000 additional apprenticeship places, of which 20,000 would be in the public sector (and 6,000 with McDonalds, making it the biggest apprenticeship provider in the UK). Lord Young, the minister responsible for apprenticeships in England, promised that those who won apprenticeships in the public sector would be able to complete their training, come what may. This article highlights the plight of a young man who has just lost his engineering workplace experience while studying with one of the largest private apprenticeship training firms in the South West of England.
read more...»Apprenticeships and Economic Performance
My Monday morning edition of the Financial Times carried an important article on the prospects for apprenticeships during the economic downturn. The broad thrust of the piece was encouraging - a number of Britain’s biggest companies have said that they do not plan to curtail the number of apprenticeship programmes on offer to school and college leavers. It is not simply a case of altruism - a number of studies have shown that investing in the human capital of the workforce can achieve a positive payback in just a few years.
“Recent studies have shown that investing in an apprentice is often cheaper than recruiting qualified workers from rivals and then having to retrain them in the procedures of their new employer…...BT had “calculated a net financial benefit of over £1,300 ($1,910) per apprentice a year when compared with non-apprentice recruitment”......A more recent study by Warwick university for the taskforce’s successor, the Apprenticeship Ambassadors Network, found that it cost £28,762 to train an engineering apprentice but the “employer’s investment was, on average, paid back in less than three years”.
Why is the success of apprenticeship schemes important for the longer-term health of the UK economy? Many of the benefits of vocational programmes show through on the supply-side of the economy:
A lower risk of structural unemployment through lower occupational immobility
Less pressure on the welfare benefits system resulting from long term unemployment
A reduction in the number of unfilled vacancies for skilled workers
Higher productivity and better paid jobs - which then boosts aggregate demand
Ultimately - higher profits for businesses with successful apprenticeship schemes
Reduced dependence on inflows of migrant workers
Better skilled workers will improve the quality of work and provide a stronger platform for greater innovation in their chosen fields
Improved customer service e.g. in industries such as gas supply, plumbing and construction
The FT article can be found here
The website of the Apprenticeship Ambassadors Network is also worth visiting
Hand outs and help ups
With unemployment already rising at an alarming rate and job prospects looking awful for the New Year and beyond, the thorny question of welfare assistance for those out of work becomes more salient by the week.
The government has announced plans for what they believe are radical welfare reforms - designed to provide a carrot and a stick to nudge the economically inactive back into the labour market. It is one thing having the motivation and the skills needed to find fresh employment in a weakening labour market, it is another to find the work that suits you best in a part of the world where you want to live. Keep in mind that - despite the recession - there are still over 600,000 unfilled job vacancies in the UK economy and many of these have been vacant for a lengthy period of time.
Tim Harford produced a timely piece on the costs and benefits of unemployment benefits in his piece for the Financial Times last week. It is a good one to read because it brings into play concepts such as moral hazard and the social consequences of people having sufficient financial resources to spend time looking for the job that makes the most of their experience and abilities.
