This article originally appeared in The Telegraph on the 28th August 2023, you can find the article here.
As we begin a new political year, with Parliament returning briefly in September, the party conference season in October and the King’s Speech in November, politicians will be keen to demonstrate they understand the concerns of voters.
Whether it’s the economic challenges facing the country, the state of the NHS, or migration, we will be bombarded by speeches and announcements designed to reassure and persuade the electorate as we enter the final buildup to next year’s general election.
One issue which too few policymakers are focused on is employment, specifically unemployment, worklessness and job displacement. Along with low interest rates, a strong labour market is something we have taken for granted for some time.
Since May 2010 the British economy has drawn 3.7 million more people into employment – a phenomenal achievement. Today there are 32.9 million people over the age of 16 in work, a level never achieved before. And in the summer of 2022, there were just 1.2 million people unemployed, the lowest number in a generation.
Our performance has bettered many international competitors. We have a higher employment rate than both the EU and OECD averages – and the US and Ireland too.
The benefits generated by this jobs boom are considerable, not least, according to figures from the Department for Work and Pensions, the proportion of children growing up in a workless household falling by a third, from 16pc in 2010 to 10pc in 2022.
But this progress is now in jeopardy. Last week, data from the Office for National Statistics showed a significant rise in unemployment, with almost quarter of a million more people unemployed than at last summer’s low point, and the number of job vacancies has fallen for the 13th consecutive period.
Moreover, the Bank of England’s latest Monetary Policy Committee report forecasts the rate of unemployment to reach 5pc in 2026, up from 4.2pc today.
The problem of general worklessness has also worsened since the pandemic: 8.7 million people aged 16 to 64 are out of the labour market altogether – 323,000 more than in January 2020. A lot of these people (2.6 million) are out of work due to long-term health issues – almost a third higher than in April 2019.
Added to this mix, we live in an age of job displacement thanks to the Fourth Industrial Revolution.
The scale of the impact of robotics and AI varies according to the source.
A seminal paper published at Oxford University in 2013 by Carl Frey and Michael Osborne suggested nearly half of all US employment was at risk of computerisation. McKinsey estimates up to 800 million jobs worldwide could be lost by 2030, but also believe that many will be replaced by jobs using the new tech. And the most recent Future of Jobs report from the World Economic Forum suggests that 25pc of all jobs globally will be disrupted somehow by new technologies in the next five years.
We should not forget how utterly destructive unemployment can be on both a personal and a national level.
Unemployment can have serious negative effects on someone’s mental and physical health, with people out of work often experiencing a loss of self-esteem and social isolation.
Researchers have consistently pointed to a link between unemployment and drug use, and then an increased probability of criminal behaviour. UK prison service analysis shows that the overwhelming majority of people sent to prison were unemployed before they were sentenced, and too often remain unemployed after release.
Female unemployment has been shown to increase the rank injustice of male-on-female domestic violence.
Children suffer from parental unemployment too. Children with unemployed fathers have been shown to have worse mental and physical health outcomes in late childhood and adulthood. They perform worse at school and have lower rates of employment as adults.
Employment does not feature prominently on the political agenda at the moment, because it has not yet broken into the top political concerns of those crucial swing voters that all politicians will be targeting over the coming year.
But I hope that away from the sloganeering and soundbites, policymakers will renew their focus on it as an issue. Moreover, I hope they recognise the crucial importance of the business community and entrepreneurs as the ultimate antidote to unemployment.
Between January 2010 and January 2020, the private sector was responsible for all of the net increase in British employment. As the public sector shrank, the private sector grew by one-fifth.
These businesses don’t need any top-down centralised incentives to create these jobs. They need the freedom to do so.
And when it comes to AI – an issue set to be a hot topic this autumn – the Government and Opposition should see it as an opportunity to improve the supply-side capacity of the economy, and employment prospects.
In 1769, an entrepreneur from Lancashire called Richard Arkwright patented the spinning frame which reduced the cost and increased the productive capacity of textile mills. Arkwright was denounced as an “enemy of the working people”, a mob destroyed his mill in Chorley, and he was socially ostracised.
But in time, the spinning frame went on to change textile manufacturing in Britain, helping spur the Industrial Revolution and this country’s emergence as the most powerful economic force in the world, bringing more jobs and greater wealth for everyone.
We need to ensure that this generation’s Arkwrights are fostered, encouraged and allowed to succeed, to create the jobs that will ensure we prosper both as families and as a country.