Is Osborne right on long-term unemployment?

Today’s announcement by Chancellor George Osborne of a new “Help-to-Work” programme focused on the long-term unemployed is a mixed bag.  No doubt the talk of ending the alleged “something for nothing” culture will be a crowd-pleaser, but he has also highlighted a real and growing problem.  Whether the solution is compulsory litter-picking is another matter. 

Long-term unemployment is relatively low

Despite the headlines, the number of claimants out of work for more than two years is relatively low. While total unemployment doubled between 2007 and 2013 and now stands at more than 71,000, only 10,000 of these have been out of work for more than two years – just 0.5% of the population of working age.  That said, that more than 10,000 people have not worked for at least two years and are subsisting on a very low income IS cause for concern.

There is a shortage of decent jobs

The difficulty Osborne does not admit is the lack of decent jobs.  It is no accident that the number of long-term unemployed has rocketed during the recession – while unemployment has doubled, long-term unemployment has increased six fold. 

Not only is the number of jobs an issue, but the nature of jobs at so-called entry-level makes finding work for many people very difficult.  As well as the number of jobs falling during the recession (and it is worth remembering that it is low-skilled jobs that have suffered by far the greatest fall) there has been a marked increase in the number of part-time, temporary and variable or zero hours jobs.  Many of these jobs simply do not pay enough to live on.

In addition, few employers especially at entry level are willing to make ‘reasonable adjustments’ for a disabled employee or an employee who wants to work flexible hours e.g. for childcare.  These are luxuries more likely to be enjoyed by people in non-manual jobs than cleaners, security guards or warehouse operatives.   

People have complex needs

Osborne’s remedy for people who are out of work for a long period is described as “tough-love”, involving community work such as litter-picking, daily visits to the Job Centre, or compulsory training.  The assumption is that people lack motivation, effort and maybe some skills. 

But the position is much more complex than lack of effort. Some people who have been out of work for some time face serious difficulties finding and sustaining employment.  These difficulties are unlikely to be solved by a dose of community work or a daily visit to the Job Centre. 

In the last few years, thousands of people have been moved off Incapacity Benefit and Income Support onto Jobseeker’s Allowance.  The scale of this shift cannot be underestimated: in March 2009 there were just 915 lone parents claiming Jobseeker’s Allowance in Wales; by July 2013 there were 7,180.  An even larger number of claimants of Incapacity Benefit have been found fit for work – a massive 17,800 in Wales, although not all of them will then claim Jobseeker’s Allowance. 

At a time when there are already 70,000 people looking for work, people who may not have worked for decades and who have constraints on what they can do, whether it’s childcare or being unable to stand for a long period, let alone ex-offenders or former substance mis-users, are inevitably going to find it really difficult to get a job. 

So what to do?

I am not opposed to programmes to help people to find work. Unemployment is bad for people’s health and well-being as well as virtually guaranteeing poverty.  And after two years of unemployment and presumably having been through the Work Programme it is right that more is done to help them.

But focusing only on the supposed lack of effort by the long-term unemployed is misplaced. 

Many of those who are still out of work after two years have much more complex barriers to finding work than Osborne admits, and also face an unforgiving, competitive labour market. There is no magic wand, other than the obvious – a job, that matches their skills and abilities and that pays a decent wage.

Simples.

Victoria Winckler is Director of the Bevan Foundation