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No Jobs For The Masses In The New Economy Despite University Education


by Ian R Thorpe.

No matter how leaders like David Cameron and Barack Obama try to talk up their economies or assure voters the jobs market is improving, growth returning and unemployment will soon start falling, the truth is change does not equal progress and forcing the pace of social change has only masked the true depth of economic and social problems. One of these is unemployment and particularly joblessness among the young. Even a universdity education does not provide a guaranteed career path.

No Jobs For The Masses

There has been a lot of wailing and gnashing of teeth from most of the usual suspects on the "progressive left" (for progressive left rational people should read authoritarian right) about record levels of unemployment in the 16 - 24 demographic (demographic is progressiveese for social group). One point universally missed by the wailers and gnashers of teeth is that youth unemployment is nothing new. It has been climbing every single year since 2001. There are full statistics here; in 1990, 10.4 per cent of those under 25 were unemployed. Last year, it was 19.6 per cent. I'm not sure that the headline figure released yesterday is directly comparable to the eurostat number, but this year, it is 21.6 per cent. Since 2007, things have got much worse, of course, as they have in all countries. But in the UK this has been an acceleration of a trend, not a new one entirely.

Youth unemployment was even higher until governments of both political colours cooked up the scam of hugely expanding higher education. Up to the mid 1970s about 15% of school leavers in Britain went on to higher education. By the late 1990s we had Mr. Smarmy Tony Blair bleating about how our education system was failing they young if they did not all get a university education and setting a mid - range target of 50% of young people staying in education to get degrees. His plan of course was to keep more 16 - 25 year olds off the unemployment figures for a few years.

To consider "youth" unemployment as a single, homogenous problem is a gross oversimplification. An the OECD study of youth employment in Britain in 2008 reported:

"Highly qualified young people fare better on the labour market in Britain than do their counterparts in many other OECD countries. But low-skilled 16 to 24 year olds in the United Kingdom perform below the OECD average, the OECD report makes clear. In 2005, the ratio of low skilled to high skilled youth unemployment rates stood at almost five to one, the second highest in the OECD."

Translated to plain English, the brightest here do better than in other countries, but those who do less well at school do worse. That's hardly surprising. In this country still we have some world-class schools and universities. The expensive and exclusive private schools such as Eton and Winchester (ironically these are called public schools because when they were granted their charter by medieval kings any member of the public could enroll their sons so long as they could afford the fees.) Some of the old Grammar schools, in Britain the schools that take brighter pupils from eleven to eighteen, went private and still provide excellent education too. Oxford, Cambridge, Edinburgh and the various colleges of the University of London consistently score top in world ranked universities. For a graduate of these alma maters there will always be work available somewhere, whether it is in a bank (still going), or in Japan teaching English. But at the same time, we also have a state run school system which self-evidently fails many students who leave at sixteen lacking basic literacy, numeracy and social skills. As the British Chambers of Commerce very succinctly puts it, many of our school leavers (and even many of our university graduates from the "new universities" or glorified polytechnics) are "fairly useless". A qualification in being "fairly useless" is hardly going to help anyone get a job (more graduates, less graduate jobs).

The standard solution proposed is to try to increase skills. For the last fifteen years the government has been pushing the STEM (Science, Technology, Engineering, Maths syllabus in the fond belief that depriving pupils of cultural awareness will position our nation to move boldy forward into the new technological age. If this new technological age is analysed critically however, rather than being eulogised by technology geeks, it becomes clear technology is a job killer rather than a job creator. A current controversy concerns the plight of independent bookshops now that e-books have arrived as a viable proposition. Booksellers were already suffering because of online sales and supermarket chains cutting prices on popular titles. With the advent of Kindle and other e-readers more than half of those that remain are likely to close within two years.

The Government has been pushing a plan to increase the number of trade apprenticeships which, as well as providing a non academic or not entirely academic route to secure employment are also intended to offer remedial training for children who can't read and write. This second part of the plan undermines the first, apprenticeships used to be for electricians, carpenters, plumbers, construction skills, engineering trades, mechanics, printers and such specialised trades, to lump these in with remedial education is not going to attract a high calibre of entrant. More worryingly, the government's outsourcing of job centres with perfomance related payments to contractors passing their targets for getting people into work has provided an incentive for managers and staff to force young workers to spend weeks working for no pay supermarkets in the hope that they will learn the skills of shelf-stacking or carrying boxes. On the political Right, MPs call for the suspension of the minimum wage for young workers: the logic being that at £6 an hour, the young are priced out of jobs. The important thing is to get them onto the "job ladder", from where it is presumed that they can rise. The left naturally strongly oppose this and argue that the government should create public sector jobs for everybody.

An article by Aditya Chakrabortty points out that in 1979, manufacturing employed 6.8 million people in Britain. Today, we produce almost as much, and yet the sector employs just 2.5 milion people. Robots and Chinese people have taken over the sorts of jobs that 16 year olds could get without any qualifications straight out of school and work in for a lifetime. The only jobs left for the under-educated, or often just the less academic, are in service industries: serving coffee, cleaning toilets, stacking shelves. These jobs are not the first rung on the ladder. There is no ladder; no one hopes to work in Pret a Manger for life. In one of my previous articles on this topic I had one commenter smugly inform me that the answer is for people to specialise. Sadly he had missed the main point of the article that it was the specialists who were being squeezed. Carrying boxes and stacking shelves is hardly a specialist skill.

As Chakrabortty notes and I have observed many times in my UK blogs, the Labour Prime Ministers between 1997 and 2010, Gordon Brown and Tony Blair chased a fantasy of the "knowledge economy". They believed that if they invested enough money in education, we could become a nation entirely of software engineers, 3D computer game designers, lawyers, academics, scientists and Goldman Sachs bankers. Unfortunately, it's rubbish. Just as not everybody is suited to academic pursuits and wee will always have people whose natural abilities are better suited to practical tasks, so society will never have need for so many professionals and academics. And only a fool or an ideological dreamer could delude themselves that China, Japan, India, the Arab world and emergent nations of Africa, South East Asia and South America and, or even from the Eastern European would have to few highly intelligent and educated young people to meet the needs of their jobs market and thus would be forced to buy in suck skills from Britain.

One of the most difficult problems for our society is what can we offer those people who simply don't fit into the high tech modern economy? Ever worse pay and ever longer lines of unemployed people shuffling aimlessly around like the epsilon semi morons of Aldous Huxley's Brave New World cannot be a long term solution. Even if we have the resources, relying on an ever shrinking proportion of the population for the taxes which clothe, house and feed the rest as well as funding government vanity projects and caring for a larger population of elderly people is not politically or economically sustainable.

To talk of protectionism, of keeping jobs at home in the domestic market, is politically unfashionable but it may be necessary. Globalisation has failed, Barack Obama and David Cameron may make windy speeches about free trade and when they tell Chinese and Indian audiences of the advantages of opening their markets to the west the listeners will nod, smile and applaud politely and then carry on doing things the way they always have. I recall a story from the days when Margaret Thatcher was busy exporting British jobs to the east and destroying whole industries. While the Iron Lady was tearing up import controls on Japanese cars claiming she had secured a treaty with Japan to allow British cars into the Land of the Rising Sun, it was reported that indeed the Japanese the Japanese had scrapped their import quotas. Britain could send as many cars as we liked to Japan where our quality and sports cars were in demand. When those cars arrived however they were subject to a forensic inspection by a small team of Japanese customs officers which required each car to be taken to pieces, each component inspected for compliance with specification and the car then rebuilt.

Few customers were prepared to wait over a year and then get a rebuilt car.

Free trade was seen as a panacea for economic problems by neo - cons, an engine which would provide infinite economic growth. Even if everybody understood free trade to mean the same thing however, in an increasingly automated world it would still fail to fulfill expectations. Problems of employment, welfare dependency, falling educational standards and ageing populations must be dealt with locally and there are no quick fixes.

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