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Dt S Alan Mc Gregor Economic 16+
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Transcript of Dt S Alan Mc Gregor Economic 16+
SCOTLAND’S CHANGING LABOUR MARKET: CHALLENGES AND OPPORTUNITIES FOR YOUNG PEOPLE
PRESENTATION TO DETERMINED TO SUCCEED GATHERING
26 October 2009
Professor Alan McGregor
2
PLAN OF PRESENTATION
1. Young people and recessions
2. Recent labour market developments
3. Impacts on young people
4. What future may hold
5. Implications for education sector
3
YOUNG PEOPLE AND RECESSIONS
1. Young generally fare badly because outside labour market trying to get in
• Employers cut back on recruitment
• Employees sit tight leading to many fewer turnover vacancies
2. Young people suffer most damage from unemployment
• Increases probability of future unemployment
• Reduces long-term earning power
3. Long-standing concerns about ‘lost generation’ in labour market terms
• Big issue in 1930s
• Again in late 1970s/early 1980s
4
LABOUR MARKET IN RECESSION
1. Used to long period of jobs growth (SEE CHART)
2. Since around summer of 2008 in Scotland
• Around 82,000 redundancies since April 2008
• Notified vacancies have fallen – 40% for worst 12 month period
• Employment levels have declined – hard to quantify
• Hours worked fallen on average
• Unemployment has risen – for all groups – as we will see later
3. Redundancy information less reliable but we know has hit disproportionately those traditionally most vulnerable to recession
• Manufacturing industry
• Low skilled workers
5
Total Employment, UK, 1971-2007
20,000
22,000
24,000
26,000
28,000
30,000
1971 1975 1979 1983 1987 1991 1995 1999 2003 2007
6
RECESSION AND YOUNG PEOPLE
1. Stats take too long to update (See Charts)
• Unemployment edged up in 2008 as SL ‘destination’ …
• … but MCMC numbers edged down
• 2009 SL destination data will be out soon
2. Often hard to tell impacts at early stage as previous recessions show ‘disguised unemployment’
• More stay on longer at school
• More go to college and university
3. Probably less scope for ‘disguised unemployment’ now
• School staying on rates much higher
• Proportions going to college and university much higher
7
School Leaver Destinations (% Unemployed),
2002/03 16.0
2003/04 16.4
2004/05 13.1
2005/06 13.2
2006/07 12.0
2007/08 12.4
8
16-19 Year Olds in MCMC Group (%)
2003 13.7 36,000
2004 13.3 35,000
2005 14.2 37,000
2006 12.4 32,000
2007 12.2 32,000
2008 11.9 31,000
9
RECESSION AND YOUNG PEOPLE (CONT)
4. Unemployment (Job Seeker Allowance claimants) has risen significantly (SEE CHART)
• Not much difference by age group …
• … but nonetheless now around 13,000 18/19 year olds and 25,000 20/24s unemployed …
• … and this is narrowest measure, so it’s actually worse than this
5. Long term unemployment growth much higher for under 25s
• Numbers still relatively low …
• … but we need to keep close eye on them
10
JSA Claimants: Total and 26 week + by Age Group
Sept 2008 Sept 2009 % Change
JSAClaimants
18-19 8,485 12,920 +52.3
20-24 15,750 24,940 +58.3
25 + 55,610 89,455 +60.9
JSAClaimants26 weeks +
18-19 855 2,210 +158.5
20-24 1,955 5,020 +156.8
25 + 16,990 33,170 +95.2
11
RECESSION AND YOUNG PEOPLE (CONT)
6. On wider unemployment measure (people claiming DWP out of work benefits, including JSA)
• 73,000 unemployed under 25s (Almost twice JSA numbers)
• 31,000 unemployed for 6 months or more (4 times JSA numbers for long-term unemployed)
• Growth in numbers ‘only’ 27% over last full year – but 4 times rate of increase for 25+
12
THE ECONOMY: LOOKING FORWARD
1. No one knows
• Type of recovery likely
• Timescale for recovery (SEE CHART)
2. Can look to past (SEE CHARTS)
3. Looking forward, very high level of public debt
• Needs to be serviced
• Needs to be run down
• Big implications for taxation – and household spend
• Big implications for public spending
• Big implications for public sector jobs
• Big implications for sectors selling to government
13
RECOVERY SCENARIOS
1. V Shaped
2. Double Dip
3. Bumping Along
14
TELLING FUTURE FROM PAST
Source: The Scottish Government
15
THE ECONOMY: LOOKING FORWARD (CONT)
4. Long run higher sensitivity to risk for global investors
• Higher interest rates in the long term
• Lower growth rates
• Lower employment growth
• Underlying productivity growth around 2.0% - so economy
needs to grow above this to create extra jobs
• Last 5 years averaged only 2.3% growth
16
EMPLOYMENT: LOOKING FORWARD
1. Employment levels forecast to be slow to grow (See Chart)
• May not start rising till 2012
• 2008 employment levels not expected to be achieved until
2016/2017
17
Source: Scottish Enterprise
Employment in Scotland 2008-2019
2,560,000
2,580,000
2,600,000
2,620,000
2,640,000
2,660,000
2,680,000
2,700,000
2,720,000
2,740,000
2,760,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Nu
mb
er
em
plo
ye
d
EMPLOYMENT FORECAST TO INCREASE, FROM 2012
18
TOMORROW’S INDUSTRIES
1. Bear in mind currently 67% of Scottish 16-19s work in only 4 sectors• Hotels and restaurants• Wholesale and retail• Other community, social and personal services• Construction
2. National projections – assumes future same as past• Decline of manufacturing• Growth of services
3. Scotland’s priority sectors? (SEE CHARTS)• Numbers in some of priority industries relatively small
4. ‘Green Jobs’ – around 880,000 in UK• Environment (21%)• Renewable energy (29%)• Emerging low carbon (50%)• Pre-recession forecasting approx. 50% growth over 5 years for UK
19
GOVERNMENT ECONOMIC STRATEGY - OUR SECTOR FOCUS
GES – Our sector focus
Aerospace,
Defence &
Marine
Chemical
Sciences
Forest
IndustriesTextiles
Other Growth Sectors
Key Sectors
Tourism(Destinations,
Products)
Life Sciences(Stem Cells,
Translational Medicine)
Food + Drink
Financial &
Business Services
Energy(Renewables, Oil & Gas
Thermal Generation)
Creative Industries(Digital Markets)
Enabling Technologies
Enabling Technologies
Construction
Source: Scottish Enterprise
20
EMPLOYMENT IN KEY AND OTHER GROWTH SECTORS (2006)
Industry Employees
Tourism 206,600
Construction 126,100
Financial and Business Services 90,389
Creative Industries 46,700
Food & Drink 46,000
Energy 44,700
Life Sciences 27,400
Chemical Sciences 14,100
Textiles 10,400
Forest Industries 3,300
Source: Scotish Enterprise
21
TOMORROW’S INDUSTRIES (CONT)
5. New Industry, New Jobs - UK industry strategy. Get in behind growth potential of:
− Low carbon
− Digital markets
− Life Science and pharmaceuticals
− Advanced manufacturing
− Professional and financial services
− Engineering construction
− Services and products for ageing society
6. Public sector …… ?
• Around 23% of Scotland’s jobs – approx 572,000
• Cuts a certainty, size of cuts unknown (10-30%?)
• … although many of jobs still need to be done
22
TOMORROW’S OCCUPATIONS
1. Groups expected to show the most significant net increases at UK level:
• managers & senior officials (+ 872k, 1.7% pa)
• professional occupations (+ 643k, 1.5% pa)
• associate professional & technical occupations (+ 654k, 1.4% pa)
2. Declines projected for:
• administrative, clerical & secretarial
• skilled manual & electrical trades
• other skilled trades
3. Replacement demand will still mean many vacancies in declining areas
Source: UKCES
23
DEMOGRAPHIC CHANGE
1. Young people (16-19) currently at peak levels (SEE CHART)
2. Decline in absolute and proportionate terms through next decade (SEE CHART)
3. Should make labour market entry easier
24
16 to 19 Year Olds in Scotland, 2008 to 2028
160,000
180,000
200,000
220,000
240,000
260,000
280,000
300,000
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
25
Change in16-19 and 16-64 Year Olds (2008 = 100)
70
75
80
85
90
95
100
105
1102
008
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
16-19s 16-64s
26
SOME CONCLUSIONS
1. Growing unemployment for young people with particular concerns around
• More rapid growth of long term unemployment
• High percentage on IB and IS
2. Employment levels likely to be depressed for some time – probably at least 3/4 years
3. Scotland’s biggest sector – public sector – likely to take big cuts
4. What employers looking for not likely to change – basic and core/soft skills
5. Demographic trends favour younger age group over next decade
27
MESSAGES FOR EDUCATION
1. Better understanding of credit and finance!!
• Risks and returns
2. Better understanding of how economy changing
• What are new industries and jobs?
• What does these actually mean – ‘green jobs’!!
• What education and skills needed to access them?
• Many traditional industries and occupations will continue to be there
3. Need flexible system on vocational skills
• Continuing demand for more traditional skills (e.g. construction)
• Which specific demands will grow most quickly out of recession - hard to call …
• … so need to identify emerging trends quickly and respond quickly
28
MESSAGES FOR EDUCATION (CONT)
4. Building strong base of transferable skills – fit needs of all employers, and indeed life in general
• Basic skills
• Core/soft skills
5. Opportunity to create more enterprising attitudes and behaviours – build Scotland’s business base
• Correcting for population Scotland has only around 85% of the businesses, and new business starts compared to UK
6. Generally create more resourceful young people – which I think Determined to Succeed is all about