Unemployment is still too high – so why don't people care?

Unemployment of 7.8% ought to have people in the streets. Yet the only thing we hear is a collective sigh of indifference.

For more than three years, unemployment has been at levels we haven’t seen since the mid 1990s. However, as many commentators have noted, there is little evidence of public sympathy for those experiencing the consequences of stagnant labour demand. A poll for Prospect earlier this year found strong (although not majority) support for cutting benefits to the unemployed. The British Social Attitudes survey shows that while in 2001 88 per cent of respondents said the government was mainly responsible for ensuring the unemployed had enough to live on, only 59 per cent thought this in 2011. And the coalition’s strategy of presenting increases in welfare spending as a consequence of the previous government’s profligacy rather than the economic crisis seems to have found a receptive audience. 

In terms of public attitudes, unemployment seems to be unusual. How do we explain this? A common response is to look for explanations in underlying values or ideology: more individualism, less solidarity, a greater concern with personal responsibility, workers being duped by capitalist propaganda – take your pick. But there are some other reasons to expect unemployment to have a muted impact on public opinion, rooted in experience and expectations rather than values or ideology. 

The risk of becoming unemployed is low for most people in employment

If you are currently in employment, what is the risk that you will lose your job and become unemployed in the next three months? ONS publishes experimental statistics on movements between different labour market positions (employment, unemployment and economic inactivity). The latest data shows a risk of moving from employment to unemployment of 1.4 per cent per quarter – in other words, 98.6 per cent against becoming unemployed. The risk is non-negligible but prior to the recession, it was 1.2 per cent, so we’re talking about an increase of 0.2 per cent.  

This may seem surprising given that the unemployment rate is so much higher now, but it’s important to remember that the unemployment rate doesn’t measure the risk of becoming unemployed, and still less the risk of a currently employed worker becoming unemployed. It tells us what proportion of (economically active) people are unemployed at a point in time.

(As a thought experiment, imagine a situation where unemployment is high but nearly everyone who is unemployed has been out of work for more than a year: the risk of becoming unemployed in the near future would be very small, however high the unemployment rate was.)

Analysis by Paul Gregg and Jonathan Wadsworth (in The Labour market in winter, Oxford 2011) indicates that the risk of unemployment due to job loss is lower now than in the last two major recessions (although it’s worth bearing in mind that, even then, only a small minority of the employed were affected). The reduction in the risk compared to previous recessions may help explain apparently low current levels of public concern. People in employment may, rationally, see unemployment primarily as something that happens other people. This will tend to make their attitudes to the unemployed more dependent on their altruism than on any sense of being personally implicated. And it may leave people more open to the suggestion that unemployment is due to some personal failing rather than to slack labour demand.

Job loss is not the main cause of unemployment

It is natural to think of unemployment primarily in terms of people losing their jobs, but people also become unemployed because they have entered the labour market from some form of economic inactivity and failed to find work. Over recent years this has been no less important a source of flows into unemployment than job loss, and apart from the sharp peak in job losses at the onset of recession, it has been more important since 2008 (see chart). While flows from employment to unemployment are still high compared to pre-recession years, more people are becoming unemployed because they have failed to establish (or re-establish) a foothold in the labour market- primarily people leaving education, but also parents moving back into the labour market to supplement loss of earnings by partners and people affected by new benefit conditionality regimes.

 

Source ONS Labour Market Flows November 2012

With the partial exception of people affected by benefit conditionality, weak labour demand remains the explanation for the increase in all flows into unemployment, from all origins. But because the risk is falling somewhat less on existing workers than on those entering the labour market, employed workers may be less likely to relate unemployment  to their own experience. Again, the chances that employed people will see unemployment as a collective risk to which they are themselves exposed is reduced, not because of false consciousness or a shift in underlying values but simply because that is not the situation they face.

In earlier recessions job losses not only made a somewhat larger contribution to unemployment, many of the losses  were highly salient in public consciousness due to high-profile industrial restructuring affecting unionised workplaces – factories, docks, mines – reinforcing the sense of unemployment as a national issue of concern to everyone. That brings me to my final point. 

Unemployment is massively concentrated in certain types of occupation

The risk of unemployment is not evenly distributed over the workforce: generally, people in lower paid jobs experience more spells of unemployment even in the good times, and they are also more exposed to risks in the bad times, because they are more likely to be in sectors hit by falling demand and because employers are less likely to "hoard" their labour in the hope of an upturn than they are for higher-paid workers. The unemployment rates for different occupations give us a sense of the difference in risk exposure: former workers in elementary occupations have an unemployment rate of 12 per cent on the most recent data, compared to 3 per cent for those in managerial occupations.  

Another way of capturing the concentration of unemployment is by comparing different occupational groups’ shares of total employment and of unemployment, as in the table below. Dividing the share of unemployment by the share of employment gives us a simple measure of concentration – for managers and professionals, the share of unemployment is half of the share of employment, but for sales and customer services jobs, it is 1.6 times employment and for elementary occupations it is 2.3 times employment. The groups with disproportionately high unemployment are a sizeable minority of the workforce, 26 per cent: but that is still a minority and those with disproportionately low unemployment are a much larger group – 45 per cent (the three columns on the right and left hand sides of the table). 

As in previous recessions, manufacturing workers are among those bearing the brunt of low labour demand, with unemployment at 1.4 times their share of employment. But these workers form a much smaller share of the workforce, and of the general public, than in the 1980’s or early 1990’s. Unemployment increasingly takes the form of workers in low-paid and relatively precarious jobs not seeing their contracts renewed (if they have contracts at all), rather than finding their unionised factory is shutting down.

So if we want to understand why the public shows less sympathy for the unemployed than we might expect, there are some suggestive leads in the current and historical labour market data. If people are inclined to think of unemployment in terms of workers losing jobs , recent trends don’t fit the paradigm very well . The potent symbols of unemployment as a national issue – whole industries shedding labour, older workers losing jobs they had worked in since leaving school and communities losing their main source of employment at one fell swoop – are far from typical of current unemployment. And if personal interest plays any role in driving public concern – in other words, if people are not complete altruists – currently employed workers may quite rationally see unemployment as someone else’s problem. The overall effect of these changes may be to make unemployment a far more distant contingency than in the last two major employment downturns- and the distance is not just a matter of perception, but of objective risk.

If this attempt to explain public attitudes in terms of risks, expectations and public salience is right, there are positive and negative implications. The negative (for those on the left – reverse the sign if you’re on the right) is that the coalition may not need to worry too much about its remarkable record of stagnating  unemployment: enough of the public is far enough away from the risks to maintain the ugly fiction that unemployment is primarily a personal failure. On the positive side, the sort of deep-seated changes in public values or ideology – away from solidarity and equality, towards devil-take-the hindmost individualism – which worry so many on the left may be a misinterpretation of the evidence.  I’ve tried to suggest why people might react differently to a rise in unemployment without fundamental changes in values. The UK public may be no less nice or nasty, tough or tender than they were thirty years ago: they may just be, on balance, further away from the problem. 

Photograph: Getty Images

Declan Gaffney is a policy consultant specialising in social security, labour markets and equality. He blogs at l'Art Social

Photo: Getty
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What to look out for in the 2016 local and devolved elections

Your guide throughout Thursday night and into Friday. 

22:00: Close of polls. My advice is to use this time to stock up on vital supplies, like energy drinks, dips and fast food. And also to open the New Statesman’s all-singing all-dancing liveblog, which I will kick off from 10pm.

23:00: First to declare will be borough councils in Sunderland and Tunbridge Wells.  Sunderland is a Labour stronghold while Tunbridge is a Conservative fortress and both elect in “thirds” – electing a third of their councillors every year, a break every four years, as councillors are elected once every four years.

So even if the Conservatives win all 25 seats in Sunderland or Labour storm Tunbridge, it won’t matter in terms of who runs services there. You may ask “Hey, isn’t this a really stupid way of running elections, designed to produce gridlock and political failure?” The answer to this question is “Yes!”

Though frankly if we see Labour gains in Tunbridge – they have three councillors there in total – David Cameron is going to have to start updating his LinkedIn pretty damn quick, but keep an eye out for how Ukip do in Sunderland.

23:30: Look out for Rugby, which also elects in thirds. The Conservatives took back control of this council in 2007 after years of it being hung. On a good night for Labour, they could knock it back into no overall control, and it’s places like this they need to be posting good results in if they want to get back into power in 2020. (Winning Rugby on a uniform swing would mean Labour was in power with a majority of eight.)

Less interesting is Tameside, another Labour stronghold, though watch out not only for how Ukip do but whether the Conservatives can come through the middle in any of the seats here. Overall, though, the non-Labour parties haven’t gone above double figures here since the 2010 election, so anything other than hegemony is a troubling sign for Labour.

00:00: Remember Nuneaton, commonly known as the site of Ed Miliband’s Waterloo? (It was defeat here in 2015 that made it clear that not only were Labour not on course for victory, but that defeat was going to be worse than many predicted.) Well, half of the council seats there are up for grabs in the council of Nuneaton and Bedworth. Nuneaton and Bedworth elect in halves – where, spoiler alert, they elect half their councillors every two years. Although Nuneaton has a Conservative MP it is solidly Labour at a local level and anything other than a Labour hold here would be very worrying.

Keep an eye out for the Labour strongholds of Wolverhampton and Sefton, both of which elect in thirds. There really should be nothing to see there, but if things are going badly, you might see Ukip making some gains.

Southend-on-Sea is a lot of fun – this true-blue seaside town is run by a Labour coalition with a group of independent parties, after a long period of rule by the Conservatives. Can Labour and its ragtag coalition keep control? Demographic change is very slowly moving Southend towards Labour, so keep an eye out for some progress here.

00:30: Another Labour council in Newcastle-Upon-Tyne, which likewise elects in thirds. The Liberal Democrats – remember them? – ran Newcastle from 2004 to 2011, so although a change of power is unlikely, if there is indeed a serious revival in Liberal Democrat fortunes since exiting the coalition, they should look to make some gains here.

01:00: Results will start to come through from the Welsh Assembly, with the rock-solid seat of Merthyr Tydfil and Rhymney. If Labour can’t win here, they can’t win anywhere, but watch out for how well Ukip can do here. Ukip’s rise in Wales is the “biggest polling movement you’ve never heard of”, in the words of Cardiff University’ Roger Scully, and if they get a strong second expect that to signal big, big gains in the List system. (Wales uses the additional member system, a combination of first past the past and an area list, similar to the list method for the European Parliament.)

In England, results will come in from Ipswich and the Wirral, which both elect in thirds. Ipswich is Labour-run with two Conservative MPs, while Wirral is Labour-run with two Labour MPs. The seats of Ipswich, Wirral West and Wirral South are all key marginals – so both parties will be hoping for good performances here.

01:30: Provided that nothing unexpected has happened, there should be two routine Labour victories in the safe seats of Sheffield Brightside & Hillsborough and Ogmore, by-elections which are being held on the same day. I wouldn’t rule out a good second for Ukip in Ogmore but other than that, nothing that interesting to see here.  

More interesting will be the councils of Bury and Swindon, both marginals. Bury is currently Labour-controlled while Swindon has been Conservative-run since 2003. Labour should win both if they are on a winning trajectory, although the fact it is on the thirds model means that a winning performance on the night might not be enough to take control in Swindon.

02:00: Is that a unicorn? No, it’s a Liberal Democrat run council! Eastleigh is one of just nine left in the country. The council elects in thirds and having been a one-party state in 2010, the effects of coalition mean that Eastleigh now sends a Tory to Westminster and has six Conservative councillors out of 44. Knocking out the two Tories who are up will have Tim Farron pouring champagne over himself, while the Conservatives will hope that they can continue their revival.

Scotpocalypse! The first results should come in from Scotland, with Cunninghame South, East Kilbride, Hamilton, Larkhall and Stonehouse, Na h-Eileanan an Iar, Rutherglen, Uddington and Bellshil all due to declare. With the exception of Rutherglen and Uddington and Bellshil, the SNP won all of those seats in 2011, but expect those two Labour seats to turn a pleasant shade of yellow.

There should be better news for Labour in Blaenau Gwent in Wales, which is also due to declare.

02:30: Councils, councils, everywhere. Basildon, Birmingham, Coventry , Lincoln, Stockport, Walsall are the ones to watch. We’ll have an idea who is having a good night after they declare.

The yellowcoats are coming, the yellowcoats are coming! Watch out for the result from the constituencies of Orkney and Shetland, both solidly Liberal Democrat. If the SNP take both, expect a clean sweep of every constituency in Holyrood, with the other parties exiled to the lists. Less exciting will be Perthshire South & Kinross-shire, Perthshire North, and Stirling , all of which ought to go SNP.

And more news from Wales: Alyn & Deeside, Carmarthen East & Dinefwr, Delyn, Yyns Mon and Vale of Clywd all declare. The Vale is one of a handful of seats that Labour won in the 2011 Assembly elections but lost in 2015 to the Conservatives – Labour has to hold onto and ideally do better in those seats this time – look out for Gower, Cardiff North and the Vale of Glamorgan later on in the night, too.

03:00: It all kicks off around here. (If you wanted, you could probably get away with going to bed at 8 and setting your alarm for three.)

Crunch time in Wales, with Aberavon, Aberconwy, Arfon, Brecon & Radnorshire, Clywd South, Clwyd West, Dwyfor Meirionnydd, Gower, Montgomeryshire, Neath, Swansea East, Swansea West, Wrexham, Caerphilly, Islwyn, Newport East, Newport West, Ceredigion and Monmouth all due to the declare. By 4am we should have a clear idea of who’ll be running Wales. (Spoiler alert: it will be Labour, with the question being whether they will be able to govern alone or will have to make a deal with Plaid Cymru and/or the Liberal Democrats.)

Ones to watch: Aberconwy, a three-way marginal between Labour, the Conservatives and Plaid, currently Tory-held. And Gower.

Meanwhile, in England, Bolton, Crawley, Dudley, Exeter, Great Yarmouth, Harlow, Hastings, Plymouth, Southampton, Stevenage and Thurrock are the councils to watch as a whole bunch come in. Bolton, Southampton and Plymouth are Labour-run and home to seats that were Labour in 2010 but went to the Tories in 2015 – Labour should hold on comfortably if they are to have  shot at winning back those constituencies in 2020. Harlow, Hastings, Crawley and Stevenage are Labour-run but Conservative since 2010 at the latest, and are places where Labour should consolidate power.

Can Tim Farron win on his own doorstep? A third of seats in South Lakeland, which includes his own seat of Westmoreland and Lunedale, are up for grabs. Even amidst general Liberal Democrat woe in 2015, his party actually gained two seats in Farron’s own seat and lost just two across South Lakeland. Expect a good night here.

And in Scotland, Angus North & Mearns, Angus South, Ayr, Carrick, Cumnock & Doon Valley, Clydebank & Milgavie, Cunninghame North, Dumbarton, Dumfriesshire, Dunddee City  East, Dundee City West, Galloway & Dumfries West, Greenock & Inverclyde, Kilmarnock & Irvine Valley, Strathkelvin & Bearsden will all declare.

03:30: Declarations from Edinburgh and Glasgow. It was Edinburgh that gave Labour its one MP in Scotland in 2015, but Edinburgh Southern, which holds the bulk of the wards in Ian Murray’s Edinburgh South seat, is already an SNP seat, while Edinburgh Central, which holds the remainder, is also already a fetching shade of yellow. But Edinburgh is still, despite having a near clean-sweep for the SNP at Westminster, one of the swingiest, most marginal-heavy cities in the United Kingdom, so something exciting could happen. (The word “could” is working very hard here.) Expect the SNP to win every seat in Glasgow, unless something untoward is happening.

In England, Redditch and Trafford are worth watching. Redditch was Labour until 2010 and Labour runs the council there – but they were defeated there in 2015 so it’s a must-win seat if Labour is to stay in the game for 2020. Trafford is an island of blue in a seat of red – it includes the safe Labour seats of Kate Green and Mike Kane, but also Graham Brady’s Tory stronghold – where victory would put Labour in a strong position at this stage of the parliament.

04:00: It never rains but it pours. Results to look out for are Cambridge, Carlisle, Colchester, Derby, Peterborough, Portsmouth and Slough. In Cambridge, if there is a Liberal Democrat revival, it will be here. Everywhere else is a straight Labour-Conservative battle.

And it’s decision time in Scotland, as Aberdeen Central, Aberdeen Donside, Aberdeen South & Kincardine North, Argyll & Bute, Clackmannanshire & Dunblane, Cowdenbeath, Dunfermline, East Lothian, Fife Mid & Glenrothes, Kirkcaldy and Moray all declare. But the newsworthy results will be in the list results from Glasgow and South Scotland, which should be announced. We’ll begin to know what the SNP’s opposition will look like at this point.

04:30: If you’re wondering “when’s best for a power nap?”, here’s not a bad shout. We should have a good idea of who’s had a good night, whether Labour is on an upward trajectory, if Cameron is in real difficulties, and who’ll be calling the shots in Cardiff and Holyrood by now. You can safely shut your eyes until 8am.

But if you’re as cool as me, you’ll stay up for a swathe of Scottish seats and at...

05:00: Results from the Scottish list system will start to come through.

In England, if the Greens are going to make any sort of splash tonight it’ll be in places like Norwich, where they are already the official opposition to Labour. The signs from by-elections so far is that Corbyn’s Labour goes down a treat in cities like Norwich, so there is a real risk that Labour could do them serious damage here. Getting out with the same number of seats, or even more, would indicate that there is life for the Greens even while Corbyn is Labour’s centre-forward.

Also keep an eye on Reading, one of a number of councils that is Labour at a local level but Conservative at Westminster. Labour really mustn’t fall back in places like if they are to have a shot at power in 2020. We’ll get the last results from Wales, with Cardiff North and the Vale of Glamorgan two to watch out for.

05:30: Results from the Lothian region will come in from Scotland. It’s these party list votes that will be responsible for the bulk, probably the entirety, of the non-SNP presence at Holyrood. 

07:00: We should have results from the list vote in Wales, where Ukip will likely do well, while the last few regions from Scotland should report in too. Votes start being counted in the mayoral races. You can grab a cheeky two and a half hour sleep about now.

09:30:  Results from the mayoral contests in Liverpool, Bristol, London, and Salford will come in. Expect fairly quick declarations from Liverpool, Salford and London, all of which look fairly likely to return Labour candidates by large majorities. Bristol is a trickier test for Labour though it is another part of the country where Labour ought to gain a boost from having Corbyn as leader.  It could be as late as 17:00 if the contests are close.

11:00: The excitement begins anew, as Cannock Chase – Labour at a local level, Conservative at Westminster declares.

11:30: Kirklees, which contains the marginal seats of Wakefield, Colne Valley, and Dewsbury, declares.

12:00: Another rare Liberal Democrat local authority in the shape of Cheltenham. They elect in halves and the council was last up in 2014. The Liberal Democrats held the constituency of Cheltenham from 1992 until 2015, when the Conservatives regained a seat they had held without interruption since 1950. If the Liberal Democrats have a future, it’s in securing a big result here and using that to kick on and retake the seat in 2020.

Hyndburn (Labour nationally and locally) and Milton Keynes (Labour minority administration locally, Conservative in both Westminster seats) are the marginals to look out for. A great result for David Cameron would see them chip away at Labour’s majority in Hyndburn and take back Milton Keynes. A good result for Jeremy Corbyn would be a majority in Milton Keynes and advances in Hyndburn. Both elect in thirds.

12:30: Calderdale declares. Calderdale is made up of two marginals – Halifax, held by Labour’s Hollie Lynch, and Calder Valley, held by the Conservative Craig Whittaker. It’s currently run by a Labour minority administration. A good result for the Conservatives would be to tip the balance of power their way, a good result for Labour would be full control. The status quo would indicate that the 2020 election will look pretty much the same as the 2015 one.

13:00: Gloucester declares. Gloucester sent a Labour MP to Westminster until 2010 but is Conservative at a local and national level. Though the thirds model makes it difficult for Labour to take full control, knocking it into no overall control would indicate that Corbyn is on his way to becoming Prime Minister in 2020. Also declaring is Stroud, Conservative in Westminster but Labour locally. Defeat here would indicate Corbyn is on his way to Milibandtown in 2020.

13:30: Blackburn with Darwen. This is a weird unitary authority, combining solid Labour territory in Blackburn (though watch out for how Ukip do!) with more marginal areas in Darwen. And it elects in thirds. So, basically, if Labour do very well here, we’ll be able to tell. Otherwise, ¯\_(ツ)_/¯.

14:00: Pendle, currently no overall control but run by the Conservatives in coalition with the Liberal Democrats – hey sounds familiar! – has had a Tory MP since 2010. A good night here – Pendle uses the thirds model – would be good news for Labour’s chances in 2020.

15:00: Another unicorn aka Liberal Democrat-run Three Rivers, which has stayed orange despite no record of success at a Westminster level for that party since 1906. It’s up in thirds, so the Liberal Democrats are aiming for consolidation while the Tories are hoping for erosion.

Rossendale, which has sent a Conservative to Westminster since 2010 but is Labour run, has a third of its council seats up for election. An increased Labour presence on the council would indicate Labour was on course to take back the seat – a reduced one would suggest quite the reverse.

16:00: Get ready for the end of an era? Watford has been Liberal Democrat run since 2004 but their majority was slashed to just one in 2015. Get ready for a changing of the guard.

17:00: Rotherham elects in thirds and Ukip did spectacularly well last time on the back of a child sexual abuse scandal. Look out for their performance this time.

18:00: One last Labour-Conservative marginal fight in Warrington. A few late bloomers will declare over the weekend, but at this point you can go outside, get dinner or go to the pub.

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.