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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Arsène Wenger: The Innovator in Old Age

As the Arsenal manager announces his departure from the club after more than two decades, the New Statesman editor, Jason Cowley, appreciates English football’s first true cosmpolitan. 

How to account for the essence of a football club? The players and managers come and go, of course, and so do the owners. The fans lose interest or grow old and die. Clubs relocate to new grounds. Arsenal did so in the summer of 2006 when they moved from the intimate jewel of a stadium that was Highbury to embrace the soulless corporate gigantism of the Emirates. Clubs can even relocate to a new town or to a different part of a city, as indeed Arsenal also did when they moved from south of the Thames to north London in 1913 (a land-grab that has never been forgiven by their fiercest rivals, Tottenham). Yet something endures through all the change, something akin to the Aristotelian notion of substance.

Before Arsène Wenger arrived in London in late September 1996, Arsenal were one of England’s most traditional clubs: stately, conservative, even staid. Three generations of the Hill-Wood family had occupied the role of chairman. In 1983, an ambitious young London businessman and ardent fan named David Dein invested £290,000 in the club. “It’s dead money,” said Peter Hill-Wood, an Old Etonian who had succeeded his father a year earlier. In 2007, Dein sold his stake in the club to Red & White Holdings, co-owned by the Uzbek-born billionaire Alisher Usmanov, for £75m. Not so dead after all.

In the pre-Wenger years, unfairly or otherwise, the Gunners were known as “lucky Arsenal”, a pejorative nickname that went back to the 1930s. For better or worse, they were associated with a functional style of play. Under George Graham, manager from 1986 to 1995, they were exponents of a muscular, sometimes brutalist, long-ball game and often won important matches 1-0. Through long decades of middling success, Arsenal were respected but never loved, except by their fans, who could be passionless when compared to, say, those of Liverpool or Newcastle, or even the cockneys of West Ham.

Yet Wenger, who was born in October 1949, changed everything at Arsenal. This tall, thin, cerebral, polyglot son of an Alsatian bistro owner, who had an economics degree and was never much of a player in the French leagues, was English football’s first true cosmopolitan.

He was naturally received with suspicion by the British and Irish players he inherited (who called him Le Professeur), the fans (most of whom had never heard of him) and by journalists (who were used to clubbable British managers they could banter with over a drink). Wenger was different. He was reserved and self-contained. He refused to give personal interviews, though he was candid and courteous in press conferences during which he often revealed his sly sense of humour.

He joined from the Japanese J League side, Nagoya Grampus Eight, where he went to coach after seven seasons at Monaco, and was determined to globalise the Gunners. This he did swiftly, recruiting players from all over the world but most notably, in his early years, from France and francophone Africa. I was once told a story of how, not long after joining the club, Wenger instructed his chief scout, Steve Rowley, to watch a particular player. “You’ll need to travel,” Wenger said. “Up north?” “No – to Brazil,” came the reply. A new era had begun.

Wenger was an innovator and disrupter long before such concepts became fashionable. A pioneer in using data analysis to monitor and improve performance, he ended the culture of heavy drinking at Arsenal and introduced dietary controls and a strict fitness regime. He was idealistic but also pragmatic. Retaining Graham’s all-English back five, as well as the hard-running Ray Parlour in midfield, Wenger over several seasons added French flair to the team – Nicolas Anelka (who was bought for £500,000 and sold at a £22m profit after only two seasons), Thierry Henry, Patrick Vieira, Robert Pirès. It would be a period of glorious transformation – Arsenal won the Premier League and FA Cup “double” in his first full season and went through the entire 2003-2004 League season unbeaten, the season of the so-called Invincibles.

The second decade of Wenger’s long tenure at Arsenal, during which the club stopped winning titles after moving to the bespoke 60,000-capacity Emirates Stadium, was much more troubled. Beginning with the arrival of the Russian oligarch Roman Abramovich in 2003, the international plutocracy began to take over the Premier League, and clubs such as Chelsea and Manchester City, much richer than Arsenal, spent their way to the top table of the European game. What were once competitive advantages for Wenger – knowledge of other leagues and markets, a worldwide scouting network, sports science – became routine, replicated even, in the lower leagues.

Wenger has spoken of his fear of death and of his desire to lose himself in work, always work. “The only possible moment of happiness is the present,” he told L’Équipe in a 2016 interview. “The past gives you regrets. And the future uncertainties. Man understood this very fast and created religion.” In the same interview – perhaps his most fascinating – Wenger described himself as a facilitator who enables “others to express what they have within them”. He yearns for his teams to play beautifully. “My never-ending struggle in this business is to release what is beautiful in man.”

Arsène Wenger is in the last year of his contract and fans are divided over whether he should stay on. To manage a super-club such as Arsenal for 20 years is remarkable and, even if he chooses to say farewell at the end of the season, it is most unlikely that any one manager will ever again stay so long or achieve so much at such a club – indeed, at any club. We should savour his cool intelligence and subtle humour while we can. Wenger changed football in England. More than a facilitator, he was a pathfinder: he created space for all those foreign coaches who followed him and adopted his methods as the Premier League became the richest and most watched in the world: one of the purest expressions of let it rip, winner-takes-all free-market globalisation, a symbol of deracinated cosmopolitanism, the global game’s truly global league. 

(2017)

Postscript

Arsène Wenger has announced he is stepping down, less than a year after signing a new two-year contract in the summer of 2017. A run to the Europa League finals turned out not to be enough to put off the announcement to the end of the season.

Late-period Wenger was defined by struggle and unrest. And the mood at the Emirates stadium on match day was often sour: fans in open revolt against Wenger, against the club’s absentee American owner Stan Kroenke, against the chief executive Ivan Gazidis, and sometimes even against one another, with clashes between pro and anti-Wenger factions. As Arsenal’s form became ever more erratic, Wenger spoke often of how much he suffered. “There is no possibility not to suffer,” he said in March 2018. “You have to suffer.”

Arsenal once had special values, we were told, and decision-making was informed by the accumulated wisdom of past generations. But the club seems to have lost any coherent sense of purpose or strategic long-term plan, beyond striving to enhance the profitability of the “franchise”.

The younger Wenger excelled at discovering and nurturing outstanding young players, especially in his early seasons in north London. But that was a long time ago. Under his leadership, Arsenal became predictable in their vulnerability and inflexibility, doomed to keep repeating the same mistakes, especially defensive mistakes. They invariably faltered when confronted by the strongest opponents, the Manchester clubs, say, or one of the European super-clubs such as Bayern Munich or Barcelona.

Wenger’s late struggles were a symbol of all that had gone wrong at the club. The vitriol and abuse directed at this proud man was, however, often painful to behold.

How had it come to this? There seems to be something rotten in the culture of Arsenal football club. And Wenger suffered from wilful blindness. He could not see, or stubbornly refused to see, what others could: that he had become a man out of a time who had been surpassed by a new generation of innovators such as Pep Guardiola and Tottenham’s Mauricio Pochettino. “In Arsene we trust”? Not anymore. He had stayed too long. Sometimes the thing you love most ends up killing you.

 

Jason Cowley is editor of the New Statesman. He has been the editor of Granta, a senior editor at the Observer and a staff writer at the Times.