Rishi Sunak has a solution to the United Kingdom’s rising unemployment: a new army of jobs coaches to help people find work.
There are two criticisms of the idea. The first is that the British state’s attempts at “work coaching” have tended to be unimpressive: box-ticking exercises that do a poor job of reskilling workers and instead focus on shunting the unemployed into new jobs – any new job – even if this means a job with low pay and poor-to-non-existent progression.
This is a bit of a red herring in that, as well as it being true to say the UK has done a terrible job of reskilling people throughout their working lives, it is also true that the country needs to improve at it, and that the aspiration is a good one. As we live longer – and as our economy continues to change to meet not only technological innovation but also the challenge of tackling the climate crisis – we are going to need to get a lot, lot better at turning factory workers and journalists into computer programmers and plumbers than at present.
A combination of more money for staff who work in Job Centres, but more importantly a change in incentives – if you work in a recruitment consultancy, you are incentivised to find your clients good jobs; if you work in a Job Centre, you are incentivised to get them to stop claiming Jobseeker’s Allowance by any means necessary – would go a long way to fixing this.
The bigger problem is that, while spending more on reskilling is a good thing, it’s far from clear that training, of any kind, is the correct response to the economic crisis. Two things are driving the UK’s mounting unemployment rate: the first is that a bunch of jobs are still viable, but are currently located in the wrong places. Sandwich shops in city centres face a bleak future, but restaurants and takeaways in residential areas are booming thanks to the demand from a remote workforce. In addition, new jobs in delivery and the courier industry are being created all the time. There are some barriers for the unemployed in taking up these jobs: for example, if you have never needed a driving licence before, then getting one is an essential path to being able to work as a courier. But the bigger problem is twofold. Firstly, that jobs like these don’t replace the old ones in sufficient numbers. Secondly, that the biggest barrier to these roles being created isn’t the skills of the unemployed, but the start-up costs faced by businesses making the transition.
The still greater issue, though, is that the main thing preventing employment at present is coronavirus: both its indirect pressure on demand, in that some households are voluntarily refraining from economic activity to minimise their risk of infection, and the direct consequences of government policy, in that some businesses have been forced to shut or have been rendered unprofitable by social distancing and Covid-secure regulations. These regulations also inhibit the creation of new jobs – and skilling up the workforce won’t make those inhibitions go away. They can only be fixed by removing the barriers to new businesses.