Pushing a group to the front of the jobs queue doesn’t make the queue any shorter
Yesterday the Conservatives announced they were going to get ‘tough’ on long-term unemployment. But choosing a group to target distracts from dealing with the real problem.
In short, yesterday’s announcement was that from April claimants of job-seekers allowance (JSA) who have not found work after two years through the Work Programme will have three options. These are: work placements (such as cleaning up litter), daily job centre visits, or compulsory training. If they do not participate fully in any of these they face losing their benefit.
Labour's response was that this proof that the Work Programme isn’t working. But they didn’t suggest that such a programme was needless. So what does the data tell us about (a) how big is the problem long-term unemployment and (b) how much intervention is required?
Here some ways to breakdown the data on the situation at the moment:
- In August 2013 1.3 million people claimed JSA in Great Britain. This includes 200,000 that had been claiming for more than two years. So at 16% of all job seekers, the long term unemployed are a small minority.
- But the number of people claiming JSA for more than two years has almost doubled for two years in a row: it was 60,000 in 2011 and 110,000 in 2012. Perhaps this is a growing problem in need sudden intervention?
The graph below shows this data but also the long-term trend. It shows that in 2009 long-term JSA claims reached 20,000, its lowest point since at least the 1980s. 2009 was also the year that overall JSA claims went up and in the following years the number of long-term claims increased in turn.
So this increase in long-term JSA claims is the result of the recession. Unemployment went up in 2009 and it hasn’t really recovered. Many of those that became unemployed in 2009 and 2010 have not been able to find a job since.
But the graph also shows us what kind of intervention might be required. Long-term claimants are not at a historic high. In 1996 there were 400,000 people claiming JSA for more than two years, 20% of the total claimants, both figures are much higher than the situation now.
Since 1996, the number and share of long-term JSA claims fell until the mid-2000s when it was around 5% of claimants. This happened at the same time as the number of claimants overall came down.
Falling JSA claims indicate an increase in opportunities in the labour market. The fact that long-term JSA claims came down in line with claims overall shows that the best way to tackle long term unemployment is with a rising overall employment rate. The problem with unemployment lies in the labour market and not the labour force.
By prioritising the long-term unemployed as in need of extra attention, incentives or ‘tough love’ only serves to push them to the front of the queue at the job-centre. Governments are entitled to choose which groups they want to prioritise for intervention. But in doing so they still need to tackle the question of why there are so many people overall that are unemployed in the first place.