What does ‘good growth’ look like?

24th January 2014

As welcome as yesterday’s latest unemployment figures are, higher employment is not enough on its own to ensure a sustained and lasting recovery. What’s needed are good jobs with opportunities for people to progress in throughout their careers. That progression nearly always requires new skills and learning, both formal and informal; and progression is crucial if we are to have a dynamic labour market in which people can aspire to, and reach, new skills levels to both attract inward investment and free-up lower level jobs for new labour market entrants.

Our concern is that much of the new employment is actually under-employment – in two senses, with graduates ‘trading-down’ to jobs requiring lower level skills, hence pushing out others; and in the sense that many people are not working full-time when they want to and need to.

One impression of that local labour market emerged during our recent seminars – run in partnership with UKCES – on using labour market intelligence to identify skills needs and demands, and assess local skills gaps.

At the most recent event in York, we heard how employment levels are high. However, the bulk of new jobs are low-skilled which highlights concerns about how the skills base is being raised, or not as the case is here, across the wider economy.

We heard how York is a growing city, a nice place to live and many graduates decide to stay on. Exactly what cities like York need to stay prosperous. However, the problem is that there aren’t enough graduate-type jobs for those leaving university and they have very little option but to take jobs that aren’t making the best use of their skills.

A further situation has been highlighted in Derby. The high-skilled jobs there are being filled by graduates from other parts of the country and indeed across the world. This means that the local, established population have few opportunities to progress in their careers and have little alternative from low-paid work.

The economy is growing, unemployment is falling – these are very welcome headlines. But beneath those headlines we need to consider what good and sustained growth looks like.

What sorts of jobs are being filled and are these the jobs that will ensure a sustained and lasting economic recovery?

There is, rightly, concern about the further increases in those young people who are not in education, employment or training. We look forward to seeing the first figures of the number of young people on Traineeships next week. Opportunities for people to learn at all ages are absolutely vital – for the sake of their own careers and to ensure that local labour markets become resilient and thrive.

Learning for adults, of all ages, has never been more important. We need the right level of public investment to create opportunities that match people’s skills and will mean a much stronger economy and more secure and lasting growth.

When adults are given the right opportunities to learn, this leads to higher productivity at work, better social mobility for everyone and also impacts positively on the population’s health and wellbeing. When parents learn this helps to boost their children’s achievements in school, helping to realise an overall long-term future improvement in skills.

What all this highlights is the central importance of using labour market intelligence in an ever changing skills system where LEPS and local partnership working is at the forefront of economic regeneration, economic growth and prosperity for all.