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Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
Dt S Alan Mc Gregor Economic 16+
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Dt S Alan Mc Gregor Economic 16+

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  • 1. SCOTLAND’S CHANGING LABOUR MARKET: CHALLENGES AND OPPORTUNITIES FOR YOUNG PEOPLE PRESENTATION TO DETERMINED TO SUCCEED GATHERING 26 October 2009 Professor Alan McGregor
  • 2. PLAN OF PRESENTATION <ul><li>Young people and recessions </li></ul><ul><li>Recent labour market developments </li></ul><ul><li>Impacts on young people </li></ul><ul><li>What future may hold </li></ul><ul><li>Implications for education sector </li></ul>
  • 3. YOUNG PEOPLE AND RECESSIONS <ul><li>Young generally fare badly because outside labour market trying to get in </li></ul><ul><ul><li>Employers cut back on recruitment </li></ul></ul><ul><ul><li>Employees sit tight leading to many fewer turnover vacancies </li></ul></ul><ul><li>Young people suffer most damage from unemployment </li></ul><ul><ul><li>Increases probability of future unemployment </li></ul></ul><ul><ul><li>Reduces long-term earning power </li></ul></ul><ul><li>Long-standing concerns about ‘lost generation’ in labour market terms </li></ul><ul><ul><li>Big issue in 1930s </li></ul></ul><ul><ul><li>Again in late 1970s/early 1980s </li></ul></ul>
  • 4. LABOUR MARKET IN RECESSION <ul><li>Used to long period of jobs growth (SEE CHART) </li></ul><ul><li>Since around summer of 2008 in Scotland </li></ul><ul><ul><li>Around 82,000 redundancies since April 2008 </li></ul></ul><ul><ul><li>Notified vacancies have fallen – 40% for worst 12 month period </li></ul></ul><ul><ul><li>Employment levels have declined – hard to quantify </li></ul></ul><ul><ul><li>Hours worked fallen on average </li></ul></ul><ul><ul><li>Unemployment has risen – for all groups – as we will see later </li></ul></ul><ul><li>Redundancy information less reliable but we know has hit disproportionately those traditionally most vulnerable to recession </li></ul><ul><ul><li>Manufacturing industry </li></ul></ul><ul><ul><li>Low skilled workers </li></ul></ul>
  • 5. Total Employment, UK, 1971-2007
  • 6. RECESSION AND YOUNG PEOPLE <ul><li>Stats take too long to update (See Charts) </li></ul><ul><ul><li>Unemployment edged up in 2008 as SL ‘destination’ … </li></ul></ul><ul><ul><li>… but MCMC numbers edged down </li></ul></ul><ul><ul><li>2009 SL destination data will be out soon </li></ul></ul><ul><li>Often hard to tell impacts at early stage as previous recessions show ‘disguised unemployment’ </li></ul><ul><ul><li>More stay on longer at school </li></ul></ul><ul><ul><li>More go to college and university </li></ul></ul><ul><li>Probably less scope for ‘disguised unemployment’ now </li></ul><ul><ul><li>School staying on rates much higher </li></ul></ul><ul><ul><li>Proportions going to college and university much higher </li></ul></ul>
  • 7. School Leaver Destinations (% Unemployed), 12.4 2007/08 12.0 2006/07 13.2 2005/06 13.1 2004/05 16.4 2003/04 16.0 2002/03
  • 8. 16-19 Year Olds in MCMC Group (%) 31,000 32,000 32,000 37,000 35,000 36,000 11.9 2008 12.2 2007 12.4 2006 14.2 2005 13.3 2004 13.7 2003
  • 9. RECESSION AND YOUNG PEOPLE (CONT) <ul><li>Unemployment (Job Seeker Allowance claimants) has risen significantly (SEE CHART) </li></ul><ul><ul><li>Not much difference by age group … </li></ul></ul><ul><ul><li>… but nonetheless now around 13,000 18/19 year olds and 25,000 20/24s unemployed … </li></ul></ul><ul><ul><li>… and this is narrowest measure, so it’s actually worse than this </li></ul></ul><ul><li>Long term unemployment growth much higher for under 25s </li></ul><ul><ul><li>Numbers still relatively low … </li></ul></ul><ul><ul><li>… but we need to keep close eye on them </li></ul></ul>
  • 10. JSA Claimants: Total and 26 week + by Age Group +95.2 33,170 16,990 25 + +156.8 5,020 1,955 20-24 +158.5 2,210 855 18-19 JSA Claimants 26 weeks + +60.9 89,455 55,610 25 + +58.3 24,940 15,750 20-24 +52.3 12,920 8,485 18-19 JSA Claimants % Change Sept 2009 Sept 2008
  • 11. RECESSION AND YOUNG PEOPLE (CONT) <ul><li>On wider unemployment measure (people claiming DWP out of work benefits, including JSA) </li></ul><ul><ul><li>73,000 unemployed under 25s (Almost twice JSA numbers) </li></ul></ul><ul><ul><li>31,000 unemployed for 6 months or more (4 times JSA numbers for long-term unemployed) </li></ul></ul><ul><ul><li>Growth in numbers ‘only’ 27% over last full year – but 4 times rate of increase for 25+ </li></ul></ul>
  • 12. THE ECONOMY: LOOKING FORWARD <ul><li>No one knows </li></ul><ul><ul><li>Type of recovery likely </li></ul></ul><ul><ul><li>Timescale for recovery (SEE CHART) </li></ul></ul><ul><li>Can look to past (SEE CHARTS) </li></ul><ul><li>Looking forward, very high level of public debt </li></ul><ul><ul><li>Needs to be serviced </li></ul></ul><ul><ul><li>Needs to be run down </li></ul></ul><ul><ul><li>Big implications for taxation – and household spend </li></ul></ul><ul><ul><li>Big implications for public spending </li></ul></ul><ul><ul><li>Big implications for public sector jobs </li></ul></ul><ul><ul><li>Big implications for sectors selling to government </li></ul></ul>
  • 13. RECOVERY SCENARIOS 1. V Shaped 2. Double Dip 3. Bumping Along
  • 14. TELLING FUTURE FROM PAST Source: The Scottish Government
  • 15. THE ECONOMY: LOOKING FORWARD (CONT) <ul><li>Long run higher sensitivity to risk for global investors </li></ul><ul><ul><li>Higher interest rates in the long term </li></ul></ul><ul><ul><li>Lower growth rates </li></ul></ul><ul><ul><li>Lower employment growth </li></ul></ul><ul><ul><li>Underlying productivity growth around 2.0% - so economy needs to grow above this to create extra jobs </li></ul></ul><ul><ul><li>Last 5 years averaged only 2.3% growth </li></ul></ul>
  • 16. EMPLOYMENT: LOOKING FORWARD <ul><li>Employment levels forecast to be slow to grow (See Chart) </li></ul><ul><ul><li>May not start rising till 2012 </li></ul></ul><ul><ul><li>2008 employment levels not expected to be achieved until 2016/2017 </li></ul></ul>
  • 17. Source: Scottish Enterprise EMPLOYMENT FORECAST TO INCREASE, FROM 2012
  • 18. TOMORROW’S INDUSTRIES <ul><li>Bear in mind currently 67% of Scottish 16-19s work in only 4 sectors </li></ul><ul><ul><li>Hotels and restaurants </li></ul></ul><ul><ul><li>Wholesale and retail </li></ul></ul><ul><ul><li>Other community, social and personal services </li></ul></ul><ul><ul><li>Construction </li></ul></ul><ul><li>National projections – assumes future same as past </li></ul><ul><ul><li>Decline of manufacturing </li></ul></ul><ul><ul><li>Growth of services </li></ul></ul><ul><li>Scotland’s priority sectors? (SEE CHARTS) </li></ul><ul><ul><li>Numbers in some of priority industries relatively small </li></ul></ul><ul><li>‘Green Jobs’ – around 880,000 in UK </li></ul><ul><ul><li>Environment (21%) </li></ul></ul><ul><ul><li>Renewable energy (29%) </li></ul></ul><ul><ul><li>Emerging low carbon (50%) </li></ul></ul><ul><ul><li>Pre-recession forecasting approx. 50% growth over 5 years for UK </li></ul></ul>
  • 19. GOVERNMENT ECONOMIC STRATEGY - OUR SECTOR FOCUS Source: Scottish Enterprise
  • 20. EMPLOYMENT IN KEY AND OTHER GROWTH SECTORS (2006) Source: Scotish Enterprise 3,300 Forest Industries 10,400 Textiles 14,100 Chemical Sciences 27,400 Life Sciences 44,700 Energy 46,000 Food & Drink 46,700 Creative Industries 90,389 Financial and Business Services 126,100 Construction 206,600 Tourism Employees Industry
  • 21. TOMORROW’S INDUSTRIES (CONT) <ul><li>New Industry, New Jobs - UK industry strategy. Get in behind growth potential of: </li></ul><ul><ul><ul><li>Low carbon </li></ul></ul></ul><ul><ul><ul><li>Digital markets </li></ul></ul></ul><ul><ul><ul><li>Life Science and pharmaceuticals </li></ul></ul></ul><ul><ul><ul><li>Advanced manufacturing </li></ul></ul></ul><ul><ul><ul><li>Professional and financial services </li></ul></ul></ul><ul><ul><ul><li>Engineering construction </li></ul></ul></ul><ul><ul><ul><li>Services and products for ageing society </li></ul></ul></ul><ul><li>Public sector …… ? </li></ul><ul><ul><li>Around 23% of Scotland’s jobs – approx 572,000 </li></ul></ul><ul><ul><li>Cuts a certainty, size of cuts unknown (10-30%?) </li></ul></ul><ul><ul><li>… although many of jobs still need to be done </li></ul></ul>
  • 22. TOMORROW’S OCCUPATIONS <ul><li>Groups expected to show the most significant net increases at UK level: </li></ul><ul><ul><li>managers & senior officials (+ 872k, 1.7% pa) </li></ul></ul><ul><ul><li>professional occupations (+ 643k, 1.5% pa) </li></ul></ul><ul><ul><li>associate professional & technical occupations (+ 654k, 1.4% pa) </li></ul></ul><ul><li>Declines projected for: </li></ul><ul><ul><li>administrative, clerical & secretarial </li></ul></ul><ul><ul><li>skilled manual & electrical trades </li></ul></ul><ul><ul><li>other skilled trades </li></ul></ul><ul><li>Replacement demand will still mean many vacancies in declining areas </li></ul>Source: UKCES
  • 23. DEMOGRAPHIC CHANGE <ul><li>Young people (16-19) currently at peak levels (SEE CHART) </li></ul><ul><li>Decline in absolute and proportionate terms through next decade (SEE CHART) </li></ul><ul><li>Should make labour market entry easier </li></ul>
  • 24. 16 to 19 Year Olds in Scotland, 2008 to 2028
  • 25. Change in16-19 and 16-64 Year Olds (2008 = 100)
  • 26. SOME CONCLUSIONS <ul><li>Growing unemployment for young people with particular concerns around </li></ul><ul><ul><li>More rapid growth of long term unemployment </li></ul></ul><ul><ul><li>High percentage on IB and IS </li></ul></ul><ul><li>Employment levels likely to be depressed for some time – probably at least 3/4 years </li></ul><ul><li>Scotland’s biggest sector – public sector – likely to take big cuts </li></ul><ul><li>What employers looking for not likely to change – basic and core/soft skills </li></ul><ul><li>Demographic trends favour younger age group over next decade </li></ul>
  • 27. MESSAGES FOR EDUCATION <ul><li>Better understanding of credit and finance!! </li></ul><ul><ul><li>Risks and returns </li></ul></ul><ul><li>Better understanding of how economy changing </li></ul><ul><ul><li>What are new industries and jobs? </li></ul></ul><ul><ul><li>What does these actually mean – ‘green jobs’!! </li></ul></ul><ul><ul><li>What education and skills needed to access them? </li></ul></ul><ul><ul><li>Many traditional industries and occupations will continue to be there </li></ul></ul><ul><li>Need flexible system on vocational skills </li></ul><ul><ul><li>Continuing demand for more traditional skills (e.g. construction) </li></ul></ul><ul><ul><li>Which specific demands will grow most quickly out of recession - hard to call … </li></ul></ul><ul><ul><li>… so need to identify emerging trends quickly and respond quickly </li></ul></ul>
  • 28. MESSAGES FOR EDUCATION (CONT) <ul><li>Building strong base of transferable skills – fit needs of all employers, and indeed life in general </li></ul><ul><ul><li>Basic skills </li></ul></ul><ul><ul><li>Core/soft skills </li></ul></ul><ul><li>Opportunity to create more enterprising attitudes and behaviours – build Scotland’s business base </li></ul><ul><ul><li>Correcting for population Scotland has only around 85% of the businesses, and new business starts compared to UK </li></ul></ul><ul><li>Generally create more resourceful young people – which I think Determined to Succeed is all about </li></ul>

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