Full employment and good jobs for all: Why the UK is seeing a lopsided jobs recovery

Article

The UK economy is on its way to recovery. But all is not well. Many jobs have still not returned. And without policy support its entrenched weaknesses, such as insecure work and low pay are here to stay. There are three key aspects to this.

First, there is still a huge jobs gap – jobs that have been hit by the pandemic but have not returned. Despite some firms having difficulties of filling vacancies in particular jobs (such as for HGV drivers), the broader picture across sectors is less favourable. There are still more than 2 million ‘missing’ jobs in the economy. Especially low-paid workers are at heightened risk of being hit by the end of government support schemes – both in the near term (e.g. end of furlough) and medium term (e.g. low public investment).

Second, even pre-pandemic the economy was not at full employment and is not on track to achieve this. As before, we are in a ‘depressed economy’, stuck below its potential, growing more slowly than it could. This also means there are not enough ‘good jobs’ – those that provide security and at least a living wage – for everyone. Relatedly, many people are underemployed: they would like to get more hours but cannot secure enough to achieve a better standard of living. And over a quarter of low earners are in insecure work, uncertain as to whether they will have enough work the next week, or next month.

Third, job polarisation continues. Trends seen over the last decade in the labour market are being exacerbated by the pandemic, some of them good some of them bad. On the good side, more high-paying jobs are being created. On the bad side, many mid-pay and low-pay jobs are being lost. Again, this shows that the labour market is lopsided – and those at the bottom end of the pay spectrum are losing out the most.

None of this is inevitable. Starting at this autumn’s spending review, the government has the chance to create an economy that provides full employment and good jobs for all.

Related items

  1. Who gets a good deal? Revealing public attitudes to transport in Great Britain

    Transport isn’t working. That’s the message from the British public. This is especially true if you’re on a low income, disabled or living in the countryside. The cost of living crisis has exposed the shortcomings of our transport system,…
  2. Man using AI chatbot

    Transformed by AI: How generative artificial intelligence could affect work in the UK – and how to manage it

    Technological change is a good thing. It has brought exponential gains to living standards and is the foundation of modern society. Yet unmanaged technological change has always come with risks and disruptions.

  3. Celebrating 20 years of IPPR North

    For two decades IPPR North has been at the centre of the debate about how to rebalance England's regions. Here we take stock of how far we have come and the role we have played in shaping the "levelling up" debate.