tag:theconversation.com,2011:/id/topics/joblessness-6300/articlesJoblessness – The Conversation2023-07-13T13:27:35Ztag:theconversation.com,2011:article/2083832023-07-13T13:27:35Z2023-07-13T13:27:35ZStreet gangs in South Africa and Canada are worlds apart - but they have a great deal in common<figure><img src="https://images.theconversation.com/files/534820/original/file-20230629-25-xiuneg.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A former gang member in Cape Town, South Africa, shows off his tattoos.</span> <span class="attribution"><span class="source">Courtesy Dariusz Dziewanski</span></span></figcaption></figure><p>At first glance, it would appear that there’s little in common between the vast plains of the Canadian Prairies and the mountainous swells of South Africa’s southernmost coastline. But take a closer look into cities like Calgary, Winnipeg, and Saskatoon, on one hand, and Cape Town, on the other, and you’ll come across the gangs in each city. </p>
<p>Although they exist in different socioeconomic, historical, and geographic contexts, our <a href="https://link.springer.com/article/10.1007/s10612-022-09659-4">recent paper</a> finds that street gangs in Cape Town have key things in common with those in Prairie cities. Both are subcultural groups seeking empowerment and protection in areas defined by structural oppression and exclusion. </p>
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Read more:
<a href="https://theconversation.com/the-cape-town-gangsters-who-use-extreme-violence-to-operate-solo-143750">The Cape Town gangsters who use extreme violence to operate solo</a>
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<p>As a criminologist with extensive research experience in South Africa and a <a href="https://www.metisnation.org/culture-heritage/#:%7E:text=Who%20are%20the%20M%C3%A9tis%3F,Nations%20women%20and%20European%20men.">Métis</a> professor of Indigenous studies in Canada, we’ve both studied how and why individuals become engaged in street gangs in our respective countries of interest. </p>
<p>Researchers often overlook the similarities between street gang involvement and its connection to marginalisation and colonisation in South Africa and Canada. Our paper compared the life histories of 24 gang members from Cape Town to those of 53 members in Prairie cities. Our findings are represented through the accounts of two former gang members, Gavin and Roddy, in South Africa and Canada.</p>
<p>Whether in South Africa, Canada, or elsewhere, gangs are an embedded, systemic feature of unequal and exclusionary urban landscapes. They are often an indication of larger problems in the societies in which they exist. The deep-rooted contours of discrimination, disenfranchisement, and disempowerment – past and present – shape social life in Cape Town and on the Canadian Prairies. They create the conditions in which many young <a href="https://www.britannica.com/topic/Coloured">Coloured</a> and Indigenous men and women turn to gangs. </p>
<h2>Gavin and Roddy</h2>
<p>The paper presented in this article adds to a small but growing body of <a href="https://academic.oup.com/minnesota-scholarship-online/book/21312">gang literature</a> that draws comparisons across international contexts.</p>
<p>Gavin, a long-time member of the Mongrels gang, grew up with an abusive father in an impoverished informal settlement on the outskirts of Cape Town. He explained:</p>
<blockquote>
<p>There’s no jobs, right. It’s the gangsters here that have the money. They put food on the table … It’s what I was attracted to. </p>
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<p><a href="https://theconversation.com/heres-how-some-of-cape-towns-gangsters-got-out-and-stayed-out-170485">Street cultural gang research</a> suggests that, for those living in tough circumstances, aggression and violence are a sure way to get respect – or “street cred”. Says Gavin:</p>
<blockquote>
<p>The reason (gangsters) shoot constantly – that they do it every day – is they want to … make a statement and become famous – put their name out. Then he has the power…</p>
</blockquote>
<p>For Roddy, a member of the Native Syndicate in Winnipeg, Manitoba, respect was associated with <a href="https://www.annualreviews.org/doi/pdf/10.1146/annurev.anthro.32.061002.093426">“acting crazy”</a>:</p>
<blockquote>
<p>At the time, being crazy gave you that status and people knew you.</p>
</blockquote>
<p>Roddy also spoke about the same challenges Gavin faced, and how being in a gang provided a solution:</p>
<blockquote>
<p>No water, no money, no brotherhood … the identity of something (the gang) made you feel important … I felt so awesome when I joined the gang, I felt like: wow your problems are over. I didn’t even know what I was getting into. </p>
</blockquote>
<p>Although Gavin and Roddy grew up on different sides of the world, each saw gangs and street culture as a way to gain access to the basic amenities of life where legitimate opportunities were not afforded.</p>
<h2>Mapping marginality</h2>
<p>Cape Town’s most powerful street gangs are found in <a href="https://africasacountry.com/2019/09/john-w-fredericks-1946-2019">communities</a> that are predominantly Cape Coloured – a multiracial ethnic category in South Africa – and often beset by <a href="https://businesstech.co.za/news/government/688371/south-africas-unemployment-rate-ticks-higher/">joblessness</a> and <a href="https://businesstech.co.za/news/lifestyle/407087/cape-town-now-ranks-as-the-8th-most-violent-city-in-the-world/">violence</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/534823/original/file-20230629-13286-3tbalc.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A block of apartments and a parking lot in a modest area." src="https://images.theconversation.com/files/534823/original/file-20230629-13286-3tbalc.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/534823/original/file-20230629-13286-3tbalc.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/534823/original/file-20230629-13286-3tbalc.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/534823/original/file-20230629-13286-3tbalc.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/534823/original/file-20230629-13286-3tbalc.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/534823/original/file-20230629-13286-3tbalc.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/534823/original/file-20230629-13286-3tbalc.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">A housing project in a peripheral part of Cape Town where gangs are common.</span>
<span class="attribution"><span class="source">Courtesy Dariusz Dziewanski</span></span>
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</figure>
<p>In Winnipeg and other Prairie cities, gang membership is dominated by <a href="https://uofmpress.ca/books/detail/settler-city-limits">Indigenous youth</a> living in marginalised neighbourhoods that are seen as gang controlled. </p>
<p>Gang membership in each research context has long colonial roots linked to historical struggles of Coloured and Indigenous populations to endure successive state campaigns directed at their cultural erasure through institutionalised violence. </p>
<p>For example, in South Africa, the term “Coloured” was produced through colonial efforts to force people of diverse geographical and cultural origins into a single <a href="https://www.tandfonline.com/doi/abs/10.1080/02582479208671739">racial classification</a>. Later, <a href="https://www.sahistory.org.za/article/cape-town-segregated-city#:%7E:text=Between%201957%20and%201961%2C%20an,proclaimed%20for%20%27white%27%20people.">forced relocations</a> under the <a href="https://www.sahistory.org.za/article/history-apartheid-south-africa">apartheid</a> regime violently tore apart Coloured communities – as well as other racialised groups – to make space for white-owned real estate in the city centre. This encouraged the <a href="https://theconversation.com/cape-towns-bloody-gang-violence-is-inextricably-bound-up-in-its-history-121384">formation of gangs</a> that provided adrift youth with a sense of belonging, purpose and empowerment.</p>
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<a href="https://images.theconversation.com/files/535549/original/file-20230704-20097-jom9rr.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A building with graffiti on the roof, reading " src="https://images.theconversation.com/files/535549/original/file-20230704-20097-jom9rr.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/535549/original/file-20230704-20097-jom9rr.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=290&fit=crop&dpr=1 600w, https://images.theconversation.com/files/535549/original/file-20230704-20097-jom9rr.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=290&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/535549/original/file-20230704-20097-jom9rr.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=290&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/535549/original/file-20230704-20097-jom9rr.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=365&fit=crop&dpr=1 754w, https://images.theconversation.com/files/535549/original/file-20230704-20097-jom9rr.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=365&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/535549/original/file-20230704-20097-jom9rr.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=365&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Gang graffiti in Canada.</span>
<span class="attribution"><span class="source">Courtesy Robert Henry</span></span>
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<p>Similarly across the Prairies, street gangs have emerged due to the fragmentation of Indigenous families and identities. This occurred first through the <a href="https://www.rcaanc-cirnac.gc.ca/eng/1450124405592/1529106060525">Indian residential school policy</a>, which removed children from their families, placing them in state and church run schools. Here they were stripped of their cultures and languages, and many children died. It later also happened through <a href="https://uofmpress.ca/books/detail/settler-city-limits">child welfare policies</a> which <a href="https://www.thecanadianencyclopedia.ca/en/article/sixties-scoop">scooped</a> children away from their families and placed them in non-Indigenous homes. Settler colonial policies such as these have created the social conditions and inequities that enable Indigenous street gangs to emerge and expand. </p>
<h2>What this means</h2>
<p>Actions taken in the streets can seem random or senseless to the outside observer. But consistently acting “crazy” and <a href="https://theconversation.com/the-cape-town-gangsters-who-use-extreme-violence-to-operate-solo-143750">seeking violent confrontation</a> expands a gang member’s social and personal esteem by conforming to gang ideals of toughness and fearlessness. </p>
<p>Gang membership was a calculated move that provided Gavin, Roddy, and others in our study with what they believed to be their best chance to survive.</p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/534825/original/file-20230629-19-cww47l.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A man without a shirt pictured from behind, a prominent tattoo on his shoulders reads " src="https://images.theconversation.com/files/534825/original/file-20230629-19-cww47l.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/534825/original/file-20230629-19-cww47l.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=1067&fit=crop&dpr=1 600w, https://images.theconversation.com/files/534825/original/file-20230629-19-cww47l.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=1067&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/534825/original/file-20230629-19-cww47l.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=1067&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/534825/original/file-20230629-19-cww47l.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1340&fit=crop&dpr=1 754w, https://images.theconversation.com/files/534825/original/file-20230629-19-cww47l.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1340&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/534825/original/file-20230629-19-cww47l.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1340&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">A Prairie gang member in Canada.</span>
<span class="attribution"><span class="source">Courtesy Robert Henry</span></span>
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</figure>
<p>Denied access to legal sources of income and other forms of human capital, marginal populations turn to the streets and to violence. Gang membership helps them construct defiant identities. In the short term street culture gives gang members some hope for empowerment and connections to underground economies. </p>
<p>However, long-term prospects for gang membership are not promising. Most literature on street gangs has shown that involvement is often <a href="https://journals.sagepub.com/doi/10.1177/1748895815603774">short-lived and highly violent</a>. Although gang members like Gavin and Roddy do make it out, it’s not easy and can be deadly. </p>
<p>More needs to be done to create equitable and just societies in which young men and women do not feel that the gang is their only choice.</p><img src="https://counter.theconversation.com/content/208383/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Robert Henry receives funding from the Social Sciences and Humanities Research Council. </span></em></p><p class="fine-print"><em><span>Dariusz Dziewanski does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>More than being the social problem they are often made out to be, gangs are an indication of larger problems present in their societies.Dariusz Dziewanski, Honorary research affiliate, Centre of Criminology, University of Cape TownRobert Henry, Assistant professor, Indigenous Studies, University of SaskatchewanLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1764882022-02-04T18:17:50Z2022-02-04T18:17:50ZAmericans are returning to the labor force at a quickening rate – do they just really need the work?<figure><img src="https://images.theconversation.com/files/444570/original/file-20220204-19-1jc0lr.jpg?ixlib=rb-1.1.0&rect=0%2C14%2C4748%2C3146&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Plenty of places hiring, and more people looking for jobs.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/UnemploymentBenefits/dead64836f67465cb740142dcceba549/photo?Query=jobs%20market&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=2517&currentItemNo=21">AP Photo/Nam Y. Hu</a></span></figcaption></figure><p>The U.S. economy surprised analysts by adding 467,000 jobs in January, overcoming omicron concerns and continuing a long streak of gains, the <a href="https://www.bls.gov/news.release/empsit.nr0.htm">Bureau of Labor Statistics reported</a> on Feb. 4, 2022.</p>
<p>Yet at the same time, the unemployment rate ticked up a notch, <a href="https://www.bls.gov/news.release/empsit.a.htm">from 3.9% to 4%</a>. </p>
<p>Confused? Shouldn’t a large increase in jobs drive joblessness lower? </p>
<p>Usually, the main culprit behind these types of conflicting results is an increase in the number of people rejoining the labor market. I believe that must be the case here – and recent data show a clear trend in this direction – even though the BLS has adjusted its latest data in a way that makes it harder to see what’s going on or make historical comparisons.</p>
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<p>The share of working-age Americans either in work or looking for work – known as the labor participation rate – dropped steeply at the beginning of the pandemic.</p>
<p>But there are signs that labor participation may finally be turning around. From a low of 60.2% in April 2020, it has slowly risen since. And <a href="https://www.bls.gov/news.release/empsit.nr0.htm">the latest report</a> showed it reached 62.2% in December and January, the highest since the depths of the pandemic in mid-2020. The 2.2 percentage point gain since April 2020 may not seem huge, but it equates to about 5.8 million people rejoining the workforce.</p>
<p>As an <a href="https://scholar.google.com/citations?user=rRWXpyYAAAAJ&hl=en&oi=ao">economist who has been following the labor market closely for the past year</a>, I think people are being both encouraged and forced back into looking for work. My interpretation of the evidence suggests that <a href="https://theconversation.com/the-great-resignation-historical-data-and-a-deeper-analysis-show-its-not-as-great-as-screaming-headlines-suggest-174454">those who quit</a> and held off getting back into the labor force are now finding job opportunities that are too valuable to pass up. </p>
<p>For one thing, wages continue to increase – they grew rapidly in January 2022, with average hourly wages <a href="https://www.bls.gov/news.release/empsit.t19.htm">up 5.6% from a year earlier</a>. </p>
<p>At the same time, it appears that many businesses are responding to <a href="https://www.businessinsider.com/workers-want-work-life-balance-more-than-higher-pay-2021-8">workers’ desires for some flexibility</a> in scheduling and a better work/life balance. </p>
<p>Greater job flexibility can be seen in the jump in the number of Americans working remotely. The number of employees working from home because of the pandemic <a href="https://www.bls.gov/news.release/empsit.nr0.htm">increased to 15.4% of the workforce in January</a>, as the omicron variant spread and staffers were given the option to work from home. </p>
<p>But it isn’t just employer-driven factors behind the increase in labor participation.</p>
<p>For those without a job and stable income, personal resources can get depleted over time. Some people who left the workforce early on in the pandemic may have been able to get by and cover essential spending such as housing and groceries by relying on personal savings, support from family members or <a href="https://www.nber.org/digest-202202/covid-19-unemployment-benefits-slowed-return-work">generous pandemic-related government benefits</a>.</p>
<p>Those resources are not infinite, however. The <a href="https://fred.stlouisfed.org/series/UEMP27OV">number of long-term unemployed Americans declined</a> in January, following a trend observed throughout 2021, suggesting that a growing number are returning to the workforce. </p>
<p>Moreover, the <a href="https://www.bls.gov/news.release/cpi.nr0.htm">cost of living is soaring at the fastest pace</a> in 40 years. And for households that had been relying on a single income during the pandemic, the problem is made worse by the fact that wages are lagging behind, putting pressure on families. </p>
<p>In other words, job holdouts might not be able out hold out much longer if inflation continues to outpace wage increases.</p>
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<p>But even with the recent uptick in the labor participation rate, the U.S. economy still has a long way to go before the <a href="https://www.cnn.com/2021/12/25/economy/labor-shortage-early-retirement-charts/index.html">ongoing labor shortages</a> hammering companies end and the job markets return to pre-pandemic levels. </p>
<p><em>Editor’s note: This article was updated on Feb. 7, 2022 to take into account the U.S. Bureau of Labor Statistics’ revised statistics for December.</em></p>
<p>[<em>Over 140,000 readers rely on The Conversation’s newsletters to understand the world.</em> <a href="https://memberservices.theconversation.com/newsletters/?source=inline-140ksignup">Sign up today</a>.]</p><img src="https://counter.theconversation.com/content/176488/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christopher Decker does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>While the uptick in the unemployment rate in January may seem like bad news, the reason it rose actually shows the labor market returning to normal.Christopher Decker, Professor of Economics, University of Nebraska OmahaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1671652021-09-03T19:08:08Z2021-09-03T19:08:08ZPandemic hardship is about to get a lot worse for millions of out-of-work Americans<figure><img src="https://images.theconversation.com/files/419344/original/file-20210903-17-epc1ac.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5472%2C3645&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The door to unemployment benefits is closing for million of Americans.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/VirusOutbreakUnemployment/8467302427fd4c65b0facfa194f83a98/photo?Query=jobless%20AND%20U.S.&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=310&currentItemNo=38">AP Photo/John Minchillo</a></span></figcaption></figure><p>Millions of unemployed Americans lost pandemic-related jobless benefits as of Labor Day – just as surging cases of coronavirus <a href="https://www.bls.gov/news.release/empsit.nr0.htm">slow the pace of hiring</a>. </p>
<p>In all, an <a href="https://www.cnbc.com/2021/08/31/millions-of-americans-will-lose-unemployment-benefits-this-weekend.html">estimated 8.8 million people</a> stopped receiving unemployment insurance beginning on Sept. 6, 2021. Millions more will no longer get the extra US$300 a week the federal government has been providing to supplement state benefits. </p>
<p>But with the <a href="https://www.nytimes.com/interactive/2021/us/covid-cases.html">pandemic still raging</a> thanks to the rise of the delta variant, particularly in Southern states, the expiration of these benefits seems ill-timed. While some claim that the aid is no longer needed and doing more harm than good, <a href="https://sgpp.arizona.edu/people/jeff-kucik">we</a> <a href="https://clas.osu.edu/people/leonard.471">believe</a> that the data tell another story.</p>
<h2>Benefits lost</h2>
<p>Three federal programs created to support workers hurt by the COVID-19 pandemic and related lockdowns expired on Sept. 6:</p>
<ul>
<li><p>The Pandemic Extended Unemployment Compensation program offered 13 additional weeks in state unemployment benefits. An <a href="https://tcf.org/content/report/7-5-million-workers-face-devastating-unemployment-benefits-cliff-labor-day/">estimated 3.3 million</a> people who were getting benefits through this program lost them. </p></li>
<li><p>Pandemic Unemployment Assistance provided aid to gig workers and others not normally eligible for unemployment benefits. About <a href="https://www.dol.gov/ui/data.pdf">5.5 million people were receiving aid</a> because of this program – <a href="https://www.peoplespolicyproject.org/wp-content/uploads/2021/09/data.pdf">including those who just joined the rolls</a> in the second half of August.</p></li>
<li><p>The <a href="https://www.dol.gov/coronavirus/unemployment-insurance">Federal Pandemic Unemployment Compensation</a> program supplemented state benefits with an additional $300 in aid per week – down from $600 when it began in April 2020.</p></li>
</ul>
<p>All told, the end of these programs <a href="https://www.peoplespolicyproject.org/2021/09/02/35-million-people-will-lose-unemployment-income-on-sept-6/">may affect 35 million people</a> when you include families of the unemployed.</p>
<h2>Dropping aid didn’t boost jobs growth</h2>
<p><a href="https://www.wsj.com/articles/paying-americans-not-to-work-11587597150">Critics of these federal supplemental benefits claim</a> they reward Americans for not working by offering more in aid than they’d get from a job. This is why many Republican governors <a href="https://www.cnn.com/2021/05/11/politics/unemployment-benefits-gop-states/index.html">opted to drop out</a> of one or more of the federal programs in recent months. </p>
<p>“We see ‘Help Wanted’ signs everywhere,” <a href="https://gov.idaho.gov/pressrelease/its-time-to-get-back-to-work-gov-little-ends-idahos-participation-in-all-federal-pandemic-unemployment-compensation-programs/">Idaho Republican Gov. Brad Little said</a> on May 11, 2021. “We do not want people on unemployment. We want people working.”</p>
<p>But the data we have so far simply doesn’t back up these claims. </p>
<p>We compared employment growth in the 25 states that decided to drop the federal $300 supplement with those that kept it. Total employment in states that kept the federal supplement grew by 0.77% in July, compared with 0.54% for the states that gave it up, according to an analysis of <a href="https://www.bls.gov/news.release/laus.t03.htm">Bureau of Labor Statistics</a>, suggesting the benefits aren’t keeping workers on the sidelines. </p>
<p>The same pattern holds for sectors of the economy hit hardest by COVID-19. Leisure and hospitality jobs, such as waitstaff and cooks, accounted for <a href="https://www.bls.gov/news.release/empsit.t14.htm">roughly 1 in 4</a> of all jobs lost in 2020. Hiring rose 2.3% in those industries in states that kept the federal benefit, compared with 1.55% for other states. </p>
<p>This is consistent with a <a href="https://news.yale.edu/2020/07/27/yale-study-finds-expanded-jobless-benefits-did-not-reduce-employment">growing</a> <a href="https://www.cnbc.com/2021/08/23/ending-unemployment-benefits-had-little-impact-on-jobs-study-says.html">number</a> of <a href="https://www.cnbc.com/2021/07/22/cuts-to-unemployment-benefits-didnt-get-people-back-to-work-study-finds.html">studies</a> that show no correlation between the higher unemployment payments during the pandemic and lagging job growth.</p>
<p>We won’t know whether the trend continued until the state-by-state employment breakdown is released in mid-September. But for now, the evidence doesn’t support the claim that benefits keep folks at home.</p>
<h2>Jobless Americans still need support</h2>
<p>We do know that people who want to work are still being prevented from doing so because of COVID-19.</p>
<p>The <a href="https://www.bls.gov/news.release/empsit.nr0.htm">latest jobs report</a>, released on Sept. 3, 2021, showed that 5.6 million people were unable to work in August because their employer closed or lost business because of the pandemic, up from 5.2 million in July. </p>
<p>That may help explain why companies hired only 235,000 in August – <a href="https://www.bloomberg.com/news/articles/2021-09-03/u-s-jobs-post-slowest-gain-in-seven-months-amid-delta-spread?srnd=premium&sref=Hjm5biAW">a third of what economists had expected</a>. And there were no gains in leisure and hospitality, which <a href="https://www.bls.gov/web/empsit/ceseeb3a.htm">pay some of the lowest wages of any industry</a>. </p>
<p>As recently as late May, before the <a href="https://www.science.org/news/2021/08/what-does-delta-variant-have-store-us-we-asked-coronavirus-experts">delta variant began causing caseloads to climb</a>, pandemic-related unemployment claims were falling across all 50 states. Then, over June and July, <a href="https://oui.doleta.gov/unemploy/docs/weekly_pandemic_claims.xlsx">claims spiked</a> again as COVID-19 cases rippled across the country. </p>
<p><a href="https://oui.doleta.gov/unemploy/content/chariu2021/2021Jun.html">Nearly a third</a> of those currently unemployed come from three sectors of the economy: <a href="https://www.bls.gov/oes/current/oes_stru.htm#00-0000">health care and social assistance</a>; accommodation and food services; and <a href="https://www.bls.gov/oes/current/naics2_44-45.htm">retail trade</a>. According to industry wage data, none of these sectors provides a median wage that meets the <a href="https://www.unitedforalice.org/national-overview">minimum survival budget</a>s of American households.</p>
<p>All this shows why these three federal programs are still so important. </p>
<p>The extended benefits give unemployed people more time to find a job while helping them cover basic expenses. Gig workers, like Uber drivers and other independent contractors, need unemployment benefits too, especially as <a href="https://www.prnewswire.com/news-releases/new-report-shows-us-gig-workers-hit-hard-by-covid-19-with-nearly-3-out-of-5-now-earning-less-than-1-000-per-month-301157657.html">60% of them lost income during the pandemic</a> and many continue to struggle as business activity remains subdued. These workers are also <a href="https://hbr.org/2020/07/gig-workers-are-here-to-stay-its-time-to-give-them-benefits">less likely</a> to receive employer-sponsored benefits like health care. </p>
<p>And the $300 federal supplement is important because pre-pandemic state benefits – which are typically about <a href="https://www.cnbc.com/2020/07/23/average-unemployment-insurance-payment-in-each-us-state.html">$340 a week</a> – <a href="https://www.nber.org/digest/jul20/unemployment-benefit-replacement-rates-during-pandemic">replaced only 30% to 50% of lost earnings</a>. Even with the supplement, for most people, it’s still less than what they were earning from their job.</p>
<h2>Tough choices ahead</h2>
<p>That’s why the expiring benefits mean so much to lower-income families, especially now that the <a href="https://theconversation.com/cdc-eviction-ban-ended-by-supreme-court-4-questions-about-its-impact-answered-by-a-housing-law-expert-166926">Supreme Court has struck down</a> the Centers for Disease Control and Prevention’s ban on evictions. </p>
<p>For many, losing the benefit could <a href="https://www.cbpp.org/research/poverty-and-inequality/new-data-millions-struggling-to-eat-and-pay-rent">be the difference between choosing</a> to pay for food or rent, or forgoing a doctor’s visit because of the <a href="https://www.cnbc.com/2020/03/11/nearly-1-in-4-americans-are-skipping-medical-care-because-of-the-cost.html">high costs</a> of health care.</p>
<p>But after the benefits expire on Labor Day, making ends meet and staying in their homes will be significantly harder for millions of American families.</p>
<p>[<em>Over 110,000 readers rely on The Conversation’s newsletter to understand the world.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=100Ksignup">Sign up today</a>.]</p>
<p><em>Article updated to provide more detail about author analysis of BLS data and add background on composition of the unemployed.</em></p><img src="https://counter.theconversation.com/content/167165/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Three pandemic-related unemployment benefit programs expire on Labor Day, putting millions of mostly low-income families in financial jeopardy.Jeffrey Kucik, Associate Professor of Political Science, University of ArizonaDon Leonard, Assistant Professor of Practice in City and Regional Planning, The Ohio State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1518222021-01-22T13:30:08Z2021-01-22T13:30:08ZHuge numbers of the formerly incarcerated are unemployed, but there are some promising solutions<figure><img src="https://images.theconversation.com/files/378406/original/file-20210112-23-pvs6rv.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C2865%2C1827&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Formerly incarcerated entrepreneur Coss Marte speaks at a conference in 2015.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/coss-marte-founder-ceo-conbody-speaks-onstage-at-the-wired-news-photo/473076754">Brad Barket/Getty Images for WIRED</a></span></figcaption></figure><figure class="align-center zoomable">
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<p>People who have been incarcerated face major challenges finding work after their release. About <a href="https://www.brookings.edu/research/work-and-opportunity-before-and-after-incarceration/">45% of formerly incarcerated Americans were unemployed</a> one year after leaving prison, according to a multiyear study the Brookings Institution released in 2018. </p>
<p>This is far higher than U.S. joblessness levels, even during the coronavirus pandemic. The overall U.S. rate spiked to <a href="https://fas.org/sgp/crs/misc/R46554.pdf">14.7% in April 2020</a>, <a href="https://www.bls.gov/news.release/pdf/empsit.pdf">receding to 6.7% by December</a> – nearly twice where it stood at the <a href="https://www.bls.gov/opub/ted/2020/unemployment-rates-in-15-states-were-lower-than-the-3-point-5-percent-u-s-rate-in-december-2019.htm">end of 2019</a>.</p>
<p>Three factors essential to a <a href="https://doi.org/10.1080/07418825.2010.535553">successful transition from prison</a> are employment, housing and transportation, and no one can afford stable housing or reliable transportation without employment. I’m <a href="https://scholar.google.com/citations?user=4_1lJzAAAAAJ&hl=en">researching two innovative ways</a> to combat unemployment among the formerly incarcerated. </p>
<p>One approach relies on <a href="https://www.investopedia.com/terms/s/social-enterprise.asp">social enterprises</a>, organizations that pursue a social mission while seeking to earn money. These organizations <a href="https://doi.org/10.1515/npf-2016-0009">employ formerly incarcerated people</a> for short periods of time. Some examples include <a href="https://homeboyindustries.org/">Homeboy Industries</a>, the world’s largest gang rehabilitation and reentry program, and <a href="https://ceoworks.org/">Center for Employment Opportunities</a>, the largest reentry employment provider in the country. </p>
<p>The other method, exemplified by the <a href="https://www.pep.org/about-us/">Prison Entrepreneurship Program</a>, is to have business professionals teach people who are incarcerated how to become entrepreneurs so they can launch their own businesses once they leave prison. These programs provide the skills, knowledge and connections needed to succeed as entrepreneurs.</p>
<p>Formerly incarcerated entrepreneurs include <a href="https://www.forbes.com/sites/annefield/2020/07/17/second-chance-studios-turning-ex-offenders-into-podcasting-prosand-helping-them-stay-out-of-prison/">Coss Marte</a>, who runs a fitness company; <a href="http://www.mission-launch.org/">Teresa Hodge</a>, who founded a Baltimore-based nonprofit focused on financial literacy, inclusive entrepreneurship and community engagement; and <a href="https://www.vice.com/en/article/gykav9/these-formerly-incarcerated-entrepreneurs-are-trying-to-keep-people-out-of-prison">Marcus Bullock</a>, who created an app that turns photos into postcards that get delivered to individuals who are incarcerated.</p>
<p>People who participate in social enterprises and prison entrepreneurship programs tend to <a href="https://www.mdrc.org/publication/more-job">earn more money</a> and are <a href="https://www.pep.org/icic-report/">less likely to return to prison</a> than their peers.</p>
<p>[<em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>.]</p><img src="https://counter.theconversation.com/content/151822/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>This research was supported by CTSA award number UL1TR000445 from the National Center for Advancing Translational Sciences (NCATS). Its contents are solely the responsibilities of the author and do not necessarily represent official views of NCATS or the National Institutes of Health.</span></em></p>Nearly half of formerly incarcerated Americans remain jobless for at least a year. But there are some creative solutions to this problem.Kymberly Byrd, Ph.D. Candidate, Community Research and Action, Vanderbilt UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1437882020-08-04T12:19:44Z2020-08-04T12:19:44ZYes, most workers can collect more in coronavirus unemployment than they earn – but that doesn’t mean Congress should cut the $600 supplement<figure><img src="https://images.theconversation.com/files/350932/original/file-20200803-22-1f28hx2.jpg?ixlib=rb-1.1.0&rect=4%2C49%2C2726%2C2002&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The $600 federal jobless benefit expired on July 31. </span> <span class="attribution"><span class="source">Joe Raedle/Getty Images</span></span></figcaption></figure><p>Americans who lost their jobs because of the pandemic had been getting a US$600 bump on top of state benefits in their weekly unemployment checks since March. That ended on July 31, and <a href="https://www.cnbc.com/2020/08/02/white-house-dems-still-agree-on-checks-but-disagree-on-unemployment.html">lawmakers are debating</a> whether to extend the program and if so by how much. </p>
<p><a href="https://www.axios.com/senate-republicans-unemployment-benefits-ab42a589-a2c1-4448-98ca-b2df08443361.html">Senate Republicans are arguing</a> it’s too generous to the <a href="https://www.bls.gov/news.release/pdf/empsit.pdf">18 million who are unemployed</a> and serves as a disincentive to returning to work. Their initial proposal in the ongoing negotiations would slash the benefit to $200 a week. </p>
<p>As an <a href="https://publicpolicy.umbc.edu/david-salkever/">empirical economist</a>, I wanted to see if their concerns about the disincentive were valid. So I analyzed data on earnings and unemployment benefits to estimate the share of benefit-eligible workers who could collect more on the dole than on the job. </p>
<h2>Replacement wages</h2>
<p>I started my analysis by looking at 2019 <a href="https://www.census.gov/programs-surveys/cps.html">Current Population Survey</a> data to estimate weekly earnings of private-sector employees, both nationally and state by state. I then adjusted the numbers for wage inflation and compared the results with jobless benefits and “replacement wages,” which vary from state to state. </p>
<p>Iowa is the <a href="https://oui.doleta.gov/unemploy/ui_replacement_rates.asp">most generous</a> and replaces 49% of a worker’s weekly wages with a cash benefit when he or she loses a job involuntarily, while Alaska is the stingiest and replaces only 28% of income. I estimated that on average the replacement rate for all workers in the U.S. was about a third. </p>
<p>Once the $600 federal supplement is added in, the national average wage replacement rate soars to 127%. On an individual basis, I found that 56% of eligible workers would receive more in benefits than they would earn gainfully employed. Among those workers, the average excess benefit was $253. </p>
<p>This figure also varies in each state, depending on replacement rates as well as average weekly earnings. For example, benefits exceed their earnings for little more than a third of workers in Washington, D.C., while that figure is 75% in New Mexico. </p>
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<p>If Congress passes a lower federal supplement of $200, the result would drastically change the picture. As a result, I estimate only 9.5% of workers across the country would receive more in benefits than what they could earn – on average about $61 – and the replacement rate would drop by half to about 65%. </p>
<p>The Republican plan would eventually have the $200 supplement <a href="https://www.cnbc.com/2020/07/28/how-senate-heals-act-enhanced-unemployment-would-work.html">replaced</a> with a system that provides workers with a combined state and federal benefit equal to a replacement rate of 70%. The federal share would be capped at $500. </p>
<h2>Why $600 is still important</h2>
<p>While Republicans are right that the $600 jobless benefit may seem high, that alone does not mean it should be cut. </p>
<p>The unemployment insurance <a href="https://www.brookings.edu/blog/up-front/2020/07/20/how-does-unemployment-insurance-work-and-how-is-it-changing-during-the-coronavirus-pandemic/">program started</a> in 1935 soon after the Great Depression ended with two major objectives: to provide temporary partial wage replacement to unemployed workers and to help stimulate the economy during recessions. </p>
<p>The second objective is important. With the U.S. economy sinking into recession, a more generous supplement acts as a powerful stimulus. Consumer spending <a href="https://www.marketplace.org/2020/04/06/whats-gonna-happen-to-the-consumer-economy/">makes up more than 70% of the economy</a>, and most of those who receive the benefit will spend it quickly. This powerful and ongoing jolt <a href="https://www.cnbc.com/2020/07/10/unemployment-boosts-will-help-recovery-more-than-new-stimulus-checks.html">would help revive the economy</a> – or at least keep it alive – as well as <a href="http://www.nber.org/papers/w27216">offset</a> <a href="https://www.theatlantic.com/ideas/archive/2020/03/coronavirus-will-supercharge-american-inequality/608419/">worries that economic inequality</a> will soar as a result of the pandemic.</p>
<p>In addition, unemployment insurance only replaces wages. A job often comes with other benefits, such as health insurance and retirement plans. Even full-time service workers in the private sector, who as a group earn less than $15 per hour in wages, <a href="https://bls.gov/ecec/ececqrtn.pdf">receive an average of $1.99 per hour</a> in employer-paid insurance, mostly for health care.</p>
<p>Overall, non-cash job benefits amount on average to 19% of total employee pay. Factoring in that non-cash dollar value reduces the average replacement rate to 108% and lowers the share of employees receiving excess benefits from 56% to 43%. </p>
<p>[<em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>.]</p>
<p>Finally, employment insurance works in a way that limits its ability to act as a disincentive to work. People who quit their jobs voluntarily are ineligible for benefits. And someone without a job who receives a suitable offer of employment is no longer eligible to continue receiving benefits. That’s one explanation cited in a recent study by Yale economists that <a href="https://news.yale.edu/2020/07/27/yale-study-finds-expanded-jobless-benefits-did-not-reduce-employment">found no evidence</a> that the $600 federal supplement reduced employment. </p>
<p>Altogether, I find Republican concerns that the $600 supplement dissuades work unpersuasive in the context of the current pandemic. A generous policy that helps support the economy and aids those at <a href="https://theconversation.com/landlord-leaning-eviction-courts-are-about-to-make-the-coronavirus-housing-crisis-a-lot-worse-142803">risk of losing their homes</a> or struggling to <a href="https://www.cnbc.com/2020/07/23/millions-of-americans-cant-afford-enough-food-in-the-pandemic.html">feed their families</a> seems more sensible than one that <a href="https://money.yahoo.com/turns-getting-600-week-doesn-204213207.html">assumes someone collecting unemployment benefits could just as easily be working</a>.</p><img src="https://counter.theconversation.com/content/143788/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Salkever does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The $600 federal jobless benefit may be generous, but that doesn’t mean is isn’t what workers and the US economy need.David Salkever, Professor Emeritus of Public Policy, University of Maryland, Baltimore CountyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1415322020-07-05T19:49:48Z2020-07-05T19:49:48ZThe market is not our master — only state-led business cooperation will drive real economic recovery<figure><img src="https://images.theconversation.com/files/345432/original/file-20200703-33943-1ds7bej.jpg?ixlib=rb-1.1.0&rect=8%2C8%2C5975%2C3983&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">www.shutterstock.com</span></span></figcaption></figure><p>Like the coronavirus itself, joblessness can act as a pestilence on a society. </p>
<p>People who would have otherwise gone to their local restaurant, hairdresser, café or bar, taken a holiday in Queenstown or Taupo, or chosen to buy New Zealand lamb or beef in the supermarket, <a href="https://www.auckland.ac.nz/en/news/2020/06/05/go-forth-and-multiply--your-spending.html?utm_source=uabsjune2020&utm_medium=email&utm_term=bus,fin">will stop spending</a>.</p>
<p>In turn, the owners and employees of those businesses also stop spending. And so it goes on.</p>
<p>In the end, the fallout of mass joblessness will <a href="https://www.equalitytrust.org.uk/spirit-level">erode the social cohesion</a> that has got New Zealand through the past few months.</p>
<p>Some of this is inevitable, of course. Despite the massive <a href="https://treasury.govt.nz/information-and-services/nz-economy/covid-19-economic-response">public resources</a> pumped into keeping the economy afloat, some industries – most notably <a href="https://www.mbie.govt.nz/immigration-and-tourism/tourism-research-and-data/tourism-data-overview/tourism-data-factsheets-covid-19-response/">tourism and aviation</a> – are facing severe drops in revenue that will drive <a href="https://www.scoop.co.nz/stories/BU2005/S00085/alarming-impact-of-covid-19-on-tourism-industry-revealed.htm">joblessness and business closures</a>. </p>
<p>But it has been discouraging to see leaders in other industries trying to prepare their firms for a major recession driven by <a href="https://www.newshub.co.nz/home/money/2020/06/coronavirus-no-new-jobs-for-a-year-in-new-zealand-economist.html">unemployment</a> by creating yet more unemployment. </p>
<h2>Markets are not all-powerful</h2>
<p>When this is happening in sectors comparatively unaffected by the COVID-19 crisis it’s clear we urgently need fresh thinking and fast. </p>
<p>Traditional business strategy for many decades has stressed the need to <a href="https://www.emerald.com/insight/content/doi/10.1108/JBIM-03-2019-0130/full/html">adapt to the external environment</a>. Businesses must be willing to change to meet the demands of the market or respond to external shocks.</p>
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Read more:
<a href="https://theconversation.com/by-sacking-staff-and-closing-stores-big-businesses-like-the-warehouse-could-hurt-their-own-long-term-interests-140420">By sacking staff and closing stores, big businesses like The Warehouse could hurt their own long-term interests</a>
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<p>But, contrary to received wisdom, markets are not just the product of external forces. Nor are businesses simply at the mercy of what markets dictate.</p>
<p><a href="https://www.linkedin.com/groups/10494460/">Our research</a> explores what is called “<a href="https://www.marketshapinglab.com/">market-shaping</a>”. Viewed as systems, markets include more than just buyers and sellers, but other actors such as regulators, supporting industries, adjacent markets, and even informal stakeholders like pressure groups. </p>
<p>Market systems are actively created through the actions, assumptions, exchanges and rules within them. You might say a market is in a constant state of “becoming” – it is never static or fixed.</p>
<p>In practice this means managers do not always have to default to adapting to the external environment. Instead, a business – or any other market actor for that matter – can work to adapt the market to its own needs. </p>
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<h2>Sometimes cooperation trumps competition</h2>
<p>An <a href="https://www.sciencedirect.com/science/article/abs/pii/S0019850119305942?via%3Dihub">example</a> from the wine industry is instructive. In the early 2000s, the <a href="https://www.nzwine.com/en/media/story/innovation/">New Zealand Screwcap Wine Seal Initiative</a> convinced one of the world’s most staid, traditional markets to accept that a screw cap could seal a premium wine. </p>
<p>The campaign was driven by the massive financial losses winemakers were suffering due to poor-quality Portuguese corks. It involved changing the closely-held beliefs and practices of critics, restaurateurs, sommeliers, supermarket buyers, winemakers and, most importantly, vast numbers of consumers – in multiple global markets.</p>
<p>Similarly, Swiss-based NGO <a href="https://www.theglobalfund.org/en/">The Global Fund</a> has been extremely <a href="https://www.theglobalfund.org/media/2531/core_globalfundstrategy2017-2022_strategy_en.pdf">effective at market-shaping</a> by driving production and distribution of basic medicines to the developing world. They’ve done this by encouraging cooperation and collaboration between pharmaceutical manufacturers, funders, distributors and local communities.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/recession-hits-maori-and-pasifika-harder-they-must-be-part-of-planning-new-zealands-covid-19-recovery-137763">Recession hits Māori and Pasifika harder. They must be part of planning New Zealand's COVID-19 recovery</a>
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<p>Geneva-based private-public partnership <a href="https://www.gavi.org/">GAVI</a> has successfully <a href="https://www.gavi.org/sites/default/files/document/market-shaping--strategic-considerations-for-a-healthy-vaccine-marketplacepdf.pdf">done much the same</a> with vaccines for children in developing countries.</p>
<p>Market-shaping still preserves the beauty of markets as mechanisms that enable the generation of wealth like no other, and which reward entrepreneurship and innovation. And as long as they are shaped to deliver positive outcomes, markets can avoid the blunt instrument of over-regulation.</p>
<p>By extension, market-shaping is best achieved by multiple actors coming together and collaborating to achieve a shared goal. Much as <a href="https://www.un.org/en/un-chronicle/covid-19-and-alliance-multilateralism">multi-lateral international cooperation</a> will defeat COVID-19 more effectively than countries going it alone, economic recovery will happen faster with collective action. </p>
<p>And, as those innovative New Zealand winemakers showed, a shared crisis is a great motivator for collaboration.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/345431/original/file-20200703-33956-1gb1n4v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/345431/original/file-20200703-33956-1gb1n4v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=387&fit=crop&dpr=1 600w, https://images.theconversation.com/files/345431/original/file-20200703-33956-1gb1n4v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=387&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/345431/original/file-20200703-33956-1gb1n4v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=387&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/345431/original/file-20200703-33956-1gb1n4v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=487&fit=crop&dpr=1 754w, https://images.theconversation.com/files/345431/original/file-20200703-33956-1gb1n4v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=487&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/345431/original/file-20200703-33956-1gb1n4v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=487&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Market shaping in action: by cooperating, New Zealand’s wine industry changed the way the world viewed screw caps on bottles.</span>
<span class="attribution"><span class="source">www.shutterstock.com</span></span>
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<h2>Governments must take the lead</h2>
<p>For this to happen there will need to be bold leadership and a willingness to do things differently. </p>
<p>First, we need a shared platform for coordinating the development of a collaborative market-shaping strategy. It will probably be temporary and would be best developed by the state, extending the excellent work already being undertaken by treasuries in <a href="https://treasury.govt.nz/information-and-services/new-zealand-economy/covid-19-economic-response/package">New Zealand</a> and <a href="https://treasury.gov.au/coronavirus">Australia</a>.</p>
<p>After all, governments are one of the most powerful market-shapers in the economy. </p>
<p>Second, this platform would coordinate and encourage shared strategy development on a national scale. This will require diverse stakeholder groups to emerge from their various silos. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/shovel-ready-projects-ignore-important-aspects-of-community-resilience-139850">'Shovel-ready' projects ignore important aspects of community resilience</a>
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<p>It will involve business leaders coming together with their competitors, supporting industries and supply-chain partners, regulators, shareholder representatives, unions, industry associations, and <a href="https://www.theaotearoacircle.nz/news/2020/5/3/the-fenwick-forum-aims-to-ensure-covid-19-economic-recovery-benefits-natural-capital">those calling</a> for a genuine reset of <a href="https://www.weforum.org/agenda/2020/06/covid19-reset-people-first-inequality/">economies around the world</a>. </p>
<p>The plan will focus on minimising economic recession through maximising both employment and sustainable practice.</p>
<p>And third, implementation of the plan will involve a coordinated private sector response coupled with targeted public investment that goes well beyond so-called shovel-ready projects.</p>
<p>Yes, the idea of competitors and their stakeholders coming together to agree on a shared path forward goes against every senior manager’s competitive instincts. And no, it will not be a silver bullet for businesses with immediate solvency concerns. </p>
<p>But it might just give the team of five million a shot at collectively beating the recession in the same way it beat the virus.</p><img src="https://counter.theconversation.com/content/141532/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jonathan Baker does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Collaboration is better than competition when it comes to making markets do what we want in an economic crisis.Jonathan Baker, Lecturer in Business Strategy, Auckland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1365592020-05-03T15:26:36Z2020-05-03T15:26:36ZEmploying youth during the coronavirus pandemic is a good investment<figure><img src="https://images.theconversation.com/files/330231/original/file-20200423-47794-1iwqivr.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C1810%2C1353&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Keeping young Canadians working during the global pandemic is important for a host of reasons.</span> <span class="attribution"><span class="source">(Pixabay)</span></span></figcaption></figure><p>The recent announcement of an <a href="https://www.cbc.ca/news/politics/cerb-emergency-benefits-trudeau-1.5532767">extension of the Canada Emergency Response Benefit (CERB) to part-time workers</a> is good news for young people in Canada. This may prove to be even more important to young people’s well-being than the subsequent announcement by the federal government that students in higher education can receive <a href="https://pm.gc.ca/en/news/news-releases/2020/04/22/support-students-and-new-grads-affected-covid-19">as much as $1,750 this summer</a>. Skills that cannot be learned in the classroom can be developed through continued participation in the paid labour market. </p>
<p>The <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/200409/dq200409a-eng.htm">Canadian Labour Force Survey, conducted in the third week in March</a>, shows that about 30 per cent of workers under aged 30 were employed part-time in their primary job in March 2020, compared to only 13 per cent among those over 30.</p>
<p>For those at the beginning of their working lives, the long-term impact of earnings lost to COVID-19 could be particularly large. Gaining work experience during the pandemic will help Canada’s young people to obtain the skills they’ll need in a post-pandemic world. </p>
<p>Young people will still need the communication and organizational skills that part-time work has traditionally provided them. They will need to learn how to work in teams, to manage their time and to accept guidance. These skills need to be learned by continuous practice. The incentive to practise these skills is high when work is paid.</p>
<p>Young people tend to be concentrated in a few key sectors of the Canadian labour market. In March 2020, the retail sector employed 18 per cent of workers under age 30, and the accommodation and food services sector a further 15 per cent. Workers older than 30 made up only five per cent of those employed in the sector prior to COVID-19. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/330212/original/file-20200423-47820-14q32to.jpg?ixlib=rb-1.1.0&rect=0%2C270%2C6016%2C3692&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/330212/original/file-20200423-47820-14q32to.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/330212/original/file-20200423-47820-14q32to.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/330212/original/file-20200423-47820-14q32to.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/330212/original/file-20200423-47820-14q32to.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/330212/original/file-20200423-47820-14q32to.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/330212/original/file-20200423-47820-14q32to.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Many Canadian young people work in the accommodation and food services sector.</span>
<span class="attribution"><span class="source">(Unsplash)</span></span>
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<p>Students who are completing their winter semesters are now facing the sudden end of on-campus jobs and a much-reduced market for summer jobs. Many students lost campus or other part-time jobs with the closure of restaurants, hotels and all recreational facilities towards the end of March. </p>
<p>Part-time work may be the best way to protect young people from the long-term labour market consequences of COVID-19. Because young people have relatively little work experience, losing the opportunity to obtain on-the-job skills may have more permanent consequences for their earnings potential. </p>
<p>The on-the-job learning curve is steepest at the beginning of working lives. To mitigate the long-term consequences of COVID-19 for labour productivity, this age group needs to be given particular support to continue working during the pandemic in essential jobs.</p>
<h2>Critical years</h2>
<p>There are also non-economic reasons why young people need strong support. Some <a href="https://doi.org/10.1037/0022-3514.57.3.416">social psychologists</a> consider the years between 18 and 25 to be critical for the lifelong formation of societal views. Evidence from the United States suggests that regional recessions in the 1970s had <a href="https://doi.org/10.1093/restud/rdt040">long-term effects on opinions about the efficacy of government</a> on respondents who experienced economic downturns in this age group. The additional psychological effects of social isolation and a pause in skills development may be particularly long-lasting for youth.</p>
<p>Recent history shows the need to protect the well-being of populations facing sudden joblessness and great uncertainty. The fall of the Soviet Union at the end of 1991 resulted in profoundly negative effects on <a href="https://doi.org/10.1016/j.jebo.2013.05.007">the well-being</a> and <a href="https://www.aeaweb.org/articles?id=10.1257/0895330053147921">mortality</a> of Soviet citizens. Social supports evaporated overnight. The huge declines in real incomes and increases in uncertainty caused by this event affected <a href="https://pdfs.semanticscholar.org/26e5/43ae5680b2f542c7ec6c894cf4cf34bf282f.pdf,%20https://www.sciencedirect.com/science/article/pii/S0305750X98000977">life expectancy</a> in <a href="https://doi.org/10.1016/S0305-750X(98)00113-2">former Soviet Union</a> countries for <a href="https://doi.org/10.1080/10826080500521664">many years</a>. </p>
<h2>Young workers affected immediately</h2>
<p>A comparison of usual-versus-actual hours worked in the March Labour Force Survey shows that COVID-19 was already having a pronounced effect on sectors employing youth even before non-essential businesses were told to close.</p>
<p>Among those working in accommodation and food services, hours of work in the week between March 15th to 21st were reduced from an average of 30 to less than 20. Those in retail reported usual work hours of 32 and actual of about 27.</p>
<p>Workers in other sectors also reported reductions in average hours worked in the March Labour Force Survey, but these were less dramatic than those for accommodation and food services. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/330211/original/file-20200423-47841-scwaml.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/330211/original/file-20200423-47841-scwaml.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/330211/original/file-20200423-47841-scwaml.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/330211/original/file-20200423-47841-scwaml.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/330211/original/file-20200423-47841-scwaml.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/330211/original/file-20200423-47841-scwaml.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/330211/original/file-20200423-47841-scwaml.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">The loss of hours was dramatic in March for those in the food services sector.</span>
<span class="attribution"><span class="source">(Pixabay)</span></span>
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<p>For example, in public administration, the average actual hours worked were reduced from 32 to 27, and in manufacturing, actual hours were on average 29 versus normal hours of 35. Those in mining and extractive industries and in agriculture also reported significant differences between normal and actual hours.</p>
<p>That 10-hour difference between normal and actual hours worked in accommodation and food services will have been all the more keenly felt because these workers were relatively low paid. Average earnings were just above $16 an hour in this sector, and about $20 an hour in retail. </p>
<p>In durable goods manufacturing, hourly wages were about $29 an hour, similar to the average wages of those in health care and social assistance.</p>
<h2>CERB will help</h2>
<p>Now that the CERB allows people to work part-time without becoming ineligible, many young people will be incentivized to work in jobs for which demand has increased during the COVID-19 shutdown. </p>
<p>This could mean working part-time to deliver groceries, medicines or other online orders, or working part-time from home. </p>
<p>As well, some may work in the health sector, may take on cleaning jobs, provide logistical support for COVID-19 testing or learn while on the job to perform other essential functions.</p>
<p>Even if these jobs aren’t well-paid, the support of CERB will keep these young people investing in their future.</p><img src="https://counter.theconversation.com/content/136559/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Now that Canadian youth can work part-time without becoming ineligible for government assistance, many will be incentivized to work in jobs in increased demand during the COVID-19 shutdown.Louise Grogan, Professor of Economics, University of GuelphLucia Costanzo, Data Analyst, Researcher, University of GuelphLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1361102020-04-13T21:38:27Z2020-04-13T21:38:27ZOfficial unemployment numbers don’t show the true crisis for workers affected by coronavirus<figure><img src="https://images.theconversation.com/files/327535/original/file-20200413-119836-1ytceut.jpg?ixlib=rb-1.1.0&rect=0%2C84%2C4336%2C3099&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Statistics Canada reports that more than one million Canadians lost their job in the first month of the coronavirus pandemic, but the official figures don't reflect the true impact on workers.</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Justin Tang</span></span></figcaption></figure><p>According to Statistics Canada, the <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/200409/dq200409a-eng.htm">official unemployment</a> rate has jumped to 7.8 per cent as more than one million Canadians lost their jobs in March due to the COVID-19 pandemic.</p>
<p>“The employment decline in March was larger than in any of the three significant recessions experienced since 1980,” Statistics Canada reported.</p>
<p>An additional 2.1 million people worked fewer than half their normal hours or not at all between March 15 and 21. Although these figures are troubling, they are also unsurprising. In the midst of a public health emergency, keeping people out of workplaces has been a necessary part of the social distancing strategy intended to stop the spread of COVID-19.</p>
<p>Yet the difficulty governments across Canada have had in meeting the needs of workers impacted by the coronavirus crisis has exposed the holes in our social safety net and the inadequacy of existing labour laws. </p>
<p>It’s important to recognize the official jobless numbers are underestimating the severity of the crisis for many working people. </p>
<p>For starters, even before this current crisis, <a href="https://www.cambridge.org/core/journals/journal-of-global-history/article/origins-of-informality-the-ilo-at-the-limit-of-the-concept-of-unemployment/5784F429875BA8151575AA5010D3712A">official unemployment</a> has grown increasingly difficult to measure due to the spread of precarious forms of employment.</p>
<h2>COVID-19 could heighten economic insecurity</h2>
<p>Despite the <a href="https://www.bankofcanada.ca/2020/03/economic-progress-report-we-all-have-work-to-do/">Bank of Canada’s</a> positive report on job growth over the past five years, <a href="http://closeesgap.ca/download/754/">many workers</a> remain involuntarily part-time or working fewer hours than they would like. Others are misclassified as self-employed or independent contractors. Still others are engaged in forms of paid work which elude clear categorization.</p>
<p>As the federal government indicated, more than <a href="https://globalnews.ca/news/6798760/canadas-march-jobs-report-coronavirus/">five million Canadians have applied</a> for emergency benefits since March 15, which suggests an unemployment figure of closer to 25 per cent. The full consequences of the current crisis for economically insecure workers are almost certainly not captured in the official count. </p>
<p>For instance, Canadian households are highly indebted. As of September 2019, <a href="https://business.financialpost.com/personal-finance/debt/canada-q3-household-debt-to-income-ratio-rises">average household debt to income</a> stood at 175.9 per cent. This means for every dollar of disposable income, Canadians owe about $1.76 in debt — a total that includes mortgages and credit cards debts.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/327537/original/file-20200413-125133-w7f1m0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/327537/original/file-20200413-125133-w7f1m0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=408&fit=crop&dpr=1 600w, https://images.theconversation.com/files/327537/original/file-20200413-125133-w7f1m0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=408&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/327537/original/file-20200413-125133-w7f1m0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=408&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/327537/original/file-20200413-125133-w7f1m0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=512&fit=crop&dpr=1 754w, https://images.theconversation.com/files/327537/original/file-20200413-125133-w7f1m0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=512&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/327537/original/file-20200413-125133-w7f1m0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=512&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Public health concerns over the coronavirus have led to the shutdown many workplaces, but Canada’s Employment Insurance needs to do more to help those workers who have lost their jobs.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Darryl Dyck</span></span>
</figcaption>
</figure>
<p>A <a href="https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2019/07/Unaccommodating%20-%20Rental%20Wage%20in%20Canada.pdf">study released last summer by the Canadian Centre for Policy Alternatives</a> demonstrates the growing gulf between wages and average rental costs in cities across the country. Perhaps most troubling, <a href="https://globalnews.ca/news/4870779/canadians-financial-insolvency-2019-mnp-ipsos-poll/">polls from a year ago</a> found that 46 per cent of respondents were $200 or less away from financial insolvency at month’s end, and 31 per cent don’t earn enough to cover bills and debt payments. </p>
<p>At present, public health concerns dictate that many people remain away from work. But cuts and reforms to Canada’s Employment Insurance program undermine this objective. </p>
<h2>The erosion of Employment Insurance</h2>
<p>At its strongest in the 1970s when it covered over two-thirds of workers who experienced unemployment, EI has been <a href="https://policyoptions.irpp.org/magazines/employment-insurance/a-short-history-of-ei-and-a-look-at-the-road-ahead/">drastically overhauled</a> over the past decades. <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/191114/t001a-eng.htm">Fewer than half</a> of unemployed workers now receive benefits. Onerous eligibility criteria and a low wage replacement rate of only 55 per cent up to a maximum of insurable earnings make the program both a shell of its former self and a laggard compared to <a href="https://stats.oecd.org/Index.aspx?DataSetCode=NRR">more generous unemployment insurance programs in Europe</a>. </p>
<p>In response to the inadequacy of EI, the federal government introduced the <a href="https://www.canada.ca/en/services/benefits/ei/cerb-application.html">Canadian Emergency Response Benefit</a> (CERB). The CERB’s $500 weekly benefit will help some workers who do not qualify for EI, such as the self-employed and other freelance workers. </p>
<p>However, its impact is also limited by eligibility criteria that dictate workers must be without labour income or have not voluntarily quit their job because of COVID-19. This leaves out workers on reduced hours or whose bosses refuse to lay them off, as well as those who wish to leave unsafe working conditions. </p>
<h2>Putting workers at risk</h2>
<p><a href="https://nowtoronto.com/news/coronavirus-pandemic-workers-rights/">For many of those continuing to work</a>, workplace health and safety risks are considerable. A lack of <a href="https://toronto.ctvnews.ca/ontario-needs-to-reinstate-paid-sick-days-amid-covid-19-pandemic-health-care-workers-say-1.4851034">paid sick days</a> exacerbates these hazards. </p>
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Read more:
<a href="https://theconversation.com/employers-need-to-give-paid-sick-days-to-fight-the-coronavirus-133601">Employers need to give paid sick days to fight the coronavirus</a>
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<p>In Ontario, Premier Doug Ford repealed many of the previous government’s reforms to the Employment Standards Act (ESA), <a href="https://toronto.ctvnews.ca/pc-government-to-pass-bill-to-freeze-minimum-wage-eliminate-paid-sick-days-1.4185507">including eliminating the right to paid sick days</a>. </p>
<p>The Conservative government has amended the ESA during the pandemic to allow <a href="https://www.ontario.ca/document/your-guide-employment-standards-act-0/sick-leave">emergency leave</a> related to COVID-19. But because this leave is unpaid, the ability of low-wage workers to take it is limited. </p>
<p>The reforms made to unemployment benefits and employment standards over the past decades were designed to reduce regulations that protect workers on the faulty assumption that this would improve efficiency and enhance economic growth. The mistakes of this approach are all too apparent during a public health crisis when workers need financial support in order to stay away from work. </p>
<h2>Wage subsidies and a lack of worker power</h2>
<p>The Canadian government has further tried to solve the problem of getting money into people’s hands while they are away from work through a wage subsidy program. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/327541/original/file-20200413-177903-920v0k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/327541/original/file-20200413-177903-920v0k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=351&fit=crop&dpr=1 600w, https://images.theconversation.com/files/327541/original/file-20200413-177903-920v0k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=351&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/327541/original/file-20200413-177903-920v0k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=351&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/327541/original/file-20200413-177903-920v0k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=442&fit=crop&dpr=1 754w, https://images.theconversation.com/files/327541/original/file-20200413-177903-920v0k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=442&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/327541/original/file-20200413-177903-920v0k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=442&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Official jobless figures from Statistics Canada don’t reflect the true picture of the number of people who have been left jobless or underemployed because of the coronavirus pandemic.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Sean Kilpatrick</span></span>
</figcaption>
</figure>
<p>The <a href="https://www.canada.ca/en/department-finance/economic-response-plan/wage-subsidy.html">Canada Emergency Wage Subsidy</a> is aimed to encourage employers to retain or recall employees by providing 75 per cent of an employee’s pre-crisis wage, up to $847 per week for up to 12 weeks. In order to receive the subsidy, employers must demonstrate a 15 per cent drop in revenue for March 2020 and a 30 per cent drop for the following months. </p>
<p>The government has also introduced a process for refunding employer-paid contributions to EI and the Canada and Québec pension plans. </p>
<p>The <a href="http://www.progressive-economics.ca/2020/03/30/making-the-covid19-wage-subsidy-program-work-better-for-workers/">total cost of the wage subsidy</a> could be as much as $80 billion over three months, more than the federal government’s total transfers to provinces for health care, social assistance and equalization payments for the whole year.</p>
<h2>Wage subsidies a gift for employers?</h2>
<p>The Canadian Centre for Policy Alternatives <a href="http://behindthenumbers.ca/2020/03/30/much-stronger-conditions-needed-on-federal-wage-subsidy-program/">projects that many employers will receive more through the program than they lose in revenue</a>. As such, the wage subsidy has become controversial because it could turn into a substantial gift to employers and potentially be repaid through cuts to social services in the future. </p>
<p>There are additional concerns that nothing is in place to ensure employers pay the remaining 25 per cent of workers’ wages, or that large employers aren’t able to take undue advantage of the program. </p>
<p>However, some in the <a href="https://canadianlabour.ca/canadas-unions-welcome-quick-passage-of-wage-subsidy-bill/">labour movement support a wage subsidy program</a> as a way to keep people in their jobs and reduce the long-term employment disruptions caused by the COVID-19 crisis.</p>
<p>In this vein, countries like <a href="https://www.theatlantic.com/ideas/archive/2020/03/denmark-freezing-its-economy-should-us/608533/">Denmark have instituted more worker-friendly</a> versions of a wage subsidy. The difference is that Denmark has much greater <a href="https://stats.oecd.org/Index.aspx?DataSetCode=TUD">union coverage and a collective bargaining system</a> where unions and employer associations largely negotiate contracts at the industry level. More co-ordinated labour relations systems like this give unions much greater power to shape policy. </p>
<p>In Canada, where <a href="https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1410013201">private sector union density is just 16 per cent</a> and contracts are mostly work-site based, workers lack comparable institutional power. In this sense, more co-ordinated economies with robust labour regulations are better able to manage the employment and social consequences of the pandemic. </p>
<p>The COVID-19 crisis should encourage us to look seriously at ways to transform our system of labour law and social protection in order to empower working people.</p><img src="https://counter.theconversation.com/content/136110/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Adam D.K. King does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The difficulty governments have had in meeting the needs of Canadian workers impacted by the coronavirus crisis has exposed holes in our social safety net and the inadequacy of existing labour laws.Adam D.K. King, Post-Doctoral Visitor, Department of Politics, York University, CanadaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1342902020-03-27T17:28:38Z2020-03-27T17:28:38ZAnother housing crisis is coming – and bailouts and eviction freezes won’t be enough to prevent many from losing their homes<figure><img src="https://images.theconversation.com/files/323655/original/file-20200327-146695-1yvvz5j.jpg?ixlib=rb-1.1.0&rect=90%2C188%2C5373%2C3448&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Unionized hospitality workers wait in line to apply for unemployment benefits.</span> <span class="attribution"><span class="source">AP Photo/Marcio Jose Sanchez</span></span></figcaption></figure><p><a href="https://fivethirtyeight.com/features/3-3-million-americans-filed-for-unemployment-last-week-almost-5-times-the-record-high/">Millions of Americans are suddenly out of work</a> as the financial and economic crisis sparked by the coronavirus pandemic deepens. Without an income, most of these people will have a hard time covering their expenses, including keeping a roof over their heads. </p>
<p>But even before the current crisis, <a href="https://www.hud.gov/program_offices/comm_planning/affordablehousing/">tens of millions of Americans struggled</a> to pay for housing, spending more than 30% – or even half – of their income on housing-related expenses. This leaves less money for other essentials such as food, health care and savings.</p>
<p>Governments have offered a variety of plans to support those hurt by the coronavirus pandemic, from <a href="https://www.nytimes.com/2020/03/25/us/politics/whats-in-coronavirus-stimulus-bill.html">direct payments and higher unemployment checks</a> to <a href="https://www.wsj.com/articles/coronavirus-outbreak-pushes-local-governments-to-freeze-home-evictions-11584892859">eviction freezes</a> and <a href="https://www.npr.org/2020/03/19/818343720/homeowners-hurt-financially-by-the-coronavirus-may-get-a-mortgage-break">mortgage relief</a>. </p>
<p>We are researchers who study the intersection of <a href="https://scholar.google.com/citations?user=6UhBmscAAAAJ&hl=en&oi=ao">housing</a> and <a href="https://scholar.google.com/citations?hl=en&user=256hL6IAAAAJ">health</a>. While these measures may tide over many Americans, we don’t believe they will be enough to help the most vulnerable endure the crisis or prevent many people from losing their homes.</p>
<h2>Unaffordable housing</h2>
<p>Lower-income households were already on the verge of a housing crisis before the pandemic thanks to a chronic shortage of affordable housing <a href="https://www.citylab.com/equity/2017/03/americas-affordable-housing-shortage-mapped/518391/">in the U.S.</a> </p>
<p>Housing affordability is largely measured as the ratio between housing-related expenditures and household income. Households that <a href="https://www.hud.gov/program_offices/comm_planning/affordablehousing/">spend 30% or more of their income</a> on rent or mortgage, property taxes, utilities and other expenses associated with their homes are considered “cost burdened” because it means they have insufficient financial resources for other basic needs including food and medicine. </p>
<p>The Department of Housing and Urban Development estimates 38 million, or over a quarter, of U.S. households were cost burdened in 2018. Of these, an <a href="https://www.hud.gov/program_offices/comm_planning/affordablehousing/">estimated</a> 12 million were spending over half of their annual income on housing costs, making them severely burdened. </p>
<p>Households earning US$35,000 or less made up 63% of these cost-burdened households. In 2019, a family living on one full-time minimum wage income was not able to afford local <a href="https://reports.nlihc.org/oor/">fair-market rent for a two-bedroom apartment</a> anywhere in the U.S. </p>
<p>Even worse, research by <a href="https://www.mdpi.com/2076-0760/7/10/194">us</a> and <a href="https://link.springer.com/article/10.1186/s12939-019-0943-0">others</a> shows that housing insecurity can be harmful to one’s mental and physical health.</p>
<p>And in a study by the Centers for Disease Control and Prevention, <a href="https://www.cdc.gov/pcd/issues/2015/14_0511.htm">researchers found</a> that people who were worried or stressed about having enough money to pay their rent or mortgage – described as housing insecure – were twice as likely to postpone medical treatment due to associated costs compared with people who felt secure. </p>
<h2>A grim unemployment picture</h2>
<p>Post-pandemic, we can only speculate about the impact, but we believe it’s going to get a whole lot worse for the poor. </p>
<p>In terms of employment, the situation is grim. A <a href="https://www.bloomberg.com/news/articles/2020-03-26/u-s-jobless-claims-surged-to-record-3-28-million-last-week?srnd=premium&sref=Hjm5biAW">record 3.28 million people</a> filed for unemployment insurance in the week ended March 21, <a href="https://fred.stlouisfed.org/series/ICSA">more than four times</a> the previous high. </p>
<p>And that figure may underestimate the ultimate toll with early <a href="https://www.npr.org/2020/03/17/817158521/poll-nearly-1-in-5-households-have-lost-work-because-of-pandemic">surveys</a> indicating that about 1 in 5 households have been affected by unemployment due to the pandemic. The <a href="https://www.jobqualityindex.com/">US Private Sector Job Quality Index</a> estimates that up to 37 million jobs could be lost in the short-term, or about 23% of the <a href="http://www.dlt.ri.gov/lmi/laus/us/usadj.htm">U.S. workforce</a>. </p>
<p>The poorest Americans are expected to be <a href="https://www.theatlantic.com/ideas/archive/2020/03/coronavirus-will-supercharge-american-inequality/608419/">hit the hardest</a>, millions of whom will be at risk of losing their homes through <a href="https://www.citylab.com/equity/2020/03/coronavirus-income-loss-paying-rent-eviction-housing-covid19/607426/">eviction</a> and foreclosures. An increase in homeless populations will in turn put more pressure on <a href="https://endhomelessness.org/resource/many-western-and-southern-states-lack-sufficient-shelter-capacity-for-individual-homeless-adults/">already overrun shelters</a>. </p>
<p>Or it may lead people to accept <a href="https://www.latimes.com/california/story/2019-10-21/illegally-converted-building-conditions-nightmare-residents">poor housing conditions</a> with no electricity or water – at a time where hand-washing is deemed the <a href="https://www.cdc.gov/handwashing/when-how-handwashing.html">most effective preventive measure</a> against coronavirus. </p>
<h2>Creative but temporary solutions</h2>
<p>Local, state and federal officials have been scrambling for creative solutions to address these issues, but most of them are short-term.</p>
<p>States such as <a href="https://www.seattletimes.com/seattle-news/politics/inslee-orders-temporary-stop-to-evictions-other-help-for-workers-and-businesses-in-response-to-coronavirus/">Washington</a>, <a href="https://bismarcktribune.com/news/local/health/north-dakota-coronavirus-news-march-supreme-court-suspends-eviction-proceedings/article_930b2375-ebe0-53e1-8cb8-c0abc15d2eb3.html">North Dakota</a> and <a href="https://www.6sqft.com/coronavirus-stops-nyc-evictions/">New York</a> and cities like San Diego and Miami <a href="https://www.wsj.com/articles/coronavirus-outbreak-pushes-local-governments-to-freeze-home-evictions-11584892859">have ordered</a> temporary halts to evictions and, in some cases, <a href="https://www.hud.gov/press/press_releases_media_advisories/HUD_No_20_042">foreclosures</a>. The federal government <a href="https://www.npr.org/2020/03/19/818343720/homeowners-hurt-financially-by-the-coronavirus-may-get-a-mortgage-break">ordered lenders</a> to let homeowners suspend mortgage payments for up to 12 months. And dozens of cities <a href="https://www.theguardian.com/world/2020/mar/16/90-us-cities-and-states-suspend-water-shutoffs-to-tackle-coronavirus-pandemic">have suspended utility shutoffs</a> – and some have ordered houses that have already lost service to be <a href="https://www.michiganradio.org/post/detroit-unveils-water-restart-plan-because-coronavirus-threat">reconnected</a>. </p>
<p>While these interventions have reduced a source of anxiety and stress for households, they are temporary, ranging from a month to a year, or the duration of the crisis. Once they expire, these people will still have the same debts, same housing costs and the same bleak financial picture – and that’s only if the bailout packages support them. Millions of Americans <a href="https://www.theguardian.com/business/2020/mar/26/us-stimulus-bill-worker-relief">may not get the help</a> they need.</p>
<p>That’s why we believe longer-term strategies are needed, such as finding ways to end America’s widespread shortage of affordable housing, as well as focused short-term measures to <a href="https://www.hudexchange.info/programs/hprp">prevent homelessness</a> and <a href="https://www.benefits.gov/benefit/613">more cash assistance</a> to the neediest.</p>
<p>[<em>Get facts about coronavirus and the latest research.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=upper-coronavirus-facts">Sign up for our newsletter.</a>]</p><img src="https://counter.theconversation.com/content/134290/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Roshanak Mehdipanah receives funding from National Institute of Health, and Quicken Loans Community Fund. </span></em></p><p class="fine-print"><em><span>Gregory Sallabank does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Mass unemployment will make it a lot harder for tens of millions of Americans already struggling to pay for housing to keep their roof over their heads.Roshanak Mehdipanah, Assistant Professor in Public Health, University of MichiganGregory Sallabank, Clinical Research Project Manager, University of MichiganLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1231342019-09-30T11:24:05Z2019-09-30T11:24:05ZFor male students, technical education in high school boosts earnings after graduation<figure><img src="https://images.theconversation.com/files/294465/original/file-20190926-51405-11q406e.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Students in the electrical program at H.C. Wilcox Technical High School in Meriden, Connecticut practice their skills.</span> <span class="attribution"><span class="source">Connecticut Technical Education and Career System</span></span></figcaption></figure><p>Job prospects for young men who only have a high school diploma are particularly <a href="https://www.bls.gov/emp/chart-unemployment-earnings-education.htm">bleak</a>. They are even worse for those who have <a href="https://www.bls.gov/opub/mlr/2018/beyond-bls/mens-declining-labor-force-participation.htm">less education</a>. When young men experience joblessness, it not only threatens their financial well-being but their <a href="https://www.brookings.edu/blog/up-front/2019/02/12/why-are-out-of-work-men-so-unhappy-in-the-us/">overall well-being</a> and <a href="https://www.rwjf.org/en/library/research/2012/12/how-does-employment--or-unemployment--affect-health-.html">physical health</a>.</p>
<p>Could a high quality and specialized technical education in high school make a difference?</p>
<p>Based on a <a href="http://www.edworkingpapers.com/ai19-112">study</a> I co-authored with 60,000 students who applied to the Connecticut Technical High School System, the answer is: yes.</p>
<p>To reach this conclusion, we studied two groups of similar students: Those who barely were admitted to the Connecticut Technical High School System and those who just missed getting in. Students apply to these high schools and submit things such as test scores, attendance and discipline records from middle school. Then, applicants are ranked on their score and admitted in descending order until all seats are filled. We compared those whose score helped them get the last space in a school, to those who just missed being admitted because the school was out of space.</p>
<p>This enabled us to determine whether there was something special about Connecticut’s Technical High School System education that gave students an advantage over peers who also applied, but didn’t get into one of the system’s 16 technical schools across the state. </p>
<h2>Widespread appeal</h2>
<p>Connecticut Technical High School System is a popular choice for students - about 50% more students <a href="http://www.cttech.org/admissions.html">apply</a> than can be admitted.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/294464/original/file-20190926-51463-ipmcs5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/294464/original/file-20190926-51463-ipmcs5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/294464/original/file-20190926-51463-ipmcs5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/294464/original/file-20190926-51463-ipmcs5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/294464/original/file-20190926-51463-ipmcs5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/294464/original/file-20190926-51463-ipmcs5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/294464/original/file-20190926-51463-ipmcs5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/294464/original/file-20190926-51463-ipmcs5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Students in the Precision Machining program at Vinal Technical High School in Middletown, Conn., gather around their teacher for instruction.</span>
<span class="attribution"><span class="source">Connecticut Technical Education and Career System</span></span>
</figcaption>
</figure>
<p>The system functions such that students can apply to attend a school in the tech system instead of their assigned public school. Statewide, the system schools – which offer specialized instruction in a variety of career fields – serve about 10% of the high school students. Most students who don’t get into the tech schools stay in their public high school.</p>
<p>What we found is that students who were admitted to the Connecticut Technical High School System went on to earn 30% more than those who didn’t get admitted. We also found that the tech school students were 10 percentage points more likely to graduate from high school than applicants who didn’t get in – a statistically significant finding.</p>
<p>Our research suggests that expanding a technical high school system like the one in Connecticut would benefit more students. I make this observation as <a href="https://peabody.vanderbilt.edu/bio/shaun-dougherty">one who examines</a> outcomes associated with career and technical education.</p>
<h2>The track record</h2>
<p>Career and technical education has already been shown – at least on an individual or small scale level – to positively impact <a href="https://www.mdrc.org/publication/career-academies-long-term-impacts-work-education-and-transitions-adulthood">earnings</a> and <a href="https://www.sciencedirect.com/science/article/pii/S0272775718300876">high school graduation rates</a>. </p>
<p>Career and technical education does this without taking away from <a href="https://www.mitpressjournals.org/doi/10.1162/EDFP_a_00224">general learning</a> in traditional subjects like math and English. But based on my experience, it has never been clear as to whether career and technical education makes a difference on a system-wide level rather than at just one or among a few select schools.</p>
<p>Our recent study finally answers that question because we studied an entire state technical high school system. Specifically, it shows that, yes, career and technical education can give students the same benefits that it has already been shown to give on a smaller level even if it’s scaled up. This has implications for school districts and states, especially as <a href="https://thehill.com/opinion/education/429661-is-career-and-technical-education-more-than-another-fad">growing interest</a> in what works in career and technical education.</p>
<h2>The appeal of technical education in Connecticut</h2>
<p>Once admitted into the Connecticut technical high school system, all students take career and technical education coursework instead of other electives, such as world languages, art or music. Typically, coursework is grouped into one of 10 to 17 programs of study, such as information technology, health services, cosmetology, heating ventilation and air conditioning, and production processes, among others. Traditional public high schools in the state, on the other hand, tend to offer at most four career and technical programs through elective courses.</p>
<p>In the Technical High School System schools in Connecticut, students explore various programs of study during their first year. Then – with help from an adviser – students select a program of study. Within these programs, students take at least three aligned courses and often more. They also have more opportunity to align academic and technical coursework materials, so that math and English content can often be integrated into technical courses. Chances for work-based learning and job exposure can also be enhanced in these settings, which may contribute to their impact.</p>
<h2>Better outcomes</h2>
<p>To figure out if these technical schools were making a difference, we looked at admissions from 2006-2007 through 2013-2014 for 60,000 students.</p>
<p>We found that – compared to students who just missed being admitted – technical high school students <a href="http://www.edworkingpapers.com/ai19-112">had</a>:</p>
<p>• Better 9th grade attendance rates; absenteeism rates fell by 14%</p>
<p>• Higher 10th grade test scores (like moving from the 50th to the 57th percentile, which is a <a href="https://scholar.harvard.edu/files/mkraft/files/kraft_2019_effect_sizes.pdf">significant jump</a> for high school test scores)</p>
<p>• A greater likelihood of graduating from high school, about 85% versus 75% for those who just missed being admitted</p>
<p>• Higher quarterly earnings, over 30% higher</p>
<p>• While we found a lower likelihood of attending college initially, no differences were seen by age 23</p>
<p>As educators, elected officials and parents search for more effective ways to give young men in high school a better shot at being able to earn a living, our study suggests that Connecticut might have already figured it out.</p>
<p>[ <em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/123134/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Shaun M. Dougherty receives funding from the Institute of Education Sciences, U.S. Department of Education, through Grant R305A180511 to Vanderbilt University. The study team and project are part of the CTE Research Network, which seeks to expand the evidence base on the impact of CTE programs on student outcomes. The network is supported by the Institute of Education Sciences at the U.S. Department of Education with funds provided under the Carl D. Perkins Career and Technical Education Act through Grant R305N180005. The study was conducted in cooperation with the State of Connecticut Departments of Education and Labor through the P20Win Process.</span></em></p><p class="fine-print"><em><span>Stephen L Ross receives funding from receives funding from the Institute of Education Sciences, U.S. Department of Education, through Grant R305A180511 to Vanderbilt University. The study team and project are part of the CTE Research Network, which seeks to expand the evidence base on the impact of CTE programs on student outcomes. The network is supported by the Institute of Education Sciences at the U.S. Department of Education with funds provided under the Carl D. Perkins Career and Technical Education Act through Grant R305N180005. The study was conducted in cooperation with the State of Connecticut Departments of Education and Labor through the P20Win Process.</span></em></p>Students who get admitted to Connecticut’s career and technical education high schools are more likely to graduate and earn significantly more than peers who barely missed the cut.Shaun M. Dougherty, Associate Professor of Public Policy & Education, Vanderbilt UniversityStephen L Ross, ProfessorLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1188602019-06-24T10:16:26Z2019-06-24T10:16:26ZHow giving young people basic financial skills helps them find jobs<figure><img src="https://images.theconversation.com/files/280672/original/file-20190621-61775-kjdy00.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Giving young people financial skills can lead to much better education and job outcomes</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The picture in South Africa is a bleak one for the average 15 – 24 year old. Many have finished their schooling with a qualification of little value in the eyes of employers. And they lack the basic skills that employers now need. The result is that a staggering <a href="http://www.statssa.gov.za/?p=12121">39,6% (narrow definition) or 55,2%</a> (expanded definition which includes those who have stopped actively looking for work) are unemployed.</p>
<p>South Africa has grappled with high unemployment for many years and the private sector, civil society and government have invested heavily in interventions to address the problem. Youth Employability Programmes are one such example. These programmes aim to help young people make the transition from school to work more seamlessly via skills training.</p>
<p>They are part of a broad suite of programmes designed to drive growth and employment. But there seems to be a piece missing from existing schemes: giving young people basic financial skills. Other countries have found that giving young people these skills leads to much better education outcomes. For example, they’ve led to <a href="https://www.sciencedirect.com/science/article/abs/pii/S0272775712001409">better secondary schooling outcomes</a> in Ghana. And in Uganda they have been shown to <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2976060/">increase financial security</a> in vulnerable households. In the US they have helped <a href="https://www.sciencedirect.com/science/article/abs/pii/S0272775712001355">promote transitions to college in poor communities</a>.</p>
<p>We <a href="https://www.uj.ac.za/faculties/humanities/csda/Documents/Siyakha%20Report%20June%202019%20Web%20LowRes.pdf">did a study</a> to find out whether including financial skills in existing programmes could help more young people find and keep work.</p>
<p>The answer is yes. We found that providing young people with financial capabilities does improve the picture. Those who got the training were nine percentage points more likely to be employed than those who did not two years after completing the training.</p>
<h2>Tracking over six years</h2>
<p>The study, launched in 2013, tracked 1974 people who participated in one of eight Youth Employability Programmes at 44 sites across the country. Half of the training sites were randomly assigned to receive a short savings and basic financial management training module and access to a no-cost bank account.</p>
<p>We followed these two groups of young people as they entered the programmes and up to two years after completing their training to understand whether financial capability training should be a complementary intervention offered to young people.</p>
<p>The study participants were predominantly African (94,4%), women and from poor backgrounds, with an average per capita income of R527. This places them below the upper-bound poverty line. Most participants had experienced food insecurity in the year prior to joining the programme.</p>
<p>The majority of participants had a matric certificate – the equivalent of 12 years of schooling – and over half had some prior work experience, primarily short-term contract work, while a few had self-employment experience. Just under a third had started a post-secondary qualification. Despite this the vast majority were unemployed at the start of the study and 78% had been chronically unemployed (unemployed for longer than one year).</p>
<h2>What we found</h2>
<p>We tracked and interviewed the study participants before, during and after their training. During a period corresponding to between 12 and 24 months after their training, young people who received the financial capability training were nine percentage points more likely to be employed than those who did not receive the intervention. </p>
<p>Importantly, the financial capability intervention also had positive effects for young people who remained unemployed. They were more likely to persist with work seeking than those who did not.</p>
<p>Interestingly, young people who received the training did not differ in their reported savings behaviour from those in the control group. From this we can see that the effect of the intervention is likely due to the financial literacy training, and not the savings account.</p>
<h2>What next?</h2>
<p>We cannot definitively say why young people who received the financial literacy training showed better employment outcomes. One hypothesis is that improved financial literacy helps young people manage what little money they have better and this in turn helps them manage the <a href="https://theconversation.com/a-south-african-case-study-how-to-support-young-job-hunters-110511">high cost of work-seeking</a>, especially in low-income households. </p>
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Read more:
<a href="https://theconversation.com/south-africas-youth-speak-out-on-the-high-cost-of-finding-work-61024">South Africa's youth speak out on the high cost of finding work</a>
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<p>Another possibility is that the financial literacy training promotes belief in oneself, which in turn facilitates improved job search. It certainly appeared to be the case that those who received the treatment did have slightly higher levels of self-esteem after the intervention than those who did not receive the intervention.</p>
<p>The possibility of growth in self esteem supports other research which shows that improved financial literacy is associated with a greater sense of <a href="https://journals.sagepub.com/doi/abs/10.1111/j.1467-9280.2009.02309.x?journalCode=pssa">future orientation</a>, <a href="https://www.sciencedirect.com/science/article/pii/S019074091100291X">increased motivation</a> and the <a href="https://openscholarship.wustl.edu/cgi/viewcontent.cgi?article=1319&context=csd_research">desire to achieve their own goals</a>.</p>
<p>The outcomes from the study are compelling. Although it’s unclear exactly how financial literacy training works, this kind of programme does seem promising as a complementary intervention to existing programmes for young people.</p><img src="https://counter.theconversation.com/content/118860/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Leila Patel receives funding from the Department of Science and Technology (DST) and the National Research Foundation (NRF) for the South African Research Chair in Welfare and Social Development. She also received funding from the Ford Foundation and from the National Treasury's Jobs Fund through the Government Technical Advisory Centre and the National Youth Development Agency. </span></em></p><p class="fine-print"><em><span>The study was funded by the Ford Foundation, the Government Technical Advisory Centre, the National Youth Development Agency, the University of Johannesburg's Research Committee and the DST/NRF South African Research Chair in Welfare and Social Development. Lauren Graham also receives funding from the National Research Foundation. She is a member of the Human Development and Capabilities Association and the International Consortium for Social Development. </span></em></p><p class="fine-print"><em><span>The study was funded by the Ford Foundation, the Government Technical Advisory Centre, the National Youth Development Agency, the University of Johannesburg's Research Committee and the DST/NRF South African Research Chair in Welfare and Social Development.</span></em></p>Arming young people with financial capabilities does improve their employment prospects, but how exactly is still not clear. One possibility is that financial literacy boosts their confidenceLeila Patel, Professor of Social Development Studies, University of JohannesburgLauren Graham, Associate professor at the Centre for Social Development in Africa, University of Johannesburg, University of JohannesburgZoheb Khan, Researcher, University of JohannesburgLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1086542019-03-21T10:45:22Z2019-03-21T10:45:22ZNiger has the world’s highest birth rate – and that may be a recipe for unrest<p>While fertility levels have declined rapidly in most parts of the world, many countries in the sub-Saharan African region of the Sahel have seen their reproductive rates go down very slowly, and only very slightly.</p>
<p>The average woman in <a href="https://www.sahistory.org.za/dated-event/nigers-independence-day">Niger</a>, for example, still has 7.2 children, according to the <a href="http://www.prb.org">Population Reference Bureau 2018 World Population Data Sheet</a>. The average in developing countries is 2.6 children per woman. </p>
<p>With an annual growth rate of 3.8 percent, <a href="http://www.prb.org">the world’s highest</a>, Niger could see its population of 22.2 million nearly triple, to 63.1 million, by 2050. Half of all Nigeriens are under the age of 15 – a higher proportion than any other country. </p>
<p>Neighboring <a href="https://www.indexmundi.com/nigeria/birth_rate.html">Nigeria</a> and <a href="https://www.indexmundi.com/mali/birth_rate.html">Mali</a> have a youthful age structure <a href="http://www.prb.org">similar to Niger’s</a>.</p>
<p>As a demographer, I am concerned by the situation in the Sahel region. I have <a href="https://www.springer.com/us/book/9783319468877">studied sub-Saharan Africa’s population growth</a> for decades, both <a href="https://www.researchgate.net/profile/John_May80">at the World Bank and as an academic</a>, and I have learned that a surplus of young people can predict social unrest.</p>
<h2>Security demographics</h2>
<p>In theory, a young population should <a href="https://theconversation.com/tanzanian-president-bluntly-attacks-contraception-saying-high-birth-rates-are-good-for-economy-103513">drive economic growth</a>.</p>
<p>It can be a competitive advantage against Western countries that – like the United States, United Kingdom, France and Italy – have rapidly aging populations. Only 19 percent of the U.S. population <a href="http://www.prb.org">is under 15</a>.</p>
<p>But poor countries like those in Africa’s <a href="https://theconversation.com/sahel-region-africa-72569">Sahel region</a> are struggling to provide many young people with education, health care and, critically, jobs. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/264945/original/file-20190320-93057-4rlweo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/264945/original/file-20190320-93057-4rlweo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/264945/original/file-20190320-93057-4rlweo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=417&fit=crop&dpr=1 600w, https://images.theconversation.com/files/264945/original/file-20190320-93057-4rlweo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=417&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/264945/original/file-20190320-93057-4rlweo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=417&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/264945/original/file-20190320-93057-4rlweo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=524&fit=crop&dpr=1 754w, https://images.theconversation.com/files/264945/original/file-20190320-93057-4rlweo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=524&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/264945/original/file-20190320-93057-4rlweo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=524&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The Sahel, a sub-Saharan region of Africa.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Saharan_Africa_regions_map.png">Peter Fitzgerald/Wikimedia</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
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<p>Niger is a peaceful and politically stable nation. Yet, despite <a href="https://data.worldbank.org/country/niger">robust economic growth since 2000</a>, it remains very poor. Just under half of Niger’s booming population earns less than US$1.90 a day, and <a href="http://hdr.undp.org/en/countries/profiles/NER">unemployment is very high</a>.</p>
<p>Incomes in oil producer Nigeria are significantly higher – about <a href="http://www.prb.org">$5,700 per person</a>. But wealth is unevenly distributed, and about half of Nigeria’s population lives on less than $1.90 a day. </p>
<p>The countries of the Sahel are mostly rural. But, with so many young people, there are not enough agricultural jobs to go around. Many rural youth end up moving to cities looking for work – and find unemployment, instead. </p>
<p><a href="https://apps.dtic.mil/dtic/tr/fulltext/u2/a422694.pdf">Studies</a> conducted in a number of Middle Eastern countries suggest that a very young age structure coupled with a lack of economic opportunity can be an explosive combination.</p>
<p>That’s why a surging population is a red flag for scholars of a new field called “<a href="https://www.wilsoncenter.org/sites/default/files/ecspr10_C-cincotta.pdf">demographic security</a>.” Baby booms can increase a country’s risk of civil unrest, conflict – and, in extreme cases, these booms can even foment extremism.</p>
<p>The risk of youthful revolt is highest when elected leaders are unresponsive – even <a href="https://theconversation.com/the-key-to-real-change-in-the-middle-east-police-reform-38749">repressive</a> or predatory – in the face of a frustrated and struggling population. Those were the ingredients for the <a href="https://www.newyorker.com/magazine/2016/03/28/tunisia-and-the-fall-after-the-arab-spring">2010 revolt in Tunisia</a> that sparked the first Arab Spring uprising.</p>
<p>In the most extreme cases, <a href="https://theconversation.com/how-radicalization-happens-and-who-is-at-risk-52248">terrorism can take root</a> after conflict erupts. </p>
<p>Discontent makes people more <a href="https://theconversation.com/islamic-state-using-new-media-older-blueprint-to-fight-the-west-from-within-43220">susceptible to extremist ideologies</a>, while poverty helps terrorist groups enlist new recruits often by offering small monetary incentives. Political upheaval makes it easier for terrorist groups to infiltrate a country’s borders.</p>
<p>According to Serge Michailof in his book “<a href="https://global.oup.com/academic/product/africanistan-9780199485666?cc=us&lang=en&">Africanistan: Development or Jihad</a>,” this is effectively how the Taliban took over Afghanistan after a Soviet occupation in the 1980s left the country <a href="https://www.aljazeera.com/news/asia/2009/03/2009389217640837.html">leaderless and divided</a>.</p>
<h2>Danger in the Sahel</h2>
<p>Now, I fear the same thing is happening in the Sahel.</p>
<p>A decade ago, this region of <a href="https://global.oup.com/academic/product/africanistan-9780199485666?cc=us&lang=en&">West Africa was a generally stable place</a>. Nigeria, Mali and Niger all had <a href="https://www.publicaffairsbooks.com/titles/martin-meredith/the-fate-of-africa/9781610391320/">secure borders, no civil conflict to speak of and absolutely no terrorism</a>.</p>
<p>Today, <a href="https://theconversation.com/boko-harams-six-years-of-terror-have-revealed-the-depth-of-nigerias-troubles-36164">Nigeria</a> and <a href="https://theconversation.com/explainer-what-is-going-on-in-mali-51066">Mali</a> are rife with <a href="https://theconversation.com/will-terrorism-continue-to-decline-in-2019-104466">terrorist threats</a>. </p>
<p><a href="https://theconversation.com/countering-boko-haram-can-a-regional-approach-help-nigeria-36910">Boko Haram</a>, which was founded in Nigeria in 2002 to “purify Islam in northern Nigeria,” has killed hundreds, perhaps thousands, of soldiers and civilians across the Sahel, abducted schoolgirls and executed <a href="https://www.cnn.com/2017/08/10/africa/boko-haram-women-children-suicide-bombers/index.html">lethal suicide attacks</a> using <a href="https://www.nytimes.com/interactive/2017/10/25/world/africa/nigeria-boko-haram-suicide-bomb.html">women and children as human bombs</a>.</p>
<p>As al-Qaida loses ground in the Middle East, it, too, has began to spread into Africa. The terrorist organization has an estimated several thousand fighters in North Africa and the Sahel, who have sometimes joined forces with Boko Haram. </p>
<p><a href="https://theconversation.com/boko-haram-will-talk-up-links-to-islamic-state-but-joint-activity-is-unlikely-38549">Islamic State affiliates are also operating in West Africa</a>. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/264934/original/file-20190320-93024-10543tg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/264934/original/file-20190320-93024-10543tg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/264934/original/file-20190320-93024-10543tg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/264934/original/file-20190320-93024-10543tg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/264934/original/file-20190320-93024-10543tg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/264934/original/file-20190320-93024-10543tg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/264934/original/file-20190320-93024-10543tg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/264934/original/file-20190320-93024-10543tg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Nigerien Interior Minister Mohamed Bazoum at a refugee camp in Diffa, Niger, in 2016 following attacks by Boko Haram.</span>
<span class="attribution"><a class="source" href="https://pictures.reuters.com/CS.aspx?VP3=SearchResult&VBID=2C0FCIH57TC75&SMLS=1&RW=1536&RH=674#/SearchResult&VBID=2C0FCIH57TC75&SMLS=1&RW=1536&RH=674&POPUPPN=16&POPUPIID=2C0BF1FY6FSYZ">Reuters/Luc Gnago</a></span>
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<p>Some of these groups have now penetrated once-peaceful Niger, infiltrating its borders from neighboring Nigeria and Mali. Refugees from those countries fleeing Boko Haram have also settled in refugee camps on Niger’s borders.</p>
<p>Niger faces an “<a href="https://www.voanews.com/a/official-niger-is-facing-an-existential-threat-from-militants-/4490620.html">existential threat</a>” from militants, according to Minister of Defense Kalla Mountari, who spoke with Voice of America in late 2018. </p>
<p>The U.S. military has <a href="https://www.cnn.com/2018/05/10/politics/niger-american-troops-presence/index.html">800 troops stationed in Niger</a> , where they <a href="https://www.nytimes.com/2018/09/02/world/africa/pentagon-commandos-niger.html">provide counterterrorism training</a> to local troops. It is the second-largest U.S. military deployment in sub-Saharan Africa, after Djibouti.</p>
<h2>Challenges ahead</h2>
<p>A youth bulge in a developing country with high unemployment does not automatically lead to terrorism. </p>
<p>Togo and Tanzania, for example, are low-income countries with <a href="http://worldpopulationreview.com/countries/total-fertility-rate/">high birth rates</a> but relatively low levels of conflict. </p>
<p>What makes Niger and Mali different, in my assessment, is that their populations are growing much faster – faster than virtually anywhere else on Earth. The challenges their governments face in providing for their people are thus much more acute. They are also located next to the vast expanse of the Sahara desert, where terrorist groups <a href="https://www.state.gov/j/ct/rls/crt/2017/282841.htm">transport weapons and operate almost freely</a>, according to the U.S. State Department.</p>
<p>In Nigeria’s case, extreme inequality, widespread poverty and poor governance compound the problem of youthful discontent, allowing terrorists to set up shop.</p>
<p>Gen. Michael V. Hayden, CIA director under President George W. Bush, foresaw today’s outbreak of terrorism in the Sahel. </p>
<p>In a 2008 speech delivered at Kansas State University, Hayden cited rapid population growth in “countries least able to sustain it” – specifically Niger, Nigeria and Yemen – as an urgent global concern.</p>
<p>In my experience, however, few leaders in the Sahel are prepared to grapple with the <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/j.1728-4457.2016.00165.x">political difficulties of reining in population growth</a>. </p>
<p>Most sub-Saharan African countries do have family planning policies aimed at curbing fertility. But triggering a rapid and significant fertility decline is a daunting task. Attitudes about family size and birth control are deeply ingrained, less than 30 percent of women of reproductive age use a modern contraceptive method and <a href="https://www.guttmacher.org/fact-sheet/abortion-africa">abortion access is extremely limited</a>.</p>
<p>Creating real educational and employment opportunities for young people is an equally daunting challenge. </p>
<p>Unless more is done to promote family planning and boost economic prospects in the Sahel’s fastest-growing countries, I fear terrorism is the likely result.</p>
<p><em>Editor’s note: The caption of the map in this story has been corrected to accurately describe the geography of the Sahel.</em></p><img src="https://counter.theconversation.com/content/108654/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John F. May does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Research shows that unrest, even terrorism, can erupt in poor countries with a surplus of young people and not enough jobs. Can Niger, a once-peaceful sub-Saharan African nation, handle its baby boom?John F. May, Adjunct Professor, Georgetown University School of Nursing and Health Studies, Georgetown UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1045182018-10-08T10:33:16Z2018-10-08T10:33:16ZAmazon and other ‘superstar’ companies could give all American workers a raise<figure><img src="https://images.theconversation.com/files/239621/original/file-20181008-72113-1m2dlsa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">An Amazon employee applies tape to a package before shipment.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Amazon-Wages-Backlash/9f9364c105ca46599accf26a9cb125fd/12/0">AP Photo/Patrick Semansky</a></span></figcaption></figure><p>The <a href="https://www.bls.gov">latest employment data</a>, released on Oct. 5, point to a persistent economic puzzle: The unemployment rate is the lowest in nearly half a century yet wages have been very slow to react. </p>
<p>In the past, such low unemployment levels <a href="https://research.stlouisfed.org/publications/economic-synopses/2015/06/19/the-relationship-between-labor-market-conditions-and-wage-growth/">have driven up</a> wages. Yet, apart from a relatively <a href="https://www.frbatlanta.org/chcs/wage-growth-tracker.aspx">recent acceleration</a>, real wages have barely budged since the Great Recession and in fact are <a href="http://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/">little changed</a> from the 1980s. </p>
<p>This puzzle can be even more confounding when you consider some of the biggest American companies have been boosting the minimum wages they pay their employees to levels way above the federal minimum of US$7.25 an hour. Amazon became the latest this month, <a href="https://www.cnbc.com/2018/10/02/amazon-raises-minimum-wage-to-15-for-all-us-employees.html">promising</a> to pay all workers no less than $15 an hour, following similar raises for employees of <a href="https://www.businessinsider.com/costco-raises-its-minimum-wage-2018-6">Costco</a>, <a href="https://www.forbes.com/sites/laurengensler/2018/01/11/walmart-raises-minimum-wage-after-tax-reform/">Walmart</a>, <a href="https://money.cnn.com/2017/09/25/news/companies/target-minimum-wage/index.html">Target</a> and others. </p>
<p>I believe there’s good reason to be skeptical that these sporadic pay hikes will solve the problem of stagnant wages. In fact, it is the rise of such superstar companies as Amazon that has contributed to the problem in the first place. </p>
<h2>Stagnant wages</h2>
<p>Wages typically <a href="https://fredblog.stlouisfed.org/2018/08/has-wage-growth-been-slower-than-normal-in-the-current-business-cycle/">need to rise</a> 3.5 to 4 percent a year following an economic recession in order to help workers recoup their losses from the downturn. </p>
<p>But <a href="https://www.epi.org/nominal-wage-tracker/#chart3">average hourly earnings growth</a> for private sector nonfarm workers has been significantly below that, and most of the gains <a href="https://www.washingtonpost.com/business/2018/08/10/america-wage-growth-is-getting-wiped-out-entirely-by-inflation/?utm_term=.f89306b2666a">have been wiped out</a> by inflation. </p>
<p>As a result, workers are getting an <a href="https://www.philadelphiafed.org/-/media/research-and-data/publications/business-review/2015/q3/brq315_a_bit_of_a_miracle_no_more.pdf">ever-shrinking share</a> of U.S. national income, which declined from about 65 percent in the 1960s to as low as 56 percent in 2014. </p>
<p>Everything from <a href="https://www.huffingtonpost.ca/2017/06/18/wage-growth-automation_n_17195292.html">robots</a> and <a href="https://www.nytimes.com/interactive/2018/02/01/business/economy/wages-salaries-job-market.html">global competition</a> to the erosion of unions has been blamed. While there’s certainly truth to each explanation, a new one has been gaining traction: superstar companies.</p>
<h2>Superstars rise</h2>
<p>Amazon, Google, Uber, Federal Express and a few other exceptional companies have gobbled up an increasing share of their industry’s markets to a point where small companies just can’t compete. </p>
<p><a href="http://www.nber.org/papers/w23108.pdf">In retail</a>, for example, the top four companies <a href="https://www.nytimes.com/2017/03/08/business/economy/labor-share-economic-output.html">controlled</a> 30 percent of sales in 2012, up from 15 percent in 1982. In finance, the share rose to 35 percent from 24 percent. And in the service sector, it climbed to 15 percent from about 10 percent. </p>
<p>The industry concentration, along with inexpensive <a href="https://fred.stlouisfed.org/series/NCBDBIA027N">loans</a> engineered by the Federal Reserve’s ultra-low interest rate policy, has allowed a select few companies to make <a href="https://hbr.org/2015/08/productivity-is-soaring-at-top-firms-and-sluggish-everywhere-else">significant investments in productive</a> technologies, such as in artificial intelligence and automation. This has <a href="https://www.competitionpolicyinternational.com/wp-content/uploads/2018/06/CPI-Bessen.pdf">helped them increase</a> their market shares even further. And in turn, this is what is making it easier for <a href="http://workforcereport.adp.com">these companies</a> to lift wages, whether by setting higher minimum wage floors for their workers or simply paying more across the board. </p>
<p>While that’s all fine and good, the problem is that <a href="https://www.bls.gov/web/cewbd/table_f.txt">more than half</a> of American workers in the private sector are employed by companies with fewer than 500 employees. These small businesses have suffered as a result of the superstars’ growing dominance and also can’t take advantage of the record-low borrowing costs because they do not have access to the stock and bond markets.</p>
<p>Because small- and mid-size employers do most of the hiring in the U.S., it is their wages that dominate the industry standards. And they are having a hard time increasing pay for their workers.</p>
<p>The rise of superstar companies is also what is driving <a href="https://money.cnn.com/2017/09/27/news/economy/inequality-record-top-1-percent-wealth/index.html">widening income inequality</a> today. While we usually think about inequality in terms of the gap between higher and low earners, <a href="https://www.competitionpolicyinternational.com/wp-content/uploads/2018/06/CPI-Bessen.pdf">researchers</a> have found that the bigger issue is the gap between rich and poor companies, which in turn reinforces the gap in pay between individuals. </p>
<p>It is a good thing that the likes of Amazon are setting a much higher floor under their workers’ wages, but the slimmer profit margins at their smaller rivals make it virtually impossible for them to do the same. This will cement the superstars’ market power even further.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/239626/original/file-20181008-72110-16mvtet.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/239626/original/file-20181008-72110-16mvtet.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=420&fit=crop&dpr=1 600w, https://images.theconversation.com/files/239626/original/file-20181008-72110-16mvtet.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=420&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/239626/original/file-20181008-72110-16mvtet.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=420&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/239626/original/file-20181008-72110-16mvtet.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=528&fit=crop&dpr=1 754w, https://images.theconversation.com/files/239626/original/file-20181008-72110-16mvtet.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=528&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/239626/original/file-20181008-72110-16mvtet.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=528&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Superstar companies like Google have been able to make significant investments in productive technologies like AI.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Google-Showcase/2ca870adbfc144dfbdafc5ea56c36593/1/0">AP Photo/Jeff Chiu</a></span>
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</figure>
<h2>An incentive to act</h2>
<p>Fortunately, superstar companies have an incentive to do something about this because a situation in which wage growth is below par is bad for business as well as for the workers.</p>
<p>That’s because low wages <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3128441/">threaten</a> the physical and mental health of a large swath of the workforce as increasing numbers of workers can’t afford to invest in good food, preventative health care, continuing education and skills training. And in a vibrant economy, workers must stay healthy and <a href="https://www.mckinsey.com/industries/social-sector/our-insights/the-economic-cost-of-the-us-education-gap">educated</a> to remain productive. Besides, low wages also reduce consumption and economic growth. </p>
<p>As such, stagnant wages are one of the main reasons overall <a href="https://www.businessinsider.com/wage-growth-america-slow-explanation-2018-9">U.S. productivity growth</a> has also been sluggish in recent years and declining toward zero. This is very bad for the U.S. economy and companies, both large and small, since high rates of productivity <a href="https://opentextbc.ca/principlesofeconomics/chapter/20-2-labor-productivity-and-economic-growth/">are vital</a> to a country’s long-term growth rates – and to higher wages as well.</p>
<p>The solution is in thinking about worker productivity as a collective resource. Companies certainly have an incentive to keep labor costs low, but they also have a strong incentive to ensure, collectively, that worker productivity grows over time. </p>
<p>The trickier part is getting a bunch of hotshot companies to act in concert to solve a problem they all suffer from. It’s basically a “<a href="https://www.investopedia.com/terms/t/tragedy-of-the-commons.asp">tragedy of the commons</a>” scenario in which a shared resource is spoiled because participants’ self-interest causes them to behave against the common good. </p>
<p>But political economist <a href="https://www.cambridge.org/us/academic/subjects/politics-international-relations/political-theory/governing-commons-evolution-institutions-collective-action-1?format=PB&isbn=9781107569782">Elinor Ostrom has shown</a> – in research that <a href="https://www.nobelprize.org/prizes/economics/2009/ostrom/facts/">won her a Nobel</a> – that organizations, communities and other stakeholders have frequently found ways to govern the “commons” without tragedy.</p>
<p><a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3262295">My own soon-to-be-published research</a> is on how groups of companies can organize themselves to preserve shared resources. The <a href="https://www.fsb-tcfd.org/">Taskforce on Climate-Related Financial Disclosures</a>, for example, is collaborating with some companies like Unilever and JPMorgan Chase to engage in collective action on climate change. </p>
<p>So while I applaud that Amazon and others are lifting their own employees’ pay, the problem they’re trying to solve will remain until the majority of the workforce gets a raise too.</p><img src="https://counter.theconversation.com/content/104518/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Carolin Schellhorn does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The rise of superstar companies that dominate their industries may be partly to blame for the lack of wage growth in the US in recent years. It could also suggest a solution.Carolin Schellhorn, Assistant Professor of Finance, St. Joseph's UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/959082018-05-04T14:11:26Z2018-05-04T14:11:26ZWhat is full employment? An economist explains the latest jobs data<figure><img src="https://images.theconversation.com/files/217610/original/file-20180503-153878-14bfk05.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Jobs a-plenty.</span> <span class="attribution"><span class="source">AP Photo/Danny Johnston</span></span></figcaption></figure><p>The latest jobs report has gotten a lot of <a href="https://www.washingtonpost.com/business/why-even-a-39percent-unemployment-rate-might-not-be-full-quicktake/2018/05/04/8e2c1ea4-4f99-11e8-85c1-9326c4511033_story.html?noredirect=on">analysts</a>, policymakers and talking heads once again asking whether the U.S. is at full employment. </p>
<p>The Bureau of Labor Statistics reported on May 4 that the <a href="https://www.bls.gov/news.release/pdf/empsit.pdf">U.S. unemployment rate</a> fell to 3.9 percent, which is the <a href="https://data.bls.gov/timeseries/LNS14000000">lowest level</a> since December 2000. The unemployment rate includes anyone 16 or older who is actively searching for work in its calculation, which means students, retirees and others not in the labor force are excluded.</p>
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<p>Does this mean the economy is at full employment? What is full employment anyway? </p>
<p>To the typical person on Main Street, the idea of full employment usually means everyone in the country is working, which would imply a jobless rate of essentially zero. This has never happened. The lowest unemployment rate the U.S. ever achieved was <a href="http://www2.census.gov/library/publications/1975/compendia/hist_stats_colonial-1970/hist_stats_colonial-1970p1-chD.pdf">1.2 percent in 1944</a>. That was during the middle of World War II, when millions of men were drafted to fight and their jobs were filled by women. </p>
<p>This popular concept sounds nice, but, to economists like me, it misses the mark. Even in a fully employed, robust economy, there will always be a certain number of people who have given up looking for work, who are between jobs or whose skills are temporarily not needed.</p>
<p>Essentially, the idea of full employment is that so few workers are available that companies need to begin raising wages to attract help.</p>
<p>Economists technically define full employment as any time a country has a jobless rate equal or below what is known as the “<a href="https://fred.stlouisfed.org/series/NROUST">non-accelerating inflation rate of unemployment</a>,” which goes by the soporific acronym <a href="https://www.vox.com/2014/11/14/7027823/nairu-natural-rate-unemployment">NAIRU</a>. </p>
<p>Estimates of the measure are based on the historical relationship between the unemployment rate and changes in the pace of inflation. If the unemployment rate is below this number, the economy is at full employment, businesses cannot easily find workers, and inflation and wages typically rise. If not, then there are too many workers in need of a job, and inflation remains low.</p>
<p>At the moment, the <a href="https://www.cbo.gov/sites/default/files/recurringdata/51135-2018-04-economicprojections_1.xlsx">Congressional Budget Office puts NAIRU</a> at 4.6 percent, a little above the 3.9 percent unemployment rate. That means the U.S. is at full employment – and that wages should be going up. But until recently, <a href="https://www.epi.org/nominal-wage-tracker/">they haven’t gained much</a>, which <a href="https://hbr.org/2017/10/why-wages-arent-growing-in-america">has puzzled</a> many economists. </p>
<p>Besides the impact on wages, another reason it’s useful to understand the definition of full employment is because maintaining it is one of the <a href="https://www.federalreserve.gov/faqs/money_12848.htm">Federal Reserve’s key mandates</a> when setting interest rates. The central bank tends to lower rates when unemployment is relatively high and raise them when it believes the economy is at full employment and wages are beginning to go up.</p>
<p>In other words, full employment isn’t when everyone has a job. Instead, it is when <a href="http://businessmacroeconomics.com/">inflation</a> starts to rise because businesses cannot find enough workers. </p>
<p>While the U.S. may be technically at full employment, according to the definition, I won’t be convinced until paychecks start increasing.</p><img src="https://counter.theconversation.com/content/95908/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jay L. Zagorsky does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The unemployment rate is now at its lowest level in 17 years and is very close to a 50-year low. Does that mean we’re at full employment?Jay L. Zagorsky, Economist and Research Scientist, The Ohio State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/945842018-04-13T02:20:29Z2018-04-13T02:20:29ZHow to help athletes adapt to life after sport<p>Several leading Australian athletes have announced their retirement following the Commonwealth Games, including Kookaburras captain <a href="https://www.qasport.qld.gov.au/media-publications/news/2018-02-23-mark-knowles-retirement.html">Mark Knowles</a> and pistol shooter <a href="https://www.gc2018.com/article/australian-shooting-legend-looks-retire-after-games">Bruce Quick</a>. These are the lucky ones who are able to choose their own time to leave what has been a dominant part of their life. </p>
<p>Many athletes <a href="https://www.huffingtonpost.com.au/2017/04/11/former-elite-athletes-reveal-mental-health-struggles-after-retir_a_22035114/">struggle</a> with joblessness, depression or a <a href="http://www.abc.net.au/news/2017-05-01/former-athletes-on-depression-joblessness-after-elite-sport/8482282">lack of purpose</a> as they enter retirement. The key is to help athletes develop into well-rounded people, so that their identities do not rest entirely on their sporting prowess. </p>
<p>The issue is not a new one, of course. <a href="https://www.theguardian.com/football/2005/nov/25/sport.obituaries2">George Best</a>, the great Irish footballer, provides just one example of a star who found himself adrift when his football genius was taken away. This <a href="http://www.dailymail.co.uk/news/article-2994111/George-Best-s-decline-exposed-new-book-son-Calum.html">led</a> to a sad decline and a premature death.</p>
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Read more:
<a href="https://theconversation.com/former-olympic-athletes-can-battle-anxiety-depression-8140">Former Olympic athletes can battle anxiety, depression</a>
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<p>For most athletes, sports success occurs at a time in life when they are just developing a sense of their personal identity. </p>
<p>But to emerge as an adult with a strong sense of personal identity and confidence usually <a href="https://www.learning-theories.com/eriksons-stages-of-development.html">requires</a> opportunities to explore different sides of our personalities. However, an unremitting program of training and competition demands an athlete’s total commitment. </p>
<p>In the case of the young athlete, their early success and lack of opportunity to explore alternative dimensions of themselves can result in what has been called “<a href="http://psycnet.apa.org/record/1994-03969-001">identity foreclosure</a>”. This is the act of committing to an identity prematurely, without exploration or choice. </p>
<p>The result can be that athletes rely excessively on their identities as sportspeople. When this is later taken away, they suffer an extraordinary sense of loss and difficulty finding satisfactory meaning in their life and sense of worth.</p>
<p>Following her retirement, swimming great Libby Trickett talked about her <a href="https://www.huffingtonpost.com.au/2017/04/11/former-elite-athletes-reveal-mental-health-struggles-after-retir_a_22035114/">struggles with depression</a>:</p>
<blockquote>
<p>When you are training 35 hours a week you can eat a lot. When you’re not training 35 hours a week, I could eat like I was training at that Olympic level. I put on a lot of weight, had no routine, stopped all forms of exercise. </p>
<p>I stopped wanting to catch up with friends and family. What do you talk about now, you know?</p>
<p>I had nothing outside of swimming, really. You know, I tried to create something outside of swimming, so I was doing university, but it wasn’t necessarily a passion.</p>
</blockquote>
<h2>Meeting the challenge</h2>
<p>An athlete like Mark Knowles should be well equipped for a successful transition into retirement. <a href="https://www.theaustralian.com.au/life/weekend-australian-magazine/qa-mark-knowles-australian-mens-hockey-captain-34/news-story/f28b916e5db56c59c9803076f420f752">He has</a> the roles of husband and father to continue with, a position in his state academy of sport and a sport-related business to develop. </p>
<p>In other words, Knowles has been able to develop and maintain identities alongside his identity as an elite athlete. </p>
<p>But there are other athletes who have not had the resources to support this sort of concurrent personal development,or whose training, competition and other sport-related demands have squeezed out opportunities for interactions with family, age peers outside their sport, study and leisure time. </p>
<p>A number of the programs that seek to assist athletes make the transition into a post-athletic life, such as the International Olympic Committee <a href="https://www.olympic.org/athlete-career-programme">Athlete Career Education Program</a>, concentrate on directing retiring athletes towards education, finding a new career and developing life skills. </p>
<p>While such programs are very helpful and have been developed with great expertise, they are essentially remedial in nature. They aim to redress deficits in the individual that should not have occurred. </p>
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Read more:
<a href="https://theconversation.com/how-athletes-such-as-eamon-sullivan-cope-with-retirement-29339">How athletes such as Eamon Sullivan cope with retirement</a>
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<p>The aim at every stage in the athletic career should be to focus on the development of the whole person rather than just the athletic person. </p>
<p>Recently, the world of athletics mourned the passing of the first man to break the four-minute-mile barrier, <a href="https://www.theguardian.com/sport/2018/mar/04/sir-roger-bannister-obituary">Sir Roger Bannister</a>. This watershed was achieved while Bannister was pursuing postgraduate medical studies at Oxford. </p>
<p>He went on to a distinguished career as a neurosurgeon and was later appointed master of Pembroke College. In addition, he found time to contribute as a sports administrator, becoming the first chairman of the British Sports Council in 1972.</p>
<p>While such levels of achievement in disparate fields will always be exceptional, the dangers of allowing a sense of personal identity and self-worth to be dependent on any one single domain are self-evident. </p>
<h2>Well-rounded athletes</h2>
<p>The responsibility for athlete development lies ultimately with the sports themselves and the institutions that work with them. Some sports have developed infrastructures to support holistic development. </p>
<p>The AFL Players’ Association, for example, has responded to its own research findings by implementing its <a href="http://www.aflplayers.com.au/article/what-is-max360/">Max360 program</a>. This explicitly aims to help players with their holistic development away from the footy field. Its stated focus is on the players’ current engagement and development off the field, as opposed to a “preparing for life after football” narrative.</p>
<p>Forty-one universities across Australia have combined with the Australian Sports Commission, the state institutes of sport and the national governing bodies of sport to form the <a href="https://www.ausport.gov.au/ais/personal_excellence/university_network/elite_athlete_friendly_university_program">Elite Athlete Friendly Universities network</a>. The program serves to encourage and help athletes to remain in contact with their academic studies and development.
More flexible arrangements are available to athletes, which enables them to reconcile many of the conflicts between their sporting and academic programs. </p>
<p>In the world at large, the nature of jobs and careers is <a href="https://research-methodology.net/changing-nature-of-work-in-the-21st-century/">changing</a> from that of predictable career pathways to looking more like a sequence of often loosely connected “gigs”. </p>
<p>In the future many individuals, not just sportspeople, may need to take up a completely new career at the ages of 30 or 40. What becomes important is that our sports heroes arrive at that point not at a disadvantage but at least equally as prepared as their new competitors from outside the sporting world. The only way to ensure that is by commitment to the holistic development of our athletes right from the outset and throughout their athletic careers.</p><img src="https://counter.theconversation.com/content/94584/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Saunders received funding from the Australian Football League for two research projects entitled
i) Should the draft age be altered to better support player on and off field preparation for the AFL (2016)
ii) The impact of non-football engagement on AFL player outcomes (2011)</span></em></p>Many athletes struggle with joblessness, depression or a lack of purpose as they enter retirement.John Saunders, Associate Professor in Exercise Science, Australian Catholic UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/753132017-03-30T14:28:11Z2017-03-30T14:28:11ZThe ‘fourth industrial revolution’: potential and risks for Africa<figure><img src="https://images.theconversation.com/files/162948/original/image-20170328-3803-1jykm8e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Klaus Schwab, the World Economic Forum founder, holds his book about the Fourth Industrial Revolution.</span> <span class="attribution"><span class="source">Reuters/Denis Balibouse</span></span></figcaption></figure><p>Klaus Schwab, the founder of the World Economic Forum, <a href="https://www.amazon.com/Fourth-Industrial-Revolution-Klaus-Schwab/dp/0241300754/ref=dp_ob_title_bk">argues</a> that the single most important challenge facing humanity today is how to understand and shape the new technology revolution. What exactly is this revolution, and why does it matter, especially for Africa?</p>
<p>The “fourth industrial revolution” captures the idea of the confluence of new technologies and their cumulative impact on our world. </p>
<p>Artificial intelligence can produce a medical diagnosis from an x-ray faster than a radiologist and with pinpoint accuracy. Robots can manufacture cars faster and with more precision than assembly line workers. They can potentially <a href="https://www.technologyreview.com/s/603170/mining-24-hours-a-day-with-robots/">mine base metals</a> like platinum and copper, crucial ingredients for renewable energy and carbon cleaning technologies.</p>
<p>3D printing will change manufacturing business models in almost inconceivable ways. <a href="https://www.wired.com/2016/09/autonomous-vehicles-will-mean-end-traffic-stops/">Autonomous vehicles</a> will change traffic flows by avoiding bottlenecks. Remote sensing and satellite imagery may help to locate a blocked storm water drain within minutes and avoid city flooding. <a href="https://theconversation.com/africa-needs-its-own-version-of-the-vertical-farm-to-feed-growing-cities-74929">Vertical farms</a> could solve food security challenges. </p>
<p>The machines are still learning. But with human help they will soon be smarter than us. </p>
<p>The first industrial revolution spanned 1760 to 1840, epitomised by the steam engine. The second started in the late 19th century and made mass production possible. The third began in the 1960s with mainframe computing and semi-conductors. </p>
<p>The argument for a new category – a fourth industrial revolution – is compelling. New technologies are developing with exponential velocity, breadth and depth. Their systemic impact is likely to be profound. Policymakers, academics and companies must understand why all these advances matter and what to do about them. </p>
<p>So why does the fourth industrial revolution matter so much – specifically for Africa? And how should the continent approach the risks and opportunities?</p>
<h2>Exciting opportunities</h2>
<p>The revolution’s most exciting dimension is its ability to address negative externalities – hidden environmental and social costs. As Schwab <a href="https://www.amazon.com/Fourth-Industrial-Revolution-Klaus-Schwab/dp/0241300754/ref=dp_ob_title_bk">has written</a>: </p>
<blockquote>
<p>Rapid technological advances in renewable energy, fuel efficiency and energy storage not only make investments in these fields increasingly profitable, boosting GDP growth, but they also contribute to mitigating climate change, one of the major global challenges of our time.</p>
</blockquote>
<p>Some countries’ growth trajectories may follow the hypothesised <a href="http://isecoeco.org/pdf/stern.pdf">Environmental Kuznets Curve</a>, where income growth generates environmental degradation. This is partly because natural capital is treated as free, and carbon emission as costless, in our global national accounting systems. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/162950/original/image-20170328-3803-hb0bj7.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/162950/original/image-20170328-3803-hb0bj7.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/162950/original/image-20170328-3803-hb0bj7.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=364&fit=crop&dpr=1 600w, https://images.theconversation.com/files/162950/original/image-20170328-3803-hb0bj7.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=364&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/162950/original/image-20170328-3803-hb0bj7.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=364&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/162950/original/image-20170328-3803-hb0bj7.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=457&fit=crop&dpr=1 754w, https://images.theconversation.com/files/162950/original/image-20170328-3803-hb0bj7.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=457&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/162950/original/image-20170328-3803-hb0bj7.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=457&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The hypothesised Environmental Kuznets Curve.</span>
</figcaption>
</figure>
<p>New technologies make it possible to truncate this curve. It becomes possible to transition to a “<a href="https://www.weforum.org/pages/circular-economy-videos">circular economy</a>”, which decouples production from natural resource constraints. Nothing that is made in a circular economy becomes waste. The “Internet of Things” allows us to track material and energy flows to achieve new efficiencies along product value chains. Even the way energy itself is generated and distributed will change radically, relying less and less on fossil fuels. </p>
<p>Perhaps most importantly for African countries, then, renewable energy offers the possibility of devolved, deep and broad access to electricity. Many have still not enjoyed the benefits of the second industrial revolution. The fourth may finally deliver electricity because it no longer relies on centralised grid infrastructure. A smart grid can distribute power efficiently across a number of homes in very remote locations. Children will be able to study at night. Meals can be cooked on safe stoves. Indoor air pollution can basically be eradicated. </p>
<p>Beyond renewable energy, the Internet of Things and blockchain technology cast <a href="https://theconversation.com/how-to-make-an-internet-of-intelligent-things-work-for-africa-75008">a vision</a> for financial inclusion that has long been elusive or subject to exploitative practices. </p>
<h2>Risks</h2>
<p>No revolution comes without risks. One in this case is rising joblessness.</p>
<p>Developing countries have moved away from manufacturing into services long before their more developed counterparts did, and at fractions of the income per capita. Dani Rodrik calls this process “<a href="http://drodrik.scholar.harvard.edu/files/dani-rodrik/files/premature_deindustrialization.pdf">premature deindustrialisation</a>”. </p>
<p>The employment shares of manufacturing, along with its value addition to the economy, has long been declining in industrialised nations. But it’s also been declining in developing countries. This is unexpected, because manufacturing is still the primary channel through which to modernise, create employment (especially by absorbing unskilled labour) and alleviate poverty. Manufacturing industries that were built up under a wall of post-independence protectionism are starting to decompose. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/162952/original/image-20170328-3798-wb5oon.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/162952/original/image-20170328-3798-wb5oon.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/162952/original/image-20170328-3798-wb5oon.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=449&fit=crop&dpr=1 600w, https://images.theconversation.com/files/162952/original/image-20170328-3798-wb5oon.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=449&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/162952/original/image-20170328-3798-wb5oon.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=449&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/162952/original/image-20170328-3798-wb5oon.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=565&fit=crop&dpr=1 754w, https://images.theconversation.com/files/162952/original/image-20170328-3798-wb5oon.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=565&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/162952/original/image-20170328-3798-wb5oon.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=565&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Rodrik D, ‘Premature deindustrialisation’, Journal of Economic Growth, 21, 2016, p. 19.</span></span>
</figcaption>
</figure>
<p>The social effects of joblessness are devastating. Demographic modelling indicates that Africa’s population is <a href="https://www.ft.com/content/1d454bb8-435a-11e6-9b66-0712b3873ae1">growing rapidly</a>. For optimists this means a “dividend” of young producers and consumers. For pessimists, it means a growing problem of youth unemployment colliding with poor governance and weak institutions. </p>
<p>New technologies threaten to amplify current inequalities, both within and between countries. Mining – <a href="https://www.ft.com/content/f8c4edd4-ed2c-11e6-ba01-119a44939bb6">typically a large employer</a> – may become more characterised by keyhole than open heart surgery, to borrow a medical metaphor. That means driverless trucks and robots, all fully digitised, conducting non-invasive mining. A large proportion of the nearly <a href="http://ewn.co.za/2016/02/15/Job-cuts-to-escalate-in-South-African-mines-as-global-economy-slows">500 000 people</a> employed in South African mining alone may stand to lose their jobs. </p>
<p>Rising inequality and income stagnation are also socially problematic. Unequal societies <a href="http://www.hup.harvard.edu/catalog.php?isbn=9780674737136">tend to be</a> more violent, have higher incarceration rates, and have lower levels of life expectancy than their more equal counterparts.</p>
<p>New technologies may further concentrate benefits and value in the hands of the already wealthy. Those who didn’t benefit from earlier industrialisation risk being left even further behind.</p>
<p>So how can African countries ensure that they harness this revolution while mitigating its risks?</p>
<h2>Looking ahead</h2>
<p>African countries should avoid a proclivity back towards the <a href="http://www.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572014000100008">import substitution industrialisation</a> programmes of early independence. The answer to premature deindustrialisation is not to protect infant industries and manufacture expensively at home. Industrialisation in the 21st century has a totally different ambience. In policy terms, governments need to employ <a href="http://www.sciencedirect.com/science/article/pii/S1877050915002860">systems thinking</a>, operating in concert rather than in silos. </p>
<p>Rapidly improving access to electricity should be a key policy priority. Governments should view energy security as a function of investment in renewables and the foundation for future growth. </p>
<p>More generically, African governments should be proactive in adopting new technologies. To do so they must stand firm against potential <a href="http://scholar.harvard.edu/files/jrobinson/files/jr_barrierspublished.pdf">political losers</a> who form barriers to economic development. It pays – in the long-run – to craft inclusive institutions that promote widespread innovation.</p>
<p>There are serious advantages to being a first mover in technology. Governments should be building clear strategies that entail all the benefits of a fourth industrial revolution. If not, they risk being left behind.</p><img src="https://counter.theconversation.com/content/75313/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ross Harvey does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>New technologies are developing with exponential velocity, breadth and depth. Their systemic impact is likely to be profound.Ross Harvey, Senior Researcher in Natural Resource Governance (Africa), South African Institute of International AffairsLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/566592016-03-31T10:25:25Z2016-03-31T10:25:25ZWe need to look beyond unemployment to fix labor market inequality<p>When we think about disadvantages and challenges in the labor market, unemployment generally takes center stage, clearly exemplified by the <a href="http://www.bls.gov/news.release/empsit.nr0.htm">monthly jobs report</a> hype over one stat: the unemployment rate. </p>
<p>Is it up or down? What will it be next month? </p>
<p>The same is true in the academic world. While there is voluminous research on the causes and consequences of unemployment, there is less scholarship (although certainly some) on what it means to be involuntarily working part-time or stuck in a job that doesn’t fully utilize your skills. </p>
<p>Labor market insecurity and inequality aren’t just about whether someone is employed or not. In new research, I seek to address this issue by examining how being employed part-time or in a job you’re overqualified for affects your ability to get a new position. </p>
<h2>What’s missing from the jobs report</h2>
<p>If you dig past the headlines about the Bureau of Labor Statistics’ jobs report, released on the first Friday of every month, you’ll find some data on the number of individuals employed part-time for “economic reasons.” That is, they’d prefer to work full-time but aren’t doing so either because they couldn’t find such a job or because their hours were cut back. They are involuntary part-time workers. </p>
<p>Regardless of how far you read, though, there is one group missing from the report entirely: workers who are in jobs below their skill level, education or experience. These workers – who are often referred to as occupying positions of skills underutilization – go largely unexamined when we discuss the employment landscape in the U.S.</p>
<p>Similarly, in the academic world, part-time work and skills underutilization receive less attention than unemployment. A Google Scholar search for “unemployment” results in <a href="https://scholar.google.com/scholar?hl=en&q=unemployment&btnG=&as_sdt=1%2C44&as_sdtp=">over 2 million hits</a>, while searches for “part-time employment” or “part-time work” lead to roughly 300,000 results. </p>
<p>Fewer than 10,000 results are generated by searches for “skills underutilization,” “skills underemployment,” “overqualification” or “skills mismatch,” terms often used to describe workers in positions below their level of skill, education or experience.</p>
<h2>The consequences of being unemployed</h2>
<p>Overall, the large body of academic research on unemployment indicates that there are far-reaching consequences of being unemployed. These effects span many domains of life, from health to family dynamics to psychological well-being. </p>
<p>One question that scholars have explored recently is whether being unemployed actually makes it harder to get another job. The answer appears to be yes. </p>
<p>For example, from August 2011 to July 2012, a team of economists sent out fake job applications for real openings and randomly gave some of the CVs an employment gap – that is, an ongoing spell of unemployment ranging from one to 36 months at the time the application was submitted. They <a href="http://qje.oxfordjournals.org/content/128/3/1123.full">found</a> that employers were more likely to pass over applicants with longer gaps, with much of decline in employer interest occurring in the first eight months.</p>
<p>Using similar methods, a team of Swedish researchers <a href="http://www.ingentaconnect.com/content/aea/aer/2014/00000104/00000003/art00010">found</a> that workers who had been unemployed for at least nine months when applying for a job received significantly less interest from employers.</p>
<p>I wondered, does something similar happen to job applicants employed in part-time positions or in jobs below their skill level? </p>
<h2>Penalty for part-time or skills underutilization?</h2>
<p>Existing research has not fully addressed this issue, so I set out to explore this possibility, using methods similar to those employed by the previously mentioned studies on unemployment. I sent out thousands of fake job applications to apply for real openings in five major U.S. cities and across four types of occupations. </p>
<p>The results of the study, presented in an article <a href="http://asr.sagepub.com/content/81/2/262.abstract">published</a> in the April 2016 issue of the <em>American Sociological Review</em>, reveal that, for male job applicants, being employed in a part-time position or a job beneath their skill level is severely penalizing compared with those who remained employed in full-time positions at their skill level. </p>
<p>Male job applicants with full-time, standard jobs received “callbacks” (positive responses) from employers 10.4 percent of the time. However, the callback rate dropped to 4.8 percent for men in part-time positions and 4.7 percent for men in jobs that underutilized their skills. Indeed, men in these positions were treated no differently by potential employers than men who were unemployed, who received a 4.2 percent callback rate.</p>
<p>The story is a bit different for female job applicants. Similar to men, women in jobs beneath their skill level were penalized in a significant way compared with those in jobs at their skill level. Women in full-time, standard jobs at their skill level received callbacks 10.4 percent of the time, compared with 5.2 percent of the time in positions of skills underutilization. </p>
<p>However, women in part-time positions faced no penalty compared with those who remained employed full-time, receiving a callback rate of 10.9 percent. Women in part-time positions fared significantly better than men in part-time positions.</p>
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<h2>Easing labor market inequality</h2>
<p>Unemployment is, of course, extremely important and has far-reaching consequences for workers and their families. </p>
<p>But the effects of part-time work and skills underutilization are also real and affect <a href="http://www.bls.gov/cps/cpsaat08.htm">millions</a> of <a href="http://sf.oxfordjournals.org/content/85/2/835.short">workers</a> in the United States. Yet they are less frequently discussed and sometimes remain absent from our thinking about labor market inequality.</p>
<p>Emphasizing data on involuntary part-time work in the jobs report and thinking about public policy interventions to improve the outcomes of workers in these types of positions are of significant importance. And we should begin to regularly collect, analyze and publicize data on the number of workers employed in positions below their level of skill, education and experience. It would serve as an important addition to the monthly data on unemployment and part-time work.</p>
<p>Having data and detailed information on this population is an important step on the path to improving the economic security and labor market opportunities of the U.S. workforce.</p><img src="https://counter.theconversation.com/content/56659/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David S. Pedulla's research has received funding and support from the following entities: the National Science Foundation, the W.K. Kellogg Foundation, the Russell Sage Foundation, the UC-Davis Center for Poverty Research, the Horowitz Foundation for Social Policy, the Employment Instability, Family Well-Being, and Social Policy Network at the University of Chicago, the National Institute of Child Health and Human Development, Princeton University’s Department of Sociology and Center for African American Studies, the Fellowship of Woodrow Wilson Scholars, and the Population Research Center at the University of Texas at Austin.</span></em></p>There’s been a lot of research on whether being unemployed hurts your ability to get a new job. But what about if you’re working part-time or below your skill level?David S. Pedulla, Assistant Professor, Department of Sociology & Population Research Center, The University of Texas at Austin College of Liberal ArtsLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/549822016-02-19T13:16:24Z2016-02-19T13:16:24ZWhy we stick our heads in the sand about the risk of unemployment<p>The British job market is looking refreshingly stable: there were fewer unemployed people in the UK at the end of 2015 than at any time since 2005. The <a href="http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/february-2016/statistical-bulletin.html#tab-8--Unemployment">latest figures</a> from the Office of National Statistics showed that the unemployment rate for over-16s was 5.1% between October and December 2015, down from 5.7% a year earlier. </p>
<p>In such times of increasing employment – there were 521,000 more people in work at the end of 2015 than the end of 2014 – it can be easy to stop thinking about the risk of being laid off. Yet <a href="http://wes.sagepub.com/content/early/2015/02/23/0950017014556411">research</a> carried out by my colleagues and I has found that many couples ignore the negative signs, preferring to hope that they will not be affected by job loss. They act only when all hopes are dashed.</p>
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<p>It’s <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1475-4932.2011.00719.x/abstract">long been considered</a> that spouses (usually women) can act as a reserve army of workers, stepping in to pick up paid work when their partner loses their job. </p>
<p>But we found that even during times of economic crisis, this doesn’t always happen. Personal preferences, domestic and labour market constraints and issues around gender norms act are all factors that stop spouses from stepping into their partner’s role as the breadwinner – except in the extreme situation where the financial survival of the household is under threat.</p>
<p>Through in-depth interviews with 17 couples, we explored the ways in which they coped during times of squeezed budgets and economic uncertainty. The sample was carefully drawn from <a href="https://www.understandingsociety.ac.uk/about/innovation-panel">Understanding Society’s Innovation Panel</a>, an annual longitudinal survey that gathers a wealth of information about how the lives of people in UK households evolve. </p>
<p>From the survey data we could tell if couples had experienced some form of job loss during the period between 2008 and 2011 – arguably the worst years of the financial crisis. The sample was selected to reflect a diverse range of household and family profiles, including couples with or without children and from a range of incomes across the UK. </p>
<h2>In denial</h2>
<p>The findings suggest that people can be rather unprepared for losing their job, despite quite strong indicators that it is likely to happen. Even where participants talked about the prospect of redundancy as inexorable, they often did nothing until redundancy notices were served and spoke of their “shock” that it had actually happened. </p>
<p>One woman we interviewed, Gail, <a href="http://wes.sagepub.com/content/early/2015/02/23/0950017014556411">spoke about her husband</a>, who had been an executive in the construction industry, losing his job as: </p>
<blockquote>
<p>It was inevitable. They were going to sort of get rid of him … I think he sort of got an inkling it was going to happen, but of course you go on and you think, ‘Oh, it might blow over,’ but you get a gut feeling … So I would say probably about four weeks, maybe a couple of months absolute, you know, before we knew. But even then, you know, we didn’t know. And when it did happen, we were absolutely gobsmacked.</p>
</blockquote>
<p>Participants also told us how although they could see others around them losing their jobs, they felt that they would somehow be protected from job cuts. Roger, a technical manager, <a href="https://www.iser.essex.ac.uk/research/publications/working-papers/iser/2013-13">spoke with some annoyance</a> and bewilderment about how he lost his job while others kept theirs. </p>
<blockquote>
<p>Well, the department … they kept cutting, cutting, cutting … but I just felt that, ‘Hang on. It shouldn’t have been me.’ … So I thought right up to a month before that it was going to be … I was going to be the survivor and the other guy was going to go. </p>
</blockquote>
<h2>Got a job? Keep it</h2>
<p>For some of those currently in work, the spectre of redundancy could be very evident – but staying put was seen as preferable to jumping ship. Ian, an IT manager, <a href="http://wes.sagepub.com/content/early/2015/02/23/0950017014556411">explained</a> this in the sense of better the devil you know: </p>
<blockquote>
<p>You’ve got the choice of either hoping things are going to get better or decide there’s some better opportunities elsewhere, … at the moment, I’m just hanging in there. I was put at risk redundancy-wise, I’ve just come through that and it could well be that if things don’t get better that will happen again. </p>
</blockquote>
<p>Ian had a job, whereas he knew a lot of people in his line of work that didn’t. As he saw it, his best option was to keep his head down, work hard and hope for the best.</p>
<p>Almost by definition, being unemployed is distressing. It means you are ready to work, looking for a job but can’t find one. To handle any anxieties about the likelihood of this happening, people might prefer to overoptimistically rate their chances of keeping hold of their job. </p>
<p>In times of recession people can also feel particularly vulnerable to the threat of redundancy but choose to stick with what they have, rather than look for a more secure job, because it’s perceived as their best option among a set of poor alternatives.</p>
<p>Despite the recent falls in the unemployment rate, the figures show that being out of work is still an experience faced by many. As our research looked at unemployment in times of recession, it is not clear whether people take the same approach when the economic outlook is more positive – but we should be alert to the fact that they might. If a shock factor exists in times of recession – how much more shocking might it be to lose your job during relative prosperity.</p><img src="https://counter.theconversation.com/content/54982/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>This research was supported by funding from the ESRC under the grant ‘Understanding the impact of recession on labour market behaviour in Britain’ (grant number ES/I037628/1).
Understanding Society is funded by the ESRC (grant number ES/H029745/1)</span></em></p>Many couples ignore the warning signs that one of them might be about to lose their job.Karon Gush, Senior Research Officer, Institute of Social and Economic Research, University of EssexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/541432016-02-12T11:10:24Z2016-02-12T11:10:24ZYes, robots will steal our jobs, but don’t worry, we’ll get new ones<p>The U.S. economy added 2.7 million jobs in 2015, <a href="http://www.nytimes.com/2016/01/09/business/economy/jobs-report-hiring-unemployment-december.html">capping the best two-year stretch</a> of employment growth since the late ‘90’s, pushing the unemployment rate down to five percent. </p>
<p>But to listen to the <a href="http://www.msn.com/en-us/money/careersandeducation/8-jobs-that-will-go-extinct-by-2030/ss-BBlImkg">doomsayers</a>, it’s just a matter of time before the rapid advance of technology makes most of today’s workers obsolete – with ever-smarter machines replacing teachers, drivers, travel agents, interpreters and a slew of other occupations. </p>
<p>Almost half of those currently employed in the U.S. are at risk of being put out of work by automation in the next decade or two, according to a <a href="http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf">2013 University of Oxford study</a>, which identified transportation, logistics and administrative occupations as most vulnerable.</p>
<p>Does that mean that these formerly employed workers will have nowhere to go? Is the recent job growth a last gasp before machines take over, or can robots and workers coexist? </p>
<p>Research as well as recent history suggest that these concerns are overblown and that we are neither headed toward a rise of the machine world nor a utopia where no one works anymore. Humans will still be necessary in the economy of the future, even if we can’t predict what we will be doing. </p>
<h2>Rise of the Luddites</h2>
<p>Today’s apprehension about technology’s effect on the labor force is nothing new. </p>
<p>The anxiety began in the early 1800s when textile workers, who later became known as Luddites, destroyed machinery that reduced the need for their labor. The fact that calling someone a Luddite today is considered an insult is proof that those worries were largely unfounded. In fact, labor benefited right alongside productivity throughout the 19th and 20th centuries.</p>
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<p>Some worry that this dynamic has changed. Larry Summers, formerly the president of Harvard and director of the White House’s National Economic Council, for example, <a href="http://www.nber.org/reporter/2013number4/2013no4.pdf">recently changed his tune</a> about the unalloyed benefits of technology. </p>
<blockquote>
<p>Until a few years ago, I didn’t think this was a very complicated subject; the Luddites were wrong and the believers in technology and technological progress were right. I’m not so completely certain now. </p>
</blockquote>
<p>Derek Thomson, a senior editor at The Atlantic, sums up the arguments for why this time automation will replace labor permanently in an article titled <a href="http://www.theatlantic.com/magazine/archive/2015/07/world-without-work/395294/">A World Without Work</a>. </p>
<p>First, the share of economic output that is paid to labor has been declining. Second, machines are no longer merely augmenting human work; they are rapidly encroaching on work that today is capable of being done only by humans. Finally, the hollowing out of prime-age men (25-54 years old) in the workforce indicates a more permanent end to work. </p>
<h2>Crying wolf</h2>
<p>My own look at the data suggests that just as the critics of the past were crying “wolf,” so are the pessimists of today.</p>
<p>Yes, it’s true that from 1980 to 2014, workers’ share of output fell from nearly 58 percent to just over 52 percent – evidence that Thompson believes shows that labor’s importance is in a slow decline. </p>
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<p>However, <a href="http://bea.gov/papers/pdf/laborshare1410.pdf">recent work</a> by Benjamin Bridgman, an economist at the Bureau of Economic Analysis, has demonstrated that once depreciation and production taxes are taken into account, the story for U.S. workers doesn’t seem as pessimistic. While the most recent data show that the U.S. net labor share has fallen over time, as recently as 2008, the share was the same as in 1975. </p>
<p>Because of the rapid pace of technological improvements, <a href="http://blogs.wsj.com/economics/2015/03/26/thomas-piketty-says-labors-share-of-income-is-declining-but-is-it/">capital depreciates at a faster rate</a>. Companies, or owners of capital, must therefore spend a larger share of profits to repair technology or replace obsolete technology. As a result, labor’s declining share of output is directly correlated to the increasing share of output spent on technology. Since 1970, the share of our nation’s output spent on technology replacement has increased from just under 13 percent to more than 15 percent.</p>
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<p>In addition, whenever there are changes in production taxes (e.g., property, excise and sales taxes) the share of output paid to labor will decrease. As a result, while the gross labor share of income has declined, much of it can be explained by technological improvements and changes in government policy. </p>
<h2>Replace or complement?</h2>
<p>Machines are indeed replacing humans – and replicating what we thought were uniquely human skills – at a faster rate than many of us thought possible until recently. </p>
<p>For example, at the beginning of the 21st century, few people would have imagined that a computer could beat the best human in the world at Jeopardy. And yet, in 2011, IBM’s supercomputer Watson did exactly that by beating two former Jeopardy superstars, Ken Jennings and Brad Rutter. </p>
<p>But a focus on technology’s substitutionary (or replacement) role fails to appreciate how it can also be complementary. Job loss in some occupations will certainly continue, but they will be accompanied by gains in different fields, just as in the past. </p>
<p>Watson is a case in point. In 2012, a year after Watson’s Jeopardy victory, IBM formed a <a href="http://www.research.ibm.com/cognitive-computing/watson/watsonpaths.shtml#fbid=8z8YB5R7t_6">partnership</a> with the Cleveland Clinic to assist physicians and improve the speed and accuracy of medical diagnosis and treatments. In this case, Watson augments the skills of physicians, creating more demand for doctors with access to the supercomputer. </p>
<p>The biggest risk is that this will polarize the labor market as the demand for workers grows on both the high and low ends in terms of education. It’s a trend that economist David Autor <a href="https://www.aeaweb.org/articles.php?doi=10.1257/jep.29.3.3">has been documenting</a> since 1979. Highly skilled individuals in managerial, professional and technical occupations have all seen improvements, as have service jobs that require little education (in part because it’s difficult to automate the work of hairstylists or janitors). </p>
<p>While this polarization of jobs can have negative short-term effects in the middle of the distribution, it is a mistake to overstate the long-term consequences.</p>
<h2>What’s really happening to all the men</h2>
<p>Finally, it is true that since 1967, the share of men aged 25–54 without work has more than tripled, from five percent to 16 percent.</p>
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<p>But the reasons they’re not working have less to do with the rise of the machines than we’re being led to believe. According to a <a href="http://kff.org/other/poll-finding/kaiser-family-foundationnew-york-timescbs-news-non-employed-poll/">New York Times/CBS News/Kaiser Family Foundation poll</a> of Americans without jobs, 44 percent of <a href="http://www.nytimes.com/2014/12/12/upshot/unemployment-the-vanishing-male-worker-how-america-fell-behind.html">men surveyed</a> said there were jobs in their area they think they could obtain but weren’t willing to take them. In addition, around a third of those surveyed (including women) indicated that a spouse, food stamps or disability benefits provided another source of income. </p>
<p>An unwillingness to relocate geographically may also help explain the decline in labor force participation. In a <a href="https://www.expresspros.com/Newsroom/America-Employed/Survey-Of-The-Unemployed-Shows-47--Say-They-Have-Completely-Given-Up-Looking-For-A-Job.aspx?&referrer=http://www.expresspros.com/Newsroom/America-Employed-News-List.aspx?PageNumber=4">2014 survey</a> of unemployed individuals, 60 percent said that they were “not at all willing” to move to another state. </p>
<p>These findings suggest that while the U.S. boasts the <a href="http://www.bls.gov/jlt/">most job openings</a> since the government began tracking them nationwide (5.6 million), many of those without work don’t want to apply for one reason or another. </p>
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<h2>It’s not man versus machine yet</h2>
<p>These figures and polls paint a very different picture of the actual problem. In addition to geography constraints along with spousal and government income supports contributing to fewer people wanting to work, we also have a skills gap. Fortunately, this is a problem that we can overcome with better education and training, rather than resigning ourselves to an irreversible decline in the share of jobs that require a human.</p>
<p>During the most recent recession, there was a decline in construction and manufacturing jobs, which typically required lower levels of education, and an increase in health care and professional service jobs, which often require advanced degrees. </p>
<p>Instead of wringing our hands and blaming technology, we should be rolling up our sleeves to ensure that people who lose their jobs to technology are being retrained. This also requires patience – recognizing that it will take time for these workers to be reemployed in higher-skilled jobs. </p>
<p>Until the number of job openings declines and remains persistently low, one should be careful about pitting man versus machine.</p><img src="https://counter.theconversation.com/content/54143/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Jones formerly worked as the Director of Research at the University of Cincinnati Economics Center, which provides economic consulting services to a wide range of clients, including governments, nonprofits, and the private sector. He has been an Emerging Education Policy Scholar with the Thomas B. Fordham Institute and the American Enterprise Institute (AEI). He has received funding from the Mellon Foundation to organize a seminar series on the Political Economy of K-12 Education Reform. He is currently on the Board of Directors for the Association of Universities for Business and Economics Research (AUBER).</span></em></p>Some suggest half of current jobs will be lost to automation over the next decade or two. But it’s far too early to pit man versus machine.Michael Jones, Assistant Professor, Educator in Economics, University of Cincinnati Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/466892015-08-27T05:07:33Z2015-08-27T05:07:33Z5 things to remember when you hear politicians take credit for ‘job creation’<figure><img src="https://images.theconversation.com/files/93094/original/image-20150827-15411-7npss0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Employment growth does not equal ‘jobs creation’.</span> <span class="attribution"><span class="source">AAP Image/Joel Carrett</span></span></figcaption></figure><p>Politicians have a love hate relationship with the Australian Bureau of Statistics’ monthly <a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/6291.0.55.001">Labour Force Survey</a>. The monthly measures of the unemployment rate and employment growth are also subject to some of the most error. </p>
<p>For the most part, “error”, does not imply the ABS has made a mistake in adding up their numbers; it just means that they’ve used only a sample of the population in their survey and there is a random element to each estimate.</p>
<p>Unfortunately, all too often this random element is reported as real, with politicians inferring that the other mob is doing a bad job or that they are doing a great job at managing the economy – usually based upon little more than random fluctuations from a sample.</p>
<h2>Do politicians ‘create jobs’?</h2>
<p>The ABS’ latest update in <a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/6291.0.55.001">July 2015</a> reported that the unemployment rate, in seasonally adjusted terms, increased from 6.1% to 6.3% and that employment grew by 38,500. </p>
<p>Both sides on politics jumped on these numbers immediately. Federal Treasurer Joe Hockey <a href="http://jbh.ministers.treasury.gov.au/transcript/181-2015/">said</a> this week that</p>
<blockquote>
<p>In Australia, last month, 38,000 new jobs were created. That’s 10 times the number of jobs in one month than were created in the last month under the Labor Government. </p>
</blockquote>
<p>For his part, Federal Opposition leader, Bill Shorten <a href="https://au.finance.yahoo.com/news/jobs-jobless-rates-spikes-6-063420151.html">said</a> he was “greatly concerned” by the rise in the unemployment rate to 6.3% in July, matching an almost 13-year high <a href="http://www.ibtimes.com.au/rise-number-jobseekers-raises-unemployment-rate-13-year-high-1459416">reported</a> in early 2015.</p>
<p>The politicians may be quoting ABS numbers, but there’s something very wrong about the way they’re framing them.</p>
<p>The ABS also <a href="http://www.abs.gov.au/ausstats/abs@.nsf/PrimaryMainFeatures/6298.0.55.001?OpenDocument">publishes</a> its margin of error, or standard errors. For the unemployment rate of 6.3%, the ABS is 95% confident that the true rate is between 5.9% and 6.7%. They are equally confident that employment growth was between -19,500 and 96,500.</p>
<p>So we can’t be entirely sure whether in July employment went up or went down. They’re also uncertain if the unemployment rate went up or down. Statistically, it is most likely that both went up – but we don’t know for sure.</p>
<p>That’s because the labour force report is based on a survey of around 52,000 people. This sample represents around 0.3% of Australian adults in a given month. Had a parallel survey been run in July with a different 52,000 people sampled, the results would have been different. </p>
<p>Results from a sample are only ever an “estimate” and therefore subject to what is known as sampling error. The single estimate the ABS provides is our best estimate, but we know that it is possible the “true” population values for unemployment or employment could be better or worse than the ABS survey estimate.</p>
<p>The Labour Force Survey is large compared to opinion polls, which are often between 1000 and 2000 responses. In spite of this large sample, the survey still results in a large error band for “rare events” such as unemployment or “movement” estimates such as employment growth. The ABS could reduce the error in these estimates by increasing the sample – but this increases the cost of the survey and would require the ABS to make savings and likely reduce quality in other publications, given their <a href="http://www.abc.net.au/news/2014-10-09/abs-staff-say-data-undermined-by-funding-cuts/5801844">budget constraints</a>. </p>
<h2>A better way to interpret jobs data</h2>
<p>A sensible approach with the labour force survey is to either have one eye on the seasonally adjusted numbers and another eye on the standard error tables or, perhaps more simply use the “trend” numbers which remove much of the month-to-month volatility in the seasonal numbers. These are all published in the same ABS publication and spreadsheet.</p>
<p>The problem for economic journalists is that standard error tables complicate the story. The trend numbers are a much less interesting story. The trend numbers for the unemployment rate show that unemployment has been at 6.1% since March this year and was at 6.2% back to August 2014. </p>
<p>So, a few key points to remember about the labour force survey:</p>
<ol>
<li><p>Movements in monthly employment statistics are quite volatile. Focusing on the trend statistics and taking a longer view of seasonally adjusted or original numbers makes more sense.</p></li>
<li><p>Employment statistics tend to be a lagging indicator of the labour market and the economy more broadly, since they reflect the hiring intentions of firms in the months prior the release of the numbers.</p></li>
<li><p>The strength or otherwise of the labour market is determined by both the demand in the economy and the supply of labour from individuals. Both of these factors are driven by international and domestic economic conditions, confidence in the economy, economic policy from years in the past, structural changes in the economy and a range of other factors. Politicians play a role in these factors, sure, but it’s unlikely they can claim much credit for a strong monthly outcome of the labour force survey – or that they are to blame for a poor outcome.</p></li>
<li><p>Employment growth does not equal “jobs creation”. Employment growth is the net outcome of much larger gross flows of employment which includes both job creation and job destruction.</p></li>
<li><p>No single economic statistic is perfect. Each has their strengths and weaknesses. A better understanding of the labour market and the broader economy should include taking note of a wide range of economic statistics both within the labour force publication (such as hours worked, underemployment statistics) and beyond the labour force publication such as business confidence, national accounts, job vacancies and population statistics.</p></li>
</ol><img src="https://counter.theconversation.com/content/46689/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ben Phillips works for the National Centre for Social and Economic Modelling (NATSEM), an independent university research organisation specialising in academic research that undertakes consulting services to a wide range of clients.
</span></em></p>Politicians all too often use monthly jobs numbers to infer that the other mob is doing a bad job or that they are doing a great job at managing the economy. But that’s a flawed use of the data.Ben Phillips, Associate Professor, Centre for Social Research and Methods, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/412122015-05-06T14:25:29Z2015-05-06T14:25:29ZFact Check: do job centres have a target for ‘benefit sanctions’?<blockquote>
<p>There’s a deliberate target, for no matter what your behaviour, you will get sanctioned by the job centre. You don’t then find out about it until you go to the hole in the wall in the bank … to get your money out. You go there, you get no money, you go to a high street money lender that you can’t afford, or you go to a food bank because you can’t feed your kids. It’s utterly unacceptable.</p>
</blockquote>
<p><strong>Jim Murphy, Labour leader in Scotland, <a href="http://www.bbc.co.uk/iplayer/episode/b05tv6dm/the-leaders-debate">BBC Scottish Leaders Debate</a>.</strong></p>
<p>Jim Murphy’s comments on job centres led to a heated exchange between him and Ruth Davidson, the Conservative leader in Scotland, who said he was lying. To check out the veracity of Murphy’s comment – which the Labour party confirmed to The Conversation refers to the whole of the UK, not just Scotland – we need to look back at the history of how and when benefits are taken away from people. </p>
<p>Benefit sanctions – or the cessation of payments for a period where claimants fail to meet a range of jobsearch conditions – have been part of Jobseekers Allowance (JSA) regime since it was introduced in 1996. The stringency of JSA sanctions regime increased under the Labour government. In its third term for example, Labour <a href="http://ner.sagepub.com/content/231/1/R44.full.pdf+html">introduced</a> worksearch requirements for lone parents whose youngest child was aged over 12, subsequently reducing this age threshold to seven.</p>
<p>Under the coalition government, both the severity of sanctions and the opportunities for falling foul of the conditionality regime have increased. Following the <a href="http://www.legislation.gov.uk/ukpga/2012/5/contents/enacted/data.htm">Welfare Reform Act 2012</a>, claimants can be required to undertake a greater number and greater range of actions to find work. </p>
<p>The graph below shows the number of JSA sanctions made by JobCentre Plus offices each month since April 2000 (left hand axis and red dashed line) and expresses these as a proportion of all JSA claimants (right-hand axis, dark blue line).</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/80658/original/image-20150506-22652-1urublq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/80658/original/image-20150506-22652-1urublq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/80658/original/image-20150506-22652-1urublq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=391&fit=crop&dpr=1 600w, https://images.theconversation.com/files/80658/original/image-20150506-22652-1urublq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=391&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/80658/original/image-20150506-22652-1urublq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=391&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/80658/original/image-20150506-22652-1urublq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=492&fit=crop&dpr=1 754w, https://images.theconversation.com/files/80658/original/image-20150506-22652-1urublq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=492&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/80658/original/image-20150506-22652-1urublq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=492&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Left-hand axis shows number of ‘adverse’ sanctions, i.e. decisions found against the claimant (not the number of claimants sanctioned) Source: DWP. Right-hand axis shows sanctions as a proportion of claimants in each month. Note that there is a lag between a claimant being referred for a sanction decision, and the decision being taken. This lag can range from a few weeks to several months, depending on appeals. Data here is likely to underestimate very slightly the sanctions as a proportion of JSA claimants.</span>
<span class="attribution"><a class="source" href="https://www.gov.uk/government/statistics/jobseekers-allowance-and-employment-and-support-allowance-sanctions-decisions-made-to-september-2014">Source: DWP and NOMIS</a>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>Sanctions have risen in both numbers and proportion terms from the late 2000s. The temporary fall in the proportion of sanctions during the recession was, <a href="http://www.nao.org.uk/wp-content/uploads/2013/03/Job-Centres-Full-report.pdf">according to the National Audit Office</a>, due to the Department for Work and Pensions (DWP) relaxing service requirements to cope with increased claimant numbers and limited resources. </p>
<p>Sanctions increased under the coalition government, particularly following the introduction of the <a href="https://www.gov.uk/government/publications/jobseekers-allowance-overview-of-sanctions-rules">new sanctions regime</a> in October 2012. It has been <a href="http://www.jrf.org.uk/sites/files/jrf/Welfare-conditionality-UK-Summary.pdf">suggested</a> that the fall in sanctions in 2011-12 may reflect the introduction of the Work Programme in June 2011. </p>
<p>The Work Programme involves the contracting out of some jobcentre activity to private and third sector organisations. These organisations cannot impose sanctions, but report compliance doubts to DWP, who may then decide to impose a sanction. Thus the introduction of the Work Programme may have resulted in a temporary reduction in the number of sanctions issued. <a href="http://www.jrf.org.uk/sites/files/jrf/Welfare-conditionality-UK-Summary.pdf">Evidence suggests</a> that the young and vulnerable groups are particularly likely to be sanctioned. </p>
<p>The sanctions regime now also affects <a href="http://www.publications.parliament.uk/pa/cm201415/cmselect/cmworpen/814/814.pdf">an increasing number</a> of Employment and Support Allowance (ESA) claimants – who are too ill or disabled to work currently, but whom the DWP consider will be capable of work at some time in the future.</p>
<h2>Implicit targets?</h2>
<p>In regards to Murphy’s specific allegation about a target, there is no official target for the number of JSA sanctions achieved, either nationally or for individual JobCentrePlus (JCP) offices. However, concerns have been expressed in relation to both the JCP’s performance framework, and whether JCP advisers face an implicit target relating to sanctions. The Scottish Labour party pointed The Conversation towards a <a href="http://www.publications.parliament.uk/pa/cm201415/cmselect/cmworpen/814/814.pdf">report by parliament’s Work and Pensions Committee</a>, published in March 2015, highlighting the issue and calling for a review. </p>
<p>Since its new performance monitoring regime was introduced in April 2011, JCP’s performance is primarily measured by the proportion of claimants who have left benefit, regardless as to whether the claimant entered employment or not. The Work and Pensions Select Committee raised concerns in <a href="http://www.publications.parliament.uk/pa/cm201314/cmselect/cmworpen/479/47907.htm#a17">paragraph 92 of its report</a> that Jobcentre staff might see sanctioning as a route to achieving some performance targets.</p>
<p>In addition, in evidence to the Work and Pensions Committee (<a href="http://www.publications.parliament.uk/pa/cm201314/cmselect/cmworpen/479/47907.htm#a17">paragraph 89</a>), the PCS union – which represents Jobcentre staff – reported that JCP advisers were being put under pressure by management to increase sanctioning rates. PCS argues that the DWP had “expectations” about the appropriate level of sanctioning, that these were “targets by another name”, and that Jobcentre staff whose sanctioning rates were not meeting expectations were subject to an “improvement plan”. The DWP denied the existence of any national or local targets for sanctioning in its evidence to the committee. </p>
<h2>In the dark</h2>
<p>What about Jim Murphy’s point that claimants sometimes don’t know that they have been sanctioned until they try to withdraw money? In fact, this point was made in the 2014 <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/335144/jsa-sanctions-independent-review.pdf">Oakley Review</a> into the operation of JSA sanctions. It reported that there were cases in which: “the first that claimants knew of adverse decisions was when they tried to get their benefit payment out of a cash point but could not”. </p>
<p>There is an ongoing debate around the likely effectiveness of a stricter sanctions regime in getting people into work, as opposed to simply reducing benefit spending. This is particularly the case given that the increased use of sanctions has coincided with a <a href="http://ner.sagepub.com/content/221/1/F4.short?rss=1&ssource=mfr">reduction</a> in other forms of support for jobseekers. The Work and Pensions Committee notes that evidence on the effectiveness of financial sanctions in getting people into work is “very limited and far from clear-cut”. Short-term benefits in getting people off benefits may hide less favourable long-term outcomes on <a href="http://www.jrf.org.uk/sites/files/jrf/Welfare-conditionality-UK-Summary.pdf">employment retention</a>, health, and <a href="http://www.publications.parliament.uk/pa/cm201314/cmselect/cmworpen/479/479vw36.htm">financial circumstances</a>.</p>
<h2>Verdict</h2>
<p>Jim Murphy was arguably somewhat disingenuous in implying that there is a target for the number of sanctions made by job centres. However, there is some evidence that the publication of statistics on sanctions, together with a pressure to reduce welfare spending, creates the sense among advisers that there is an implicit target. Furthermore, the JCP performance framework may create perverse incentives for benefit off-flow, partly induced by sanctions, to be perceived as a positive outcome.</p>
<h2>Review</h2>
<p>It seems very clear to me that there are no centrally imposed targets for sanctions: certainly the legislation and regulations do not specify targets, and I am happy to take DWP at their word when they say that they do not set targets for Job Centre Plus.</p>
<p>On the other hand, the PCS union have presented evidence to MPs that show that sanction rates are monitored at the level of the adviser, the team, the office and the district, and that some individual managers take action with their staff if sanction rates are “too low”. This seems to be to be evidence that (at least) some managers do have implicit targets; what we don’t know for sure, though, is how widespread is this practice within Jobcentre Plus. – <strong>Mike Brewer</strong></p>
<div class="callout">The Conversation is fact checking political statements in the lead-up to the May UK general election. Statements are checked by an academic with expertise in the area. A second academic expert reviews an anonymous copy of the article.<br><br><a href="https://theconversation.com/factchecks/new">Click here to request a check</a>. Please include the statement you would like us to check, the date it was made, and a link if possible. You can also email factcheck@theconversation.com </div><img src="https://counter.theconversation.com/content/41212/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Eiser receives funding from Economic and Social Research Council, but the views expressed in this article are his own and do not reflect those of the research council. </span></em></p><p class="fine-print"><em><span>Mike Brewer has had several contracts to undertake researched funded by the Department for Work and Pensions; the most recent of these were to undertake (separate) evaluations of the impact of In Work Credit, Lone Parent Obligations, and reforms to Local Housing Allowance. He has also received funding from the ESRC, the Joseph Rowntree Foundation and the Nuffield Foundation. He is currently on a Task Group assisting the Joseph Rowntree Foundation in formulating an Anti-Poverty Strategy for the UK, and was previously been a member of two Expert Working Groups advising the Scottish Government on issues to do with welfare policy in a (hypoethetically) independent Scotland.</span></em></p>Labour’s Jim Murphy and the Conservatives’ Ruth Davidson clashed over targets for sanctioning people on benefits. Who was right?David Eiser, Research Fellow, Economics , University of StirlingLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/378232015-02-20T06:14:20Z2015-02-20T06:14:20ZNeither Tories nor Labour have the answers to get unemployed young people working<p>David Cameron has set his stakes high when it comes to getting young people into work. Announcing plans for a new programme aimed at pushing young people into work, on February 17 the <a href="http://www.independent.co.uk/news/uk/politics/generalelection/david-cameron-wants-young-people-to-work-30-hours-a-week-for-benefits-in-new-tory-plan-10051342.html">prime minister said</a> the Conservatives would “effectively abolish long-term youth unemployment” in the next parliament. </p>
<p>Labour has also set out its own proposals to guarantee jobs for unemployed youth. Yet neither proposal provides the overall solution that young people need to get well-paid, sustainable employment. </p>
<p>As participation in post-16 education has grown, young people who leave early to seek employment have become increasingly marginalised and regarded as a drain on society. While it is fairly easy to portray 16 or 17-year-olds who are not in employment, education or training (NEET) as a small group of disaffected idlers, it is more difficult to dismiss older people in this way.</p>
<p>In September 2014, <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/375989/Quarterly_Brief_NEET_Q3_2014_FINAL.pdf">there were 932,000 NEET 16 to 24-year-olds</a>, of whom 830,000 were aged 18 to 24. Although these rates are well <a href="http://www.oecd.org/youth.htm">below southern European levels</a>, the waste of talent and threat of long-term vulnerability they represent is still alarming.</p>
<h2>30 hours of community work</h2>
<p>The Conservatives <a href="http://www.theguardian.com/society/2014/sep/28/david-cameron-welfare-youth-unemployment">had already committed</a> to abolishing the Jobseekers’ Allowance (JSA) for 18 to 21-year-olds and replacing it with a “Youth Allowance” at the same level. Their <a href="http://www.bbc.co.uk/news/uk-politics-31500763">new policy announcement</a> has gone further, and a future Conservative government will require 18 to 21-year-olds who have previously been without work or education for six months to do 30 hours of community work a week as soon as they start claiming benefits. </p>
<p>What this work would involve is not entirely clear, but examples have been given of making meals for the elderly or joining local charities. If the Youth Allowance is the same as the current rates of £57 per week, then 30 hours community work gives £1.91 per hour. At 30 hours a week, and going by <a href="https://www.gov.uk/national-minimum-wage-rates">current rates</a> this would compare to an equivalent of £81.90 for apprentices and £153.90 for national minimum wage. </p>
<p>The proposal would currently affect around 50,000 young people, according to the Conservatives, a relatively small number compared with overall rates but potentially targeting a highly vulnerable group. Essentially, it assumes that what stands between NEET young people and sustainable employment is a lack of work ethic and “employability”. <a href="http://www.theguardian.com/politics/2015/feb/17/is-the-tory-plan-to-strip-benefits-from-workless-young-people-a-good-idea">According to Cameron</a>: “What these young people need is work experience and the order and discipline of turning up for work each day.”</p>
<h2>Been here before</h2>
<p>Labour was <a href="http://www.bbc.co.uk/news/uk-politics-31500763">quick to point out</a> that the government had piloted a similar scheme in London in 2012-13, but there had been “no significant impact” on employment outcomes. In fact, this is not the entire story. Evaluation <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/378308/rr888-day-one-support-for-young-people-trailblzer.pdf">of the scheme</a> showed a number of benefits for young people who took part in work placements. Nearly all felt more able to cope with the routine of going to work and many talked about having greater motivation and increased confidence. </p>
<p>Yet as Labour critics have noted the scheme <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/380171/day-one-support-young-people-trailblazer-impact-analysis.pdf">had no significant impact</a> on employment outcomes and provided very limited forms of work experience, according to a preliminary analysis for the government. </p>
<p>Indeed, 58% of participants <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/378308/rr888-day-one-support-for-young-people-trailblzer.pdf">were placed in charity shops</a>, and almost half of all those who undertook placements felt that they were unsuited to their needs. What these earlier experiences show is the importance of the quality of work provided and the nature of the training and support given to young people. Without something to put in it, endless polishing of a CV will not improve anyone’s employability.</p>
<h2>Compulsory Jobs Guarantee</h2>
<p>What, then, of Labour’s alternative? Under the party’s <a href="http://labourlist.org/2014/03/why-were-introducing-a-compulsory-jobs-guarantee/">Compulsory Jobs Guarantee,</a> every young person out of work for more than 12 months would be offered a “starter job”: government-subsidised paid work with training for six months. As with the Conservative proposal, continued receipt of benefits would be conditional on taking up this offer. </p>
<p>Once again, the quality of the programme and the impact on employment outcomes would be crucial questions, although Labour points to a <a href="http://wales.gov.uk/topics/educationandskills/skillsandtraining/jobsgrowthwales/?skip=1&lang=en">similar scheme in Wales</a> as evidence that this kind of initiative can work. By contrast, Conservative critics claim that a work-subsidy scheme introduced in 2009 under the previous Labour government, the Future Jobs Fund, “<a href="http://www.itv.com/news/central/2012-03-16/ed-miliband-in-midlands-to-outline-labours-youth-jobless-plan/">squandered millions</a>” on ineffective provision. A 2012 evaluation by the <a href="http://www.niesr.ac.uk/blog/future-jobs-fund-what-waste#.VOYPPi7eKmd">National Institute of Economic and Social Research</a> found it’s impact had been “substantial, significant and positive”. </p>
<p>Although the emphasis is different, with Conservative rhetoric highlighting the need to eradicate a “something for nothing” culture and Labour using the expression “guarantee” to soften the compulsory element, there are clearly strong similarities between these proposals. Both parties are surely right to target the longer-term unemployed element of the NEET category, in recognition of the greater vulnerability of this group compared with others, many of whom are outside education and employment for short periods. </p>
<p>But in a number of respects, both proposals miss the point. Without structural increases in employment at particular skill levels, all that employability programmes can do is make certain individuals more competitive, perhaps increasing their own chances of employment but eroding the advantages of other young people who are already “work ready”. </p>
<p>Of course, work-readiness is only one element of employability. If we are to improve young people’s chances of sustainable and rewarding employment, equipping them with specific skills needed by employers is essential. Strengthening and further expanding the apprenticeship system, alongside measures to stimulate employer demand for skills, is a far better option in the longer term, although perhaps less headline-catching at election time.</p>
<p>Neither proposal addresses another debate that will be central to the election: improving the prospects of millions of people experiencing <a href="https://theconversation.com/largest-study-of-uk-poverty-shows-full-time-work-is-no-safeguard-against-deprivation-28168">in-work poverty</a>. The kind of jobs or work experience discussed above are unlikely to lead to well-paid employment for the majority of their participants. </p>
<p>The way young people and adults become trapped in a “low pay, no pay” cycle <a href="http://www.jrf.org.uk/publications/understanding-recurrent-poverty">have been well documented</a> by researchers and churning between insecure work and unemployment is one of the most likely outcomes for participants in the proposed schemes. They redefine, rather than eradicate, youth unemployment, and the young voters they affect deserve far better from both parties.</p>
<hr>
<p>Next read: <a href="https://theconversation.com/more-places-available-at-university-but-future-precarious-for-many-school-leavers-30440">More places available at university but future precarious for many school leavers </a></p><img src="https://counter.theconversation.com/content/37823/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ron Thompson received funding in 2010-13 from the Leverhulme Trust as co-director a longitudinal study of NEET young people. He also received funding from the Joseph Rowntree Foundation for a similar project in 2013. </span></em></p>Conservative and Labour proposals for young jobseekers have different rhetoric, but both miss the point.Ron Thompson, Researcher, School of Education and Professional Development, University of HuddersfieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/223112014-02-17T05:30:21Z2014-02-17T05:30:21ZIs job insecurity becoming the norm for young people?<figure><img src="https://images.theconversation.com/files/40576/original/8q2fg8zc-1391485262.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The future for young workers is looking less secure, with casual work taking hold.</span> <span class="attribution"><span class="source">shutterstock.com</span></span></figcaption></figure><p>In recent years, job insecurity among young people has risen to unsettling proportions. Last year, <a href="http://www.economist.com/news/leaders/21576663-number-young-people-out-work-globally-nearly-big-population-united">The Economist</a> reported that as many as 290 million 15-24 year olds were not participating in the labour market — “nearly as large as the population of America”. </p>
<p>According to the <a href="http://www2.ilo.org/global/research/global-reports/global-employment-trends/youth/2013/lang--en/index.htm">International Labour Organisation</a>, 73.4 million young people – 12.6% – were expected to be out of work in 2013, an increase of 3.5 million between 2007 and 2013. Alongside this figure is “a proliferation of temporary jobs and growing youth discouragement in advanced economies; and poor quality, informal, subsistence jobs in developing countries”.</p>
<p>In Australia, the figures are less pronounced but still striking. As the <a href="http://www.actu.org.au/Images/Dynamic/attachments/6637/Lives%20on%20Hold%20-%20Unlocking%20the%20potential%20of%20Australia%E2%80%99s%20workforce.pdf">Independent Inquiry into Insecure Work</a> pointed out, casual work is concentrated among young people. One fifth of all casual workers are aged 15-19 and from 2001 to 2011 the prevalence of casual work increased significantly for this age group and to some extent for 20-24 year olds for the period, but far less for older age groups. Underemployment, defined by the ABS as part-time workers who are available to do more work, <a href="http://www.fya.org.au/wp-content/uploads/2013/09/FYA_HYPAF-2013_Digital1.pdf">rose significantly</a> following the global financial crisis and this trend has not abated. </p>
<h2>Trends in youth employment</h2>
<p>Five trends are worth noting. First, since the 1980s the number of full-time job opportunities for teenagers has been steadily declining. </p>
<p>Second, there has been an increase in the uptake of casual and part time work by young people in general (aged 15-24). As I have written elsewhere in <a href="http://theconversation.com/youth-face-snakes-and-ladders-on-the-path-to-full-time-employment-10677">The Conversation</a>, many want to work more but are unable to do so. </p>
<p>Third, beyond the impact of economic downturns like the financial crisis, globalisation is creating challenges for young people seeking work in Australia. As Bob Birrell and Ernest Healy <a href="https://theconversation.com/scarce-jobs-migrants-or-locals-at-the-end-of-the-job-queue-17496">pointed out last year</a>, young working holiday makers from overseas are intensifying competition for jobs with young local workers. Particularly vulnerable are those “without post-school education, who are seeking less skilled, entry-level jobs.” </p>
<p>The stark nature of competition for jobs globally is best illustrated in the book <a href="http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTEDUCATION/0,,contentMDK:22670727%7EmenuPK:282391%7EpagePK:64020865%7EpiPK:51164185%7EtheSitePK:282386,00.html">The Global Auction</a>. The authors note a German website advertising “cleaning, clerical, and catering jobs…offered by employers with a maximum price for the job; those looking for employment then underbid each other, and the winner was the person willing to work for the lowest wages”. In a highly competitive global labour market, could this be the future of working life?</p>
<p>Fourth, Birrell and Healy also highlight that a growing share of local workers aged 55 and over are staying in the workforce. Between May 2003 and May 2013, the share of those aged 60-64 in the workforce increased from 39% to 54%. This increasing competition for work particularly affects young people who are qualified but lack experience. </p>
<p>The final trend arises from a global mismatch between skills and jobs. A <a href="http://m.afr.com/p/australia2-0/young_underemployed_and_unwanted_wI5z7fLh6loFWKePz74sJJ">number of business surveys</a> confirm the perception that young people are underprepared for working life – ranging from foundational skills in literacy and numeracy, to soft skills such as communication and problem solving. The need to better develop these skills – though valuable – could also reflect a wider need to prepare young people for a world of insecure work. Serving as a kind of adversity capital that enables young people to be more adaptive, flexible and resilient, they also reflect the need to prepare young people for more fluid working lives in which the conventional notion of a career is obsolete. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/40578/original/dh55c696-1391485474.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/40578/original/dh55c696-1391485474.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/40578/original/dh55c696-1391485474.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/40578/original/dh55c696-1391485474.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/40578/original/dh55c696-1391485474.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/40578/original/dh55c696-1391485474.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/40578/original/dh55c696-1391485474.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Secure work doesn’t always await people ending their post school study.</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-142514485/stock-photo-students-taking-an-active-part-in-a-lesson-while-sitting-in-a-lecture-hall.html?src=Z3DamfwhAXIulp2ddRPZXw-1-144">Shutterstock.com</a></span>
</figcaption>
</figure>
<h2>Is full-time work becoming out of reach for young people?</h2>
<p>Working life in general is increasingly competitive and “fluid”. The <a href="http://www.fya.org.au/wp-content/uploads/2013/09/FYA_HYPAF-2013_Digital1.pdf">rate of casualisation</a> across the Australian workforce increased from 18.9% in 1988 to around 25% in 2012. The levels of “non permanent” work and extent of casualisation are hotly contested, with many claiming casual work is valued by young people. It <a href="http://www.afr.com/p/insecure_work_claim_union_beat_up_BBih9jxHDIO4LIPz4pjZnJ">is argued</a>, for example, that “casuals do not want to lose their flexibility or their casual loading”, or that casual work is preferred “as it allows [casual workers] to take part in the workforce and balance family responsibilities or study commitments”. </p>
<p>But a question arises as to whether secure work awaits those ending their post-school study and training. Teenagers in part time jobs are <a href="http://www.fya.org.au/research/how-young-people-are-faring-2011/">statistically</a> only slightly more likely to move into full-time employment than those who are unemployed and since the latter half of the 1980s, the age at which young people enter full-time work has increased. Increasing levels of education amongst young people overall mean that those with poor education outcomes are likely to struggle in the labour market, but insecurity is not confined to those without sufficient qualifications. </p>
<p>There is no doubt that some young people prefer casual and part-time work because of the benefits that flexibility offers. But in the overarching context of labour market change, while things <a href="http://www.fya.org.au/wp-content/uploads/2013/09/FYA_HYPAF-2013_Digital1.pdf">do get better</a> past the age of 25, it would appear that for many, the option to secure full-time work is out of reach. </p>
<hr>
<p><em>This is the second piece in our Insecure work series. Click on the links below to read the other pieces.</em></p>
<p><a href="https://theconversation.com/workplace-flexibility-on-insecure-ground-22005">Workplace ‘flexibility’ on insecure ground</a></p>
<p><a href="https://theconversation.com/viewpoints-should-penalty-rates-be-abolished-22819">Viewpoints: should penalty rates be abolished?</a></p>
<p><a href="https://theconversation.com/online-labour-marketplaces-job-insecurity-gone-viral-20020">Online labour marketplaces: job insecurity gone viral?</a></p><img src="https://counter.theconversation.com/content/22311/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lucas Walsh does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In recent years, job insecurity among young people has risen to unsettling proportions. Last year, The Economist reported that as many as 290 million 15-24 year olds were not participating in the labour…Lucas Walsh, Associate Professor and Associate Dean (Berwick), Faculty of Education, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.