Continuing jobs shortage is key reason for unemployment in cities, says report
Policy makers are today urged to acknowledge that a shortage of jobs, not poor skills or motivation, is the main reason why there are continuing high levels of unemployment in many of Britain’s major cities. The warning that many national policies wrongly diagnose the urban ‘jobs gap’ comes in a study by researchers at the University of Glasgow, funded by the Joseph Rowntree Foundation.
Providing the first systematic analysis of urban employment trends for more than a decade, the report shows that there has been a net loss of 500,000 jobs in the 20 biggest cities since 1981, compared with a net gain in jobs of 1.7 million elsewhere.
Other key findings are that:
- The worst-affected areas have been core districts of the major conurbations – especially Clydeside, Greater Manchester and Merseyside, where the loss of manufacturing jobs among men has been especially severe.
- Employment growth, particularly in jobs taken by women, has been most marked in ‘free-standing’ cities – notably Edinburgh and Cardiff.
- Service industries have grown more slowly in cities than elsewhere, including sectors that make up the emerging ‘knowledge’ economy and consumer services.
- Better-performing cities are those that have invested in their physical fabric and infrastructure, and made land and premises available for inward investors and expanding businesses.
Using the most recent data available to compare employment trends with peaks and troughs in the economic cycle, the study finds a steady and continuing divergence between the major cities and the rest of the country. Between 1981 and 1996, there was a net loss of 12 per cent in the core areas of major conurbations; although employment in their outer areas remained more stable. Another striking contrast over the same period was between the net loss of 212,000 jobs in Greater London and the net growth of 556,000 jobs in the rest of the South East.
Ivan Turok and Nicola Edge, the report’s co-authors, suggest that a period of overall employment expansion between 1993 and 1996 may have prompted speculation about revival in the great cities. But they argue that the improvement was a product of an upswing in the economic cycle rather than a reversal of previous trends. The cities’ share of national employment actually fell.
Professor Turok said: “A sizeable ‘jobs gap’ continues to exist between the number of people who want work in our major cities and the number of jobs that are available. National economic growth cannot bridge that gap on its own. Nor can the Government’s New Deal and other policies that relate entirely to supply-side measures such as training, employment advice, stronger work incentives and more childcare.
“The urban jobs gap poses a threat to economic growth and social cohesion as well as the functioning of the labour market which policy makers would be foolish to ignore. There is a pressing need for economic, social and urban regeneration policies that give greater emphasis to expanding labour demand in the cities.”
Professor Duncan Maclennan, also of the University of Glasgow’s Department of Urban Studies and the Joseph Rowntree Foundation’s special adviser on urban regeneration said: “Over the last six years employment in UK cities has recovered. Although this may be a cyclical phenomenon reflecting the general upswing in the economy, there are cities that have been able to do somewhat better by putting particular emphasis on economic development. Cities have a strong future role to play in the economy, but it is clear from this report that they need to organise themselves to compete more effectively than in the past”.
