Worklessness is driven by decayed job markets, not the people out of work

20th May 2013

Worklessness in "welfare ghettos" is caused by decayed job markets, not by people's attitudes, says Chris Goulden.

The main driver of worklessness in "welfare ghettos" is decayed job markets, not the attitudes of the people, says Chris Goulden, in response to a press release out today.

Statistics brought together by the Centre for Social Justice in their press release today show that in the UK there are 6.8m people living in homes where no-one has a job. There are major concentrations of worklessness in some areas of Wales and Birmingham, for example. This scale and the inequality are clearly matters of deep concern.

But the way these numbers are interpreted in the report is less accurate. First, the job market is more dynamic than these point-in-time figures imply:

Not all of the unemployed people in these ‘ghettos’ will have been out of work continuously. Many may have moved in and out of insecure, poor-quality jobs several times.

It’s also important to consider that the job market remained in decline in many areas of the UK before and throughout the recession. About 5% of neighbourhoods were never out of the top 10% in terms of JSA claims, whether in times of recession (1985, 1993, 2009) or growth (1990, 2005)So, it’s not the case that the pre-recession boom times hit every area of the country.

The implication of the idea of 'welfare ghettos' is that the main driver of unemployment is a 'culture of worklessness' where 'three generations have never worked'. This idea was debunked in JRF research that looked at the statistics behind these claims and tried (and failed) to find such families:

  • Around 15,000 households contain two or more generations of a family where both have never worked (see chart). Nearly all are headed by lone parents and in most the younger adult has only recently left education. Statistics on three-generational worklessness are not reliable but logically must be a fraction of this figure.
  • Even among families where an older parent has been out of work long-term, they retain and impart a strong work ethic to their children.

These figures highlight an extremely important problem but we need a more nuanced and evidenced understanding of the picture and the reasons. The main drivers of concentrations of worklessness are decayed job markets, not the attitudes of the people living there.

Click for a large version of the infographic: