"There is a need for financial reform along ethical lines that would produce in its turn an economic reform to benefit everyone"

An interesting contribution from Pope Francis here about the origins of our financial and economic crisis and the need for a change of heart.

Unemployment in April 2013

Introduction
Here is a round-up of the unemployment figures for Worcestershire drawn from the monthly County Economic Summary.  The figures are claimant count (i.e. those claiming Jobseekers Allowance) rather than the more widely used Labour Market Statistics.  In common with the national Jobseekers Allowance figures there was a fall in the number of claimants, though nationally and regionally the Labour Market figures showed a rise and seem to suggest an end to the period of falling unemployment.  It remains to be seen what effect this will have on Worcestershire, which overall has been fairly resilient on job losses compared to some parts of the region and country.

Unemployment

The claimant count in Worcestershire in April 2013 fell by 419 to 10,018, which is 748 lower than April 2012.  At 2.9% of the 16-64 population this remains below the regional and national levels.  The districts with the highest proportion of claimants were Redditch and Wyre forest at 3.7%, and the greatest decrease in absolute terms (between April 2012 and April 2013) was in Wychavon with a fall of 253 claimants.

The urban centre with the highest proportion of claimants is Kidderminster with 4.3% and the lowest is Wythall at 1.6%. In Worcestershire's urban areas the proportion of claimants is 0.4 percentage points higher than the county as a whole at 3.3%.

Long Term Unemployment

The proportion of claimants receiving Jobseekers Allowance between 6 and 12 months has fallen by 1.3 percentage points to 19.2% since April 2012 whilst those on this benefit for more than 12 months has increased by 2.1 percentage points over the same period to 22.6% of all claimants. The number of people claiming for 6-12 months has declined due to them either finding employment or falling into the category of claiming for more than 12 months.

Unemployment by Gender

At the beginning of the recession the male claimant count rate increased at a faster pace than the female rate.  Since peaking in 2009-2010 at around 5.5% the male rate began to fall, although not back to pre-recession levels (at around 4%), whilst the female rate has remained at the higher level (around 2%).

Youth Unemployment – Claimants Aged 18-24

In April 2013 the number of claimants aged 18-24 was 2,765, which is a decrease of 200 compared to March 2013 and 380 fewer compared to April 2012.  The greatest decrease in absolute terms (between April 2012 and April 2013) was in Redditch with a fall of 120 claimants.

The proportion of claimants aged 18-24 is 6.7%, which is 0.1 percentage points higher than the England average.  The district with the highest proportion of claimants aged 18-24 was Wyre Forest (8.0%).

Comments

In a briefing from the Chartered Institute of Personnel and Development, Gerwyn Davies, the CIPD’s labour market adviser, said the [unemployment] figures confirmed that the UK job market was still a “battleground”. 

“Private sector firms are not taking on enough staff to offset the contraction in the number of self-employed and public sector workers and the continuing expansion of the UK workforce,” he explained.

“The labour market remains a battleground for jobseekers,” he continued. “With five unemployed people for every vacancy registered with JobCentre Plus, there are twice as many unemployed people chasing vacancies than before the recession.

“Although youth unemployment has fallen slightly – the one bright spot in yesterday’s numbers – CIPD figures still show more than 40 applicants typically chasing every low-skilled job.”

A study by the TUC published the day before the unemployment figures came out showed people aged 18 to 24 are far less likely to be in work today than before the recent recession. The report looked at adults’ likelihood of being in work over the past five years.

It found that under-25s had seen the sharpest fall in job prospects of all age groups, and were 10 per cent less likely to currently be in work than they were on the eve of the recession in February 2008. Some 395,000 more jobs were needed before the youth unemployment rate returned to its 2008 level, said the analysis.

There was also a job shortfall amongst “prime age” workers aged 25 to 49, the data found. The employment rate among 25- to 34-year-olds had fallen by 2.4 per cent – creating a job shortfall of 164,000 – while 71,000 jobs had been lost in the 35 to 49 age category.

But the news for older workers was more positive, according to the figures. The likelihood of a 50- to 64-year-old being in work was 2.2 per cent higher today than it was in 2008 – although this was partly attributable to a gradual rise in the state pension age for women.

Archbishop's warning over economic 'depression'

You may have seen a report of this on the BBC 1 News.  I think it underlines the need for a better banking (and economic) system in ethical as well as financial terms.

Archbishop's warning over economic 'depression' and Robert Peston's reflection on what was said: Should bishops run the banks?

Unemployment Figures for March 2013

Introduction

Here is this month’s round-up of unemployment data for Worcestershire (from the April 2013 County Economic Summary).  Further information about national figures can be found here.  As always, the county figures are for claimant count, which is also in the national figures but is lower than the headline figure based on availability for work.

Unemployment

The claimant count in Worcestershire in March 2013 decreased by 248 to 10,437, 927 lower than in March 2012.  This is 3.0% of the 16-64 population, which remains below the regional (4.7%) and national (UK also 4.7%) levels. 

The district with the highest proportion of claimants was Redditch (3.9%) whilst the greatest decrease in absolute terms (between March 2012 and March 2013) took place in Worcester with a fall of 258 claimants.  The urban centre with the highest proportion of claimants is Kidderminster with 4.4% and the lowest is Wythall at 1.8%.  In Worcestershire's urban areas the proportion of claimants is 3.5%, which is 0.5% higher than the county as a whole.

Long Term Unemployment

Those claiming Jobseekers Allowance between 6 and 12 months have decreased by 3.5 to 17.1% since March 2012 whilst those claiming for more than 12 months have increased by 4.1% over the same period to 22.2% of all claimants.  The number of people claiming for 6-12 months has declined due to them either finding employment or falling into the category of claiming for more than 12 months.

Unemployment by Occupation

The claimant count is not broken down by industry, but using data by occupation does give an indirect indication of the industries involved.  The greatest number of people are seeking employment within Elementary occupations, with 3,100 people (29.7%) seeking this occupation in March 2013.  This has shown no change in comparison to February 2013 though it has decreased by 100 claimants when compared with March 2012.

Claimants Leaving the Unemployment Count

2,090 people left the claimant count in March 2013, of those people 48.6% have found employment and a further 39.5% are either 'not known' or have 'failed to sign'; it is possible that some of these people have also found employment.

Youth Unemployment – Claimants Aged 18-24

In March 2013 the number of claimants aged 18-24 was 2,965, a decrease of 65 compared to February 2013 and 485 fewer than March 2012.  The proportion of claimants aged 18-24 is 7.2%, this is 0.3 percentage points higher than the England average.  The district with the highest proportion of claimants aged 18-24 was Wyre Forest (8.7%)and the greatest decrease in absolute terms (between March 2012 and March 2013) took place in Redditch with a fall of 140 claimants.

Business Confidence
The results of the Q1 2013 British Chamber of Commerce Economic Survey suggest welcome progress, however the improvements are modest.  The national confidence balances are much stronger than in the 2008-09 recession, but are below their
pre-recession levels in 2007.  Manufacturers' profitability confidence rose 3 points to 33% and turnover confidence increased by 3 points to 44%.  The service sector turnover confidence rose 2 points to 40% whilst profitability confidence remained steady at 22%.

Comments

Some comments on the national picture from a Chartered Institute of Personnel and Development briefing:

Neil Carberry, CBI director for employment and skills, commented: “The rise in unemployment is disappointing and reflects a lacklustre economy over recent months.

“However, the increase in the headline rate is due to more people looking for work, who weren’t previously doing so, rather than simple job losses. Numbers claiming unemployment benefits are still falling.

“The flat employment growth is down to a fall in part-time jobs. Full-time posts increased again this month, continuing the positive trend of recent months.”

 

Mark Beatson, chief economist at the CIPD, said: “This month’s figures have seen the recent period of sustained employment growth come to an end. The number of people in employment is very marginally down on the previous three month period, with full-time employment increasing but part-time employment falling. At the same time, with the population increasing and economic inactivity continuing to fall – which in itself is not a bad thing – this has led to a quite substantial increase in unemployment, up by 70,000 on the previous three month period.

“The question is whether this is a short term blip or whether a lack of demand means that the economy will struggle to create more jobs.”

Recruitment intentions, forecast in the CIPD’s Labour Market Outlook, are still positive, Beatson added, while redundancy figures have not changed significantly.

Therefore it would be “unwise to read too much into a single month’s figures” he said.

 

Kevin Green, chief executive of the Recruitment and Employment Confederation, said: “Although there has been an increase in a number of unemployed this month, all the indications and feedback we receive from recruiters show that businesses intend to hire more people this year. We expect to see slow growth in the jobs market over the coming months.”

‘The City and the Common Good: What kind of City do we want?’ - ‘Good People’

I recently went to an event at St. Paul’s Cathedral, which was the first of a series with the overall title, ‘The City and the Common Good: What kind of City do we want?’  This first event was about ‘Good People’; the others will be on ‘Good Money’ and ‘Good Banks’.  The Keynote speaker last week was Vincent Nichols, Archbishop of Westminster and formerly of Birmingham.  Also speaking were Peter Selby, Helena Kennedy and Tracey McDermott (Director of Enforcement and Financial Crime at the new Financial Conduct Authority).

Vincent Nichols quoted TS Eliot: "What life have you if you have not life together?  There is no life that is not in community..." but went on to say that you need to cultivate community and, reflecting Catholic Social Teaching, that in the recognition of both community and the holding of personal property the well-being of each is dependent on the other.  The danger with the City (of London) is that that a disconnection has grown up both of people in the City with each other and with those outside.

But, he argued, good people yearn for love, relationships, friendship and to make a difference.  This lies deep within us in sharing a common humanity and life of relationships, and to learn to live well is to learn the virtues – we act well because it has become habit for us.  Becoming people of virtue starts within the family but should also be inherent in our schools and universities (and in this case business schools); the institutions of commerce should nurture this with a clear sense of purpose focused on the wider common good.

Profit should be made by delivering a purpose that leads to human well-being (not as an end in itself), for unless you know the purpose you will never get the ethics right.  Business should be able to demonstrate how it is making the world a better place; so whilst employees need technical skills they must also be schooled in character and virtue.

His view that there are limits to law and regulation – they are a lazy proxy for morality – drew comment from the representative of the FCA who, whilst arguing they were necessary but not sufficient, said they needed to reflect underlying norms, though sadly in financial services this connection was not always made, so it is important to make society’s morals clear.  Vincent Nichols was, however, arguing for a fundamental transformation of purpose so that the banks and big business were at the service of society and he felt that (as the economist John Kay has said) it will take another financial crisis before the City wakes up to the scale of reform that is really needed.

He concluded by saying all this depends on the quality of leadership to draw out the good in people by their own actions: do they appeal to fear or greed, or to selflessness and a desire to serve the wider good?

Helena Kennedy in responding referred to Adam Smith’s ‘Theory of Moral Sentiments’ saying that markets are only good if there is good law and high ethical standards and that this has been squeezed out in many parts of our society because we have made money a measure of value and how we measure people.  She feared that there was still a sense in the City of waiting to get back to business as usual.  Peter Selby said that exhortation is not enough; there are issues of power here and an imbalance of effect.  And whilst schools of virtue are important we also need schools of resistance, to say ‘enough is enough’.

In response, Vincent Nichols referred to the virtues of courage and judgement and spoke again about the power of leadership for service, and in the discussion about the purpose of business, said that corporate social responsibility is about more than ‘reputational laundering’.  It should lie at the core of the business that should be about the quality of relationships with employees and their families, growth of employment, the quality of goods and services, the tax that is paid, as well as shareholder return.  In short, there needs to be a broader view of success.  But for this to be so, markets need a more personal connection to work properly, because business doesn’t operate in a vacuum, it depends on its context and on its connection with the society within which it operates.  Wealth creation is, however, good if it is for the right purpose.

Unsurprisingly, many in the audience were sympathetic to the tenor of the speakers' contributions but there seemed to be few practical suggestions about how they should be achieved, apart from the long-term of education from the Archbishop and Peter Selby's call for resistance.  A couple of questions made the point of the significant contribution of financial services to the economy and to tax paid, asking if we could afford to see this diminish.

Implied in Vincent Nichols views is that financial services should serve the needs of business and the economy rather than making money from money (so-called casino banking), which is a significant part of the City and which contributes to its disproportionate size relative to the economy as a whole.  Businesses run well along the lines suggested by the archbishop should make good profits in a longer-term and more sustainable way.  One has to ask if the over concentration of  resources in the London and the South East is not damaging to the rest of the country and its economic and social well-being.  Stephanie Flanders (the BBC's Economics Editor), who chaired the discussion, wrote a piece recently asking 'Should Britain let go of London?' showing how the gap is widening between London and the rest of the country and how economic and other policies are skewed by London-centrism.

In this week of Baroness Thatcher's funeral (which takes place in the same space as this debate that I am reporting upon) it has been pointed out by a number of commentators that the north-south divide which was already happening before she came to power has become more acute as a result of government policies (of all parties) over the past 30 years.  Mrs Thatcher's government was responsible for the 'Big Bang' de-regulating much of the City from its previously restrictive ways and contributing to its exponential growth.  But no one has been able to halt, let alone reverse the decline of manufacturing or find an effective policy to truly revive affected regional economies, and the present governments' attempts at rebalancing the economy towards manufacturing and exports have been ineffective.

To truly succeed may mean grasping some very difficult nettles including the deeply entrenched economic and political power of the City.  To get some idea of this see: 'Who Runs Britain?' by Robert Peston (2008), London, Hodder & Stoughton, which I have mentioned previously on a number of occasions.      

Unemployment February 2013 and How Should we Grow

I've summarised the lastest unemployment figures for the County, but also offer a warning about complacency and some thoughts on what kind of county we might want to be.

Unemployment

The claimant count in Worcestershire in February 2013 increased by 326 to 10,685 (3.1%), 1,134 lower than the number of claimants in February 2012. This is the lowest level since December 2008, however as expected the number has risen due to the decrease in seasonal work.

The district with the highest proportion of claimants aged 16-64 was Redditch (3.9%), whilst the greatest decrease in absolute terms (between February 2012 and February 2013) was in Worcester with a fall of 322 claimants.  The urban centre with the highest proportion of claimants is Kidderminster with 4.5% and the lowest is Wythall at 1.9%.  In Worcestershire's urban areas the proportion of claimants is 3.5%, which is 0.4 % higher than the county as a whole.

Long Term Unemployment

The proportion of claimants who have been receiving JSA benefit between 6 and 12 months has decreased by 5.1 % to 15.1% since February 2012. The proportion in receipt of JSA benefit for more than 12 months has increased by 5.3 % over the same period to 21.6% of all claimants. The number of people claiming for 6-12 months has declined due to them either finding employment or falling into the category of claiming for more than 12 months.

Claimants Leaving the Unemployment Count

2,600 people left the claimant count in February 2013, of those people 42.8% have found employment, a further 43.4% are either 'not known' or have 'failed to sign'; it is possible that some of these people have also found work.

Youth Unemployment – Claimants Aged 18-24

In February 2013 the number of claimants aged 18-24 was 3,030, an increase of 150 claimants compared to January 2013 but 570 fewer than in February 2012. The proportion of claimants aged 18-24 is 7.3%, 0.2 % higher than the England average. The district with the highest proportion of claimants aged 18-24 was Wyre Forest (9.0%). The greatest decrease in absolute terms (between February 2012 and February 2013) took place in Redditch with a fall of 195 claimants.  After a significant rise, the Worcestershire 18-24 claimant rate reached a peak in August 2009. It has since fallen with some seasonal effects related to Christmas and summer employment; however it is yet to reach pre-recession levels.

Some Comments

It has been consistently pointed out that Worcestershire’s unemployment figures are better proportionately that the West Midlands region (usually towards the bottom of the table of regions) and England or the UK. The exception is youth unemployment where we tend to be above the England proportion.  This hides some significant variations as the figures of the highest and lowest districts and more particularly urban centres shows.  Go to smaller areas and the differences are even more pronounced (for example, the area where I am associate minister has over 6% unemployment, whilst where I live two miles away is under 2%).

In overall terms Worcestershire’s situation may lead us to think that we’re not doing too badly and indeed there are signs that we are faring better than many in the recession.  But as Ahmed Goga, Worcestershire County Council’s Head of Economic Development and Strategic Planning, said at the Faith at Work in Worcestershire AGM this week, beneath the surface all isn’t quite as rosy as we would like to think.  This is shown in modest average incomes and gross value added, low levels of innovation in our industry and a failure to bring back young people who leave to go to university.  Whilst people with degree and equivalent qualifications are quite numerous, there is a high proportion with less than GSE standard education.  And there is a real problems for high tech firms in recruiting suitably skilled people – the right kind of engineering is where the demand is.

The thrust of Mr Goga’s argument is that whilst Worcestershire is a nice place to be, there is a danger of complacency which could lead to stagnation.  This is very much the tension at the middle of the debates in the genesis of the Next Generation Worcestershire programme: how to ensure economic prosperity whilst preserving those things that make the County a good place to live.

There is also a tension which was raised in the recent Worcester Diocesan Synod debate on the economy: how to balance necessary economic development alongside global environmental issues of pollution and resource depletion.

In this time when so much of the debate surrounding the economy and particularly the budget is about growth (almost at any price) it is important to hold onto a wider and longer perspective.  We may argue that love, compassion and justice among the Kingdom priorities that the Diocese of Worcester has embraced require a redistribution of the increasingly unequal shares of income and wealth that our economic system is giving to people.  However, whilst we must do what is possible within the County we also must be aware that in the system as it is we are (according to Mr Goga) in competition with the likes of Oxfordshire, Buckinghamshire and Northamptonshire, rather than the other parts of the West Midlands, and nobody may have told them about our difficulties with growth.  We must also be aware of the argument, also made in Next Generation Worcestershire, that prosperity is needed for the provision of those services we deem important to care for our increasingly ageing population.

The challenge, rather like that reported today of Lord Mandelson to the Labour leadership, is to work at a compelling alternative rather than repeat the critique.

Unemployment January 2013

Unemployment
Against the national trend that saw a decrease in unemployment in the UK between October and December 2012 of 14,000, taking the total down to 2.5m, and a reduction in the claimant count in January 2013 of 12,500 to 1.54m, the claimant count in Worcestershire increased by 505 to 10,359, or 3% of the 16-64 population.  This, though, is still 1,045 lower than the number of claimants in January 2012 and remains below regional and national levels.

The number of claimants in Worcestershire was at its lowest level since December 2008, however, as expected, the number has risen due to the decrease in seasonal work.  The greatest decrease in absolute terms (between January 2012 and January 2013) took place in Worcester with a fall of 348 claimants.  The district with the highest proportion of claimants aged 16-64 was Redditch (3.8%).  The urban centre with the highest proportion of claimants aged 16-64 is Kidderminster with 4.4% and the lowest is Wythall at 1.9%. In Worcestershire's urban areas the proportion of claimants aged 16-64 is 3.4%, which is 0.4% higher than the county as a whole.

Long Term Unemployment

The proportion of claimants receiving Job Seeker’s Allowance between 6 and 12 months has decreased by 4.8% to 15.1% since January 2012 but those claiming for more than 12 months have increased by 5.5 % over the same period to 21.8% of all claimants. The number of people claiming for 6-12 months has declined due to them either finding employment or falling into the category of claiming for more than 12 months.

Youth Unemployment – Claimants Aged 18-24

In January 2013 the number of claimants aged 18-24 was 2,880, an increase of 190 compared to December 2012 and 560 fewer compared to January 2012.  The proportion of claimants aged 18-24 is 7.0%, 0.2% higher than the England average.  The district with the highest proportion of claimants aged 18-24 was Wyre Forest (8.5%), whilst the greatest decrease in absolute terms (between January 2012 and January 2013) took place in Redditch with a fall of 180 claimants.  After a significant rise, the Worcestershire 18-24 claimant rate reached a peak in August 2009.  It has since fallen with some seasonal effects related to Christmas and summer employment; however, it is yet to reach pre-recession levels.

Comments

The Chartered Institute of Personnel and Development (the professional body for HR) said: ‘In line with the results of recent CIPD surveys, the UK jobs market strengthened significantly in the final quarter of 2012. However, the medium-term outlook remains less certain, as the public sector seems likely to continue to shed jobs and there are questions over the private sector’s ability to sustain this momentum unless economic growth resumes soon.’

Meanwhile, separate figures revealed that one in seven employees have been made redundant during the recession.  John Philpott, director of the Jobs Economist consultancy, said that around 3.5 million people had lost their jobs since the beginning of 2008. Of those, 63 per cent were men and 37 per cent were women.

‘For both men and women 2009 was the peak year for redundancies,’ Philpott added, ‘although in terms of share of total redundancies 2011 and 2012 have been the two worst years for women, reflecting public sector job cuts.’  (From CIPD members’ site)

Outlook

 Supporting the view above, thirty-five per cent of UK organisations are planning redundancies or considering job cuts this year, according to new research.  With the exception of Greece, this was a higher percentage than any other country in Europe, found the study by HR consultancy Aon Hewitt.  Of the UK organisations contemplating a reduction in headcount, 62 per cent were in service-based industries, the survey revealed.

Commenting on the survey results, Andrew Macleod, leader of Aon Hewitt’s pay research practice in the UK, said: 'The high potential figure for redundancies may stem in part from UK organisations feeling that they continually have to adapt and reorganise to remain competitive in what is still a volatile economic environment.' (From CIPD members’ site)