Is 50,000 job losses something to be scared of?

If I said to you that 50,000 jobs were being lost every week in the UK I think you’d sit up and take notice – especially in a week when jobs have gone at another Nottingham industrial giant, Imperial Tobacco.
Well, 50,000 jobs ARE being lost every week in the UK. Yet it’s not something we should necessarily be scared of.
How come? For starters, while 50,000 jobs have been disappearing every week the UK economy has been creating around 53,000 new jobs at the same time.
In other words, these job movements are all part of what economists call the ‘natural churn’ in the economy. And when an economy grows, job creation will normally outnumber job destruction (where the balance lies now is a moot point).
While we shouldn’t be scared of jobs coming and going, the pattern behind some of these movements is something we need to keep an eye on.
The reason why I’ve flagged it up is that in the same week Imperial Tobacco cut 2,400 jobs across Europe (210 of them in our city), some of the biggest names in global economic policy-making were at the University of Nottingham discussing the direction the jobs market is heading in.
There was Alan Blinder, who advised Bill Clinton about economic policy when he was US President. There were internationally-renowned academics from Harvard and Princeton – the US universities responsible for turning out some of the most prominent business and political leaders on the planet. There were senior economists from key Government departments in the UK, and representatives from hugely influential international organisations like the Organisation for Economic Cooperation and Development.
This heavyweight gathering all sounds a bit far removed from everyday life. And it’s fair to say the two-day event discussed economic trends that fly over the heads of most of us.
But one of the main discussions was about an issue that has already had an impact right here on the ground in Nottingham – the ‘offshoring’ of jobs. That’s exactly what’s happened to a lot of jobs disappearing from Capital One.
A couple of weeks ago I blogged about a report from the University of Nottingham that showed that the efficiencies UK companies gained by sending certain types of work abroad meant they’d ended up creating more jobs here than they’d sent overseas.
It was this subject that was at the heart of the conference in Nottingham on Friday and Saturday. Putting the UK’s 50,000 job-churn into perspective, Alan Blinder warned that off shoring could lead to the loss of more than 30 MILLION jobs in the USA.
That sounds seriously scary, but it will probably take place over 20 years or so. And to put it into perspective, the US jobs market is 150 million-strong.
Ultimately, this issue is not about tracking where today’s jobs are going. It’s about having the skills that mean tomorrow’s jobs come to you.
Chatting to Prof David Greenaway (who co-wrote the offshoring report), it’s clear that there are concerns among these economic experts that the UK’s approach to improving skills may be misfiring.
The Government has ploughed vast sums into an enormous range of skills initiatives, but without getting big results.
The reason, says Prof Greenaway, is that it places too much emphasis on people having qualifications rather than skills – pieces of paper rather than a specific ability to do something, in other words.
It has also focused very hard on what happens to people in schools and higher education. That’s important and necessary – but 75% of the people who will comprise the UK workforce in 2020 are ALREADY in employment.
So may be we need to place a much bigger emphasis on having the right kind of skills among the existing workforce than we have been doing.
If we do, the jobs might come to us.