If you were an unemployed engineer in the Britain of the 1840s, you might have had to go tramping. The Steam Engine Makers’ Society, one of the country’s first national unions, paid jobless members a benefit if they “tramped” from one branch to another in search of work: “His supper, one pint of beer, one night’s lodging, his breakfast in the morning, and one penny for every mile he may have travelled since last relieved.” You would lose the benefit if you refused any work offered to you.
Britain’s unemployed people are no longer tramping around the country, but they are still subject to a benefit system that insists they apply for jobs and sanctions them when they do not follow the rules. Indeed, the UK’s “active labour market policy” seems to have played an important role in the jobs recovery since the financial crisis.
As in the US, unemployment in the UK has dropped sharply (it is now the lowest since 1975 at 4.4 per cent). But unlike the US, the UK has successfully prevented vast swaths of low-skilled people from drifting out of the labour market altogether. The inactivity rate — the share of working-age people who are neither employed nor unemployed (because they are not even looking for work) — is about 27 per cent in the US and the EU, but under 22 per cent in the UK.
Britain’s policymakers understandably laud this success. Yes, they say, not all new jobs are good quality. Some are badly paid. Some are low productivity. But any job is better than no job at all.
Yet what if that truism is not, in fact, true? This month, a study was published in the International Journal of Epidemiology by researchers from Manchester University who wanted to test it out. They followed a cohort of more than 1,000 people aged 35 to 75 who were unemployed in the recession of 2009-2010. Over the next few years they measured their health through questionnaires, blood tests and nurse health assessments.
The people who moved into poor quality work — low paid, low autonomy, high insecurity — had the highest levels of chronic stress, higher than the people who remained unemployed. People who moved into high quality work were the healthiest of all. In other words, unemployment is bad for you, but some jobs might actually be worse.
I met a charity worker once who argued the same thing — albeit in hushed tones because it felt faintly heretical to say. She worked with unemployed people who had moved into insecure jobs with unpredictable shifts. It wore them out, she said, financially and mentally. Jobs where your hours and income fluctuates can wreak havoc with benefits and childcare. They can leave you reliant on pay-as-you-go phones and electricity meters because you cannot risk monthly contracts.
Researchers at Cambridge university say about 15 per cent of UK workers have jobs with schedules that change frequently at the manager’s discretion. This could help explain why the UK has suffered a “lost decade” for worker productivity. You are unlikely to be working at full capacity if you are stressed and unwell. If you were told you must accept a job or be sanctioned, you might have ended up in work that did not best utilise your skills.
The economists Daron Acemoglu and Robert Shimer once argued that decent unemployment insurance boosted productivity by giving people the space and confidence to pursue riskier options — jobs that were harder to find but more productive. It also encouraged employers to create those jobs, they said.
None of this is to deny the UK’s success in sucking people into work. And as the jobs market tightens, people might be able to shuffle themselves into better jobs, or demand better conditions. But the hidden costs to the UK’s approach are becoming clearer. A “jobs miracle”, yes. But a strangely joyless one.
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