Dundee’s duality: The ratchet effect and super commuters

Lesley Brennan

22 June 2011

Travelling across the country, I meet people from all regions and backgrounds.

One topic that reoccurs is the increasing nervousness regarding future job security given the impact of government – UK and Scottish – spending cuts.

In Dundee, people are less optimistic as job market opportunities are less plentiful; unsurprisingly, with the 55% increase in Job Seekers Allowance claimants since November 2007 (Nomis, 2011).

Furthermore, the short-run prospects do not look any brighter either with three of the city’s six largest employers – the City Council, NHS Tayside and University of Dundee – facing direct and continuing reductions to their budgets due to cuts in government spending.

In May, Dundee University announced another 130 job losses.

Last year, NHS Tayside stated 500 fulltime equivalent jobs were to be lost in order to meet its budget, and DC Thomson closed its bookbinding and printing operation, which brought to an end another 350 jobs.

Moreover, other organisations will be affected indirectly.

Job seekers, therefore, are plentiful; officially, there are 6.4 unemployed people to every vacancy (Dundee Economic Profile May 2011, p6).

It is important to remember that this figure only gives a partial glimpse of the volume of people seeking work as some people will have had to reduce their work hours – so, although they are employed, they may be underemployed – others may be working below their skill level and some will have simply given up looking.

Employers, however, have their pick of applicants.

Moreover, around 15% of the working age population in Dundee are not working but wish to work (NOMIS, 2011).

In trying to understand that figure, it is important to recognise the proportion of Dundee’s residents who have no qualifications is 14% (NOMIS, 2011) and the collapse of Dundee’s manufacturing base over the last three decades.

Dundee’s worklessness problem needs to be addressed.

Policy makers need to heed the warnings from the USA where economists are describing a ratchet effect among the least qualified of the community (The Economist, 28 Apr 2011).

This effect describes the concerning trend where the proportion of low or unqualified workers employed falls during a recession and this lost ground is not regained when the economy recovers.

Thus, over time, more and more people in this group in Dundee could remain unemployed if effective interventions are not implemented.

Another consequence of Dundee’s weak labour market relates to those workers who face redundancy or have been made redundant.

Facing difficulties in securing employment locally, especially home owners who cannot afford any period of unemployment, some members of this group are seeking employment outwith the local area and deciding to apply for posts in the south east of England.

However, with housing costs so much higher there, many families are deciding not to relocate.
This new group of super commuters include professional, skilled and semi-skilled workers such as accountants, electricians, shop fitters, bus drivers, and teachers.

Many of these super commuters hope the local economy will pick up so that they can find a job closer to home.

Although, super commuter households may face difficulties, they do not face the levels of hopelessness experienced by the long term unemployed, who are the real losers of the recession and the governments’ cuts.

So what can we do?

*Tap into and exploit our local networks by working closely with Dundee’s two universities and its further education college to develop and implement cost-effective systems for raising educational attainment for our most disadvantaged members of our community.

*Create an environment for more local entrepreneurs. An economy built on hundreds of small and medium size businesses creates a more sustainable economy. A local entrepreneur set-up and runs the personal development company Insights. This company runs its international operations from the city.

*Attract more head quarters of national and international businesses. Dundee is home already to lots of vibrate employers such as Tesco Customer Service which employs 850 people in its head office in the city.

*Create opportunities for the long term unemployed to gain real work experience and support them back into work.

Policy makers in Dundee need to ensure a sustainable and equitable economy and continue to have the vision that championed the bold Waterfront project, which attracted the exciting V&A museum.

Confidence is already to beginning to build with respect to Dundee’s future as illustrated with Malmaison’s plans to rejuvenate the Tay Hotel.

This success and confidence must be translated into real jobs for all especially the long term unemployed.

Links :

NOMIS 2011, Dundee data >>>

Dundee Economic Profile >>>
 

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