Fri. Jan 21st, 2022

The pace of change in the UK labor market has slowed to its lowest level in decades and, even the disruption of the pandemic, was far from the upheaval of the 1980s, according to research by the Resolution Foundation and the London School of Economics.

The think tank said its findings, published Thursday, run counter to general perceptions that changes in working life are accelerating, with robots that quickly replace humans and gig economy work to replace factory work.

“These claims are very widespread. The reality is that the pace of change has slowed down, not accelerated, ”said Nye Cominetti, senior economist at the Resolution Foundation.

The UK has seen a major long-term shift in employment away from manufacturing – whose workforce fell by more than 5 million between 1970 and 2021 – and to professional services, health and education, as well as lower-paid sectors such as hospitality and administration.

This change was not all brought about by cruel retrenchments of middle-aged workers: much of the decline in manufacturing service was due to a more organic process of older workers leaving the workforce altogether, while young people joined other sectors, the report.

But the rate at which jobs in various sectors have grown and shrunk has slowed dramatically, reaching the lowest level in a century during the past decade. Even in 2021, with all the disruptions due to the pandemic, changes in the structure of the labor market represented only 7 percent of total employment, about a third of the peak reached in the late 1980s, the researchers found .

The Resolution Foundation said this relative stability was a “mixed blessing for workers” as it reduced the risk of people losing their jobs and being forced to downgrade to a worse one – but it also meant fewer opportunities to to a new job that offers better pay and prospects.

The proportion of workers who lost their jobs in each three-month period halved between 1991 and 2019. But the proportion of workers who choose to change jobs in each quarter has also fallen sharply, from 3.2 percent in 2000 to 2.4 percent in 2019 – a drop of 25 percent. Meanwhile, the share of workers who chose to move to a job in a new sector fell by 35 percent during the same period.

This is possibly a disadvantage, because over a period of 50 years, the salary growth for workers who moved jobs was on average 4 percentage points higher than for those who chose to stay.

However, the report warned that the pace of change in the labor market is likely to increase over the next decade as the combination of Covid-19, Brexit and the transition to net zero reforms the economy. The authors add that policymakers should try to facilitate the transition as far as possible by sending young people to careers in growing sectors, rather than “trying to hasten the retirement of older workers” in 1980s style.

“Workers need to make the most of this change with wage-enhancing work shifts,” Cominetti said, adding: “However, many workers will also lose, and they will need to be better protected than they were during previous periods of major economic change.”

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