A Guide to Unemployment Reduction Measures

324 Pages·1987·22.978 MB·English

by  Edwin Whiting (auth.)

A GUIDE TO UNEMPLOYMENT REDUCTION
MEASURES
Also by Edwin Whiting
HOW TO GET YOUR EMPLOYMENT COSTS RIGHT
A GUIDE TO BUSINESS PERFORMANCE MEASUREMENTS
A Guide to
Unemployment
Reduction Measures
Edwin Whiting
Honorary Fellow, Manchester Business School
M
MACMILLAN
PRESS
© Edwin Whiting 1987
Softcoverreprint ofthe hardcover1st edition 1987 978-0-333-41295-4
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First published 1987
Published by
THE MACMILLAN PRESS LT D
Houndmills, Basingstoke, Hampshire RG21 2XS
and London
Companies and representatives
throughout the world
British Library Cataloguing in Publication Data
Whiting, Edwin
A guide to unemployment reduction measures.
I. Unemployment 2. Full employment policies
I. Title
331.13'77 HD707.5
ISBN 978-1-349-08623-8 ISBN 978-1-349-08621-4 (eBook)
DOI 10.1007/978-1-349-08621-4
To James and Janet and
Sophie and Nick
Contents
Preface Xl
Supplement: updating schemes and cost data to 1986/87 xm
PART 1 OBJECTIVES AND SCOPE 1
1 Introducing the concepts 3
Basic approach. Cost and benefit. Structural
unemployment. Summary.
2 Explaining the framework 8
Choice of measures. Reviewing the measures. Background
(1). Variations on the theme (2). Effect on employment (3).
Effect on productivity (4). Costs (5). Long-term aspects (6).
Problems of implementation (7). Social and political
implications (8). Conclusion. Summary.
3 Defining unemployment 16
Work, jobs and employment. Types of unemployment.
Registers and surveys. Benefit recipients. Summary.
4 Counting the costs 22
Importance of cost. Use of net cost per person. Calculation
of cost per person. Productivity and investment. Social
costs. Summary. Analysis of benefits paid to unemployed.
Exchequer gains from employment.
PART II APPRAISAL OF THE MEASURES 35
The sections of each chapter in Part II are standard throughout
and are numbered after each chapter number as follows:
.1 Background
.2 Variations on the theme
.3 Effect on employment
.4 Effect on productivity
.5 Costs
.6 Long-term aspects
.7 Problems of implementation
vii
viii Contents
.8 Social and political implications
.9 Summary
.10 What the author might do
Group A Reducing the numbers of people needing paid work
5 Retiring earlier 37
6 Stopping work after retirement 57
7 Substituting directly retired by unemployed 68
8 Partially retiring 76
9 Expanding education 83
10 Providing more training 100
Group B Sharing the work
11 Shortening the working week 114
12 Shortening the working year 123
13 Reducing overtime 130
14 Fostering part-time employment 147
15 Reorganising working patterns 159
Group C Matching people with jobs
16 Bringing jobs to depressed areas 167
17 Helping people in depressed areas to take jobs elsewhere 182
18 Improving the job finding process 194
19 Building the confidence of the unemployed 201
Group D Using marginal subsidies
20 Reducing wage cost by recruitment subsidy 213
Contents ix
21 Awarding grants for increases in employment 224
Group E Organising business for employment
22 Averting closure and redundancy 234
23 Promoting and assisting new businesses 245
Group F Providing work in the community and public sector
24 Finding work for the long-term unemployed 265
25 Employing people directly in jobs in the public sector 278
PART III COMPARISONS AND CONCLUSIONS 285
26 Summarising and comparing the various measures 287
General summary of measures. High yield schemes.
Measures saving money for the Exchequer. Perils of
numbers. Summary.
27 Reviewing major issues 297
Introduction. Compulsion. Education and training.
Discrimination by area. Public sector image. Headcounts.
Types of unemployment. Social costs. Research and
statistics. The informal economy. Conclusion. Summary.
Abbreviations 306
Index 307
Preface
Somehow unemployment ought to be reduced. In Britain it has been at
almost unbelievable levels for over ten years. Is it beyond the wit of
man to find some solution after all this time?
Many economists complain that their solutions have not been tried and
continue to press for macroeconomic measures such as increasing
Government spending or reducing taxation. But many others are
against such moves and there is a growing consensus that 'little can be
done by macroeconomic policy to reduce unemployment' (to quote the
OECD in January 1986).
Ever since 1976 I have been interested in the unemployment problem
and particularly in the true cost of unemployment. At Manchester
Business School, where I was teaching management accounting and
control, I felt that somehow the same kind of techniques could be used
to sort out the various proposals for reducing unemployment.
I envisaged each measure in the same way as a business project. Could
it not be treated as a capital investment, using a cash flow projection
and discounting it over the probable life of the measure? I soon found
that such an idea would not work. But I did find that there was data
enough on some measures to produce a comprehensive statement of
costs and revenues in the same way as would be done for a business
decision, and not many of the measures seemed to have large invest
ment components.
The cost per person to the Government of each measure struck me as
the key ratio on which decisions should be made. When I retired from
the Business School I was more free to pursue this further. I identified
about twenty to thirty measures or schemes and tried to work out a cost
per person for each one.
Lack of data was my main problem. I was not in a position to do my
own new research, but I did find a collection of other people's research
that proved very useful, often from unexpected sources. The rest of the
data came from my own estimates or guesstimates, which I admit are
far from adequate, but better than nothing. It may be that readers have
xi