A Treasury report estimates over the next five years 1.3million jobs will disappear, 500000-600000 in the public sector and 600000-700000 in the private sector. I think this is just the start of things to come as the economy of the future, even when we get growth, will be one at a much lower level of employment.
You just need to look around you, our local Sainsburys who used to employ lots of students has now replaced staff with self service checkouts, bars are running on smaller bar staff with longer queues to get served. Graduate scheme jobs are now at a super-premium and difficult to reach even for high achieving graduates, and the types of jobs that used to pick up the graduates that couldn’t get on graduate schemes are vanishing: administrative office jobs in the public sector which is now trying to run on skeleton admin staff in response to budget cuts, call centre jobs are being outsourced overseas, the ten-a-penny telesales and recruitment jobs that used to be everywhere are also contracting as people aren’t so keen on spending any more so it’s harder to sell anything.
I think a lot of sixth formers and students at university today haven’t picked up on how difficult the employment situation is going to get. The recession has taught business and the public sector that they need to be super-lean to survive, which means keeping a lid on the costs through smaller staffing levels with higher workloads. The experience of many people I know who have kept their jobs through the recession is that now working longer hours unpaid is pretty much expected - it has always been the case in the high paying graduate jobs but now that kind of ethos has come into the £15-20k jobs as well.
The other factor here is that we are in a global economy and having to compete with rapidly developing countries like China and India who have much lower costs of labour - we might scoff at the sweatshop culture over there and say that we would never accept that but their businesses are more competitive because of it and there is inevitably pressure on us to make the cost of labour cheaper. Even at the top end of the employment market (ie graduate type jobs) it is very much an employers’ market, companies get deluged with eager graduates from well off families who can support them, offering to do an internship for free to get ‘experience’. In the past this sort of arrangement used to be ‘a month or so’ but now you start getting people doing six months to a year for free and companies know they can get a supply of decent graduates working for them which means they can keep their number of employed staff lower. They can also be much tougher on the employed staff as they know that there are plenty keen to take their places if they don’t like it.
Overall I think when our economy returns to growth it will be at a much higher level of equilibrium unemployment. Advances in technology and a culture of working longer hours is allowing us to be more productive with fewer staffing costs which does benefit company owners as it helps increase profit margins. The downside to the economy is higher numbers of people claiming benefits but the government is already starting to take measures to reduce benefits so as long as benefit levels are reduced in line with the increased number of unemployed, the economy will still function.
The rule of “there are always jobs for top people” still applies, although even the top graduates will need to do more in the future (especially on accepting a period of unpaid work to earn their stripes) but I think a lot of students need to wake up to reality....joblessness isn’t just going to be for lazy dossers on council estates, it will become a reality for many graduates. I bet there will be a few from TSR who currently hold the opinion of ‘benefits should be withdrawn to force the lazy into work’ or ‘at least those being paid $2 a day in a sweatshop overseas have got a job, the alternative is them having nothing’ who will shift their outlook significantly when they enter a lengthy period of unemployment after they finish their education.
The era where you could graduate with a 2:1, work an office job for a bit before going on gap yah, then get on a well paid graduate scheme with good prospects, is coming rapidly to an end. Job searching and career building will become very very very tough.
