MANPOWER POLICY AND THE STRUCTURE OF UNEMPLOYMENT IN BRITAIN*
| DOI | http://doi.org/10.1111/j.1467-9485.1969.tb00031.x |
| Published date | 01 June 1969 |
| Date | 01 June 1969 |
| Author | Paul Burrows |
MANPOWER POLICY
AND
THE STRUCTURE OF
UNEMPLOYMENT IN BRITAIN*
PAUL BURROWS
I. INTRODUCTION
IN
an economy experiencing a generally high level of employment,
unemployment becomes a social and economic problem
if
it develops
certain characteristics which conflict with
the
general objectives of
social and economic policy.
In
an attempt to clarify the nature of the
unemployment problem in Britain,
this
article considers some char-
acteristics
of
unemployment which amount
to
social and economic
problems, the extent to which British unemployment displays these
characteristics, and policy measures which may help to eliminate them.
11.
OBJECTIVES
The central objective of manpower policy against unemployment
is the reduction of unemployment to a level compatible with the
achievement of other objectives such as restraining inflation. But the
simplicity of this statement obscures the complexity of the problem.
Society may not be indifferent between two structures of unemploy-
ment with the same national unemployment rate. For example,
2
per
cent. unemployment with a mean unemployment duration of
10
weeks would be preferred to
2
per cent. unemployment with a mean
duration of
26
weeks. It is particularly at
low
national unemployment
levels that problems
of
structure become the concern of public policy.
The solution
of
probIems
of
structure may
be
regarded as the
sub-objectives of manpower policy against unemployment. Numerous
sub-objectives are possible but two will be used here as a framework
for analysing unemployment in Britain:-
1.
A
reduction in the mean duration of unemployment with emphasis
on
the proportion
of
the unemployed experiencing spells of over
26
weeks (long-term unemployed).
2.
The reduction of the concentration
of
unemployment in particular
regions and industries.
The acceptance of these sub-objectives implies that the con-
sequences of the free operation of the labour market are undesirable.
*
The author thanks Professor
A.
T.
Peacock and
K.
Hartley
for
comments
on a draft
of
this article, and Dr.
M.
Hauser for numerous discussions of
manpower policy and related topics.
68
MANPOWER
POLICY
AND
STRUCTURE
OF
UNEMPLOYMENT
69
Long-term unemployment requires severe adjustment of living habits,
including reduced consumption and dis-saving, quite apart from the
psychological effects of prolonged idleness. And for a variety of
reasons, such as
a
desire for regional balance in income growth and
inter-region equity in the success of manpower policy, inter-regional
and perhaps inter-industry differences in unemployment rates may be
unacceptable to society.
Duration
of
Unemployment
(Weeks)
111.
THE STRUCTURE
OF
BRITISH UNEMPLOYMENT
The total number of registered unemployed
in
Britain in the period
1956-1966 has ranged between
222,577
(or
1
per cent. of the working
population) in June, 1956, and
702,140
(3.1 per cent.) in March,
1963.' The typical rate
of
unemployment has been between
1
and
2
per cent.
TABLE
I
DURATION OF UNEMPLOYMENT AND THE FINANCIAL
UNITED STATES
ADJUSTMENTS OF
THE
UNEMPLOYED IN THE
Percentage
of
Income-Loss Offset
By:
Expenditure
1
Debt
1
Liquid-Asset
Adjustment Adjustment Adjustment
I
0-
9
I
33
I
24
I
44
I
1
69
1
11
1
20
Total
100
100
100
100
100
100
Duration
of
Unemployment
The duration
of
unemployment is
an
important determinant of the
hardship experienced by the unemployed. Confronted with a loss
of income which increases suddenly when unemployment-benefit
receipts end? the unemployed workers can reduce current outlays
or
attempt to maintain them either by selling (liquid) assets or borrowing
(debt adjustment).
No
details are available
of
the
adjustments made
by the unemployed
in
this
country but a study for the United StatesS
'All
data used in this section are from the
Ministry
of
Labour
Gazette
except where stated otherwise.
2As
a
result
of
recent legislation the 1965 and 1966 National Insurance
Acts, the maximum benefit duration has been increased, but for the 1956-1966
period 26 weeks can be taken as the normal maximum benefit period.
P.
A. Klein
:
Financial Adjustment
to
Unemployment
(National Bureau
of
Economic Research, Occasional Paper No. 93, 1965). The data used
is
based
on
a
sample of unemployed workers
in
six
States.
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