Restructuring the labour market: The implications for youth.

Key takeaways

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Reading notes

Introduction.

• The election of a conservative government in 1979 heralded a new era in the political and economic management of the UK. in response to an accelerating inflation rate and a developing world recession, the new government adopted radical monitorist policies. The resulting unemployment levels were on a scale not seen since the 1930s with the impact of young employ young people being especially severe. More recently, a greater economic buoyancy coupled with demographic trends which have significantly decreased the numbers of young people entering the labour market have seen unemployment fade from view as a topical issue.
• Iowa findings indicate that not only has the demand for Labour been fundamentally reshaped during the 1980s but also that the part played by the policies of the Thatcher administration in generating change has not been seen as important as is widely believed. In sociological terms, the role of the political process has been constrained by more deep seated and fundamental social and economic processes.
• The results of our research suggest that we are currently witnessing a radical restructuring of the labour market in general and the youth labour market in particular.
  Chapter one conceptualising the youth labour market.
  Theoretical approaches.
  Cyclical theories.
• Most economists in both Britain and the USA have for many years assumed that the youth labour market is subject to the same economic forces and reacts to them in the same way as the adult labour market. British evidence shows that the employment of young people is particularly sensitive to shifts in the general level of demand. (make ham 1980 layout. 1982 raf 1984)
• For the period 1959 to 1977 make Ham estimated that for every 1 per cent increase in overall male unemployment, male youth unemployment rose by 1.7 per cent (make ham 1980 page 42) For female youth unemployment, the sensitivity was even more pronounced, increasing by 3% for every 1% rise in overall female unemployment.
• Drawing on this and other evidence, Ralph has argued strongly that the youth and adult labour markets are undifferentiated using. a quasi shift share analysis. He showed that adverse industrial or structural shifts could only account for 1.3% of the increase in the level of youth unemployment between 1979 and 1983 during which time the number of jobs taken by school levers fell by 45%.
  • " Most of the arguments which attribute the recent rise of youth unemployment to structural economic changes referred to shifts in either the industrial or occupational structure of the demand for labour" (raft 1986 page 57)
    Structural theories.
• Briefly stated, the structuralists believe that the disadvantaged position of young people in the labour market is due to the concentration of the jobs available to them in a limited number of occupational and industrial orders.
• School leaders will face a reduced number of job opportunities if young people's unemployment is disproportionately located in declining industries or occupations.
• In the earlier work of two of the authors (Ashton and Maguire, 1983) the term structural was used to refer to long-term changes such as the decline of manufacturing industries and the growth of service industries. The process of qualification inflation with its associated upgrading of occupations and employers internal reorganisation, resulting in the displacement of youth labour by adult female part-time workers.
• Taking up Braven's deskilling thesis frith 1980 and Finn 1983 and 1987 have argued that changes in the division of labour are divesting many of the jobs done by young people of their skill content. This is particularly true in the service sector which increasingly demands a disciplined but unskilled young workforce.
• Others argue that skills levels in the economy have risen, thereby reducing the number of jobs available to unqualified young people. A more sophisticated version of this idea appears in Roberts et al. 1986.
  • " The evidence from all official sources and from our employers surveys suggest that while trends in the 1980s are varying between firms and occupations, the net change is more consistent with the upgrading than degrading thesis between 1971 and 1981 in Britain. The numbers employed in all white collar grades increased and decreased in all manual strata. Our survey findings suggest that these trends will continue"
  • Overall, they argue that occupation rather than sector shifts is likely to become at the main source of future upgrading.
• Changes in the relationship between employment and output, often as a consequence of the introduction of new technology, and led to what Roberts is called jobless growth (Roberts et al. 1986 a) referring. to manufacturing industries in an early 1980s Robert said.
  • "Employment trends in and forecast by our companies indicate that general unemployment may well have become structural by virtue of its capacity to persist despite economic growth, and that young people are bearing a disproportionate share of that burden" page 9.
  • Firms were reporting an increase in business, but not employment as new technology was enabling them to produce more with a smaller workforce. The similar trends was identified in the financial sector in the late 1970s (Ashton Maguire and Garland 1982)
    Competition between youths and adults.
• Neoclassical economics in more refined versions find some youths are seen to be at a disadvantage in this situation as they lack the human capital, which is seen as essential in order to reap the higher awards to be obtained in the exchange of Labour for income.
• Labour market segmentation provides a very different conceptualization of the labour market. Its proponents argue that pressures of supply and demand do influence the purchase and sale of labouring the conditions under which labour is utilised. However, these pressures and the social and economic forces they generate are seen to operate in different ways in each of the various segments.
• In contrast, labour market segmentation theory suggests that because economic and social forces operate differentially between segments, an increase in the level of unemployment in one segment will not necessarily affect either wages or employment levels in another.
• Either was seen as competing without only in the secondary sector (Osterman 1980) as they were excluded from the primary sector. as dual market theory evolved into segmentation theory, the simple dichotomy between primary and secondary markets was abandoned in favour of a more complex set of divisions (rubbery et al 1984)
• With regard to the competition between young people and adults, these decisions give rise to three possible modes of competition.
  • Where competition is restricted to young people, for example, apprenticeships have age restrictions on entry. In 1985 these accounted for approximately twenty per cent of the jobs entered by young people. Although these are not the only jobs with age restrictions on entry.
  • Where competition is restricted to adults, this is often the case with respect to semi skilled and unskilled jobs in manufacturing industry, where employees seek to recruit married adults with family responsibilities. Our own estimates suggest that over 50% of such jobs are closed too young people.
  • Where young people compete directly with adults, this creates exposed points of entry to the labour market for young people. While Yves and adults do compete in parts of the labour market, it is a mistake to regard this as evidence of competition throughout the labour market. David Rath in 1987 page 241 argues that young people are broadly in the same labour markets as adults. Age discrimination is seen as being far less significant than sex discrimination and where employers do discriminate in terms of age, they do so flexibly. Rath specifies three factors which affect employers decisions in this respect. They are.
    • The training costs associated with recruiting inexperienced young people.
    • Young people's personal and behavioural characteristics, which are often regarded as undesirable in comparison with those of adults.
    • The relative wage costs of young people.
• Even the introduction of free youth labour through the youth opportunities programme Yop and later the youth training scheme YTS has had little effect in opening up a greater range of jobs to 16 year olds.
• In some instances, positive discrimination and favour of employing young people rather than adults works for the advantage of young people. Two factors may encourage such decisions. 1 is the institutional regulation of training which encourages or even enforces the recruitment of school or college leavers, positions as trainees. The other is the pressure on some employers operating in competitive product markets to recruit youths because of the low cost of their labour relative to adults.
• Indeed, Robert Zeta, 1986 found that during the recession, in those jobs where youths and adults competed, employers opted for the experienced adults.
• Perhaps the most significant is the substitution of youths for married females taking place in jobs in the retail and hotel and catering sector.
  The segmentation of the youth labour market.
• Within British sociology, there are a number of studies of the transition from school to work over. from parentheses, Ashton and Field 1976 Jenkins 1983 brown 1987) Which emphasised the cultural divisions which youths and their parents make between different types of working class and middle class jobs. These. studies pointed towards clear divisions between unskilled and semi skilled jobs as one category skilled manual and clerical jobs as a 2nd and professional managerial technical and administrative jobs as the 3rd.
• The youth labour market is most appropriately conceptualised as having eight major labour market segments. These are.
  • The higher segments consisting of professionals, administrators, managers and technicians.
  • The clerical segment consisting of junior office workers, secretaries, clerks, etc.
  • The skilled manual segment of apprentice engineers and craft workers, hairdressers, etc.
  • The lowest segment consisting of operatives in manufacturing industry, labourers and service sector operatives such as cleaners, traditional shop shop sales, cheque out operators, shelf fillers, waitresses and waitresses, et cetera.
• Each of these segments is further divided by gender to create the eight visions which our results just are the main ones.
  The institutional regulation of the labour market.
• Morris Cellular and Silver Star 1986 have argued that this institutional regulation of labour markets generates a distinctive set of relations which link the education, training and industrial relation systems of each society.
• Our results suggest that in Britain, large parts of the manufacturing sector, together with the construction industry approximate the institutionally regulated occupational labour markets. While in most of the service sector, training is provided through firm internal labour markets.
• The British occupational labour markets appear less well regulated and confined to a restricted number of industries such as engineering, printing, hairdressing and the motor trades.
  Chapter two, the impact of the recession.
  Labour market trends.
• The decline in employment in manufacturing, which was evident throughout the 1970s was accelerated by the subsequent recession. In Seventy nine approximately seven million people are employed in the manufacturing industry, whereby, by 1983 that figure had fallen to 5 million and a half million. Even after the recession, the fall in employment and manufacturing continued until 1987. Since when it has stabilised at around 5 million.
• Employment in the service sector has continued to increase, rising from just over 13 million in 1979 to almost 15 million in 1989.
• Growth since 1979 has been uneven and has been most significant in financial services, with a 39.5 per cent increase and to a lesser extent in hotels and catering a 9.7% increase and other services 7.3 per cent increase.
• This shift in the sectorial location of employment is associated with two other structural changes in the labour market, which are also common to other advanced industrial societies, namely the growth of part time employment and the increasing participation of women in 19. in 1971 fifteen per cent of all employers employees were working part time. This figure had risen to 24% by 1989.
• The new part time jobs, which have emerged in the service sector, have largely been filled by women growth. in the availability of part time jobs accounted for all the increase in the number of employees in employment during 1986 with females taking 80% of the additional part time jobs. These trends and the types of job becoming available have led to the participation rate of females in the labour force increasing from 38% in 1971 to 45% in 1987.
• Another fundamental change in the structure of the labour force, which has occurred in all industrial societies, have been the growth of the number and proportion of workers in managerial, professional and technical occupations. This tendency has long been noted in the literature (bendix 1963)
• Our analysis shows that during the period of the recession, this trend continued in a period when there was a major contraction in the overall size of the labour force. The three orders of professional, administrative and scientific workers increased by some 16.6 per cent. In addition, the number of managerial and selling workers increased by 11.6%.
  • Other studies have documented this trend and predicted its continuation into the 1990s. (Golthorpe and Payne 1986 Rajin and Pearson 1986)
• Whereas in 1971 operatives and labourers accounted for 29% of total employment by 1986 this figure had fallen to 20% and is projected to decline further to 16 per cent in 1995.
• It's calling for self employment increase during recession the. proportion of the labour force he was self employed increased from 8% in 1981 to twelve per cent in 1988 during the recession the number of self employed people increased by 48.6% (at Spillsbury McGuire and Ashton 1986)
• Sex segregation is still widespread, for although there has been a shift in the relative sizes of the male and female labour forces, the gender stereotyping of jobs shows little change.
• Age segmentation has also remained relatively unaffected, while the type of jobs available to 16 year olds has changed, young people remain confined to a limited part of the labour market and are excluded from areas such as other services, energy and transport industries and the professional managerial and security occupations.
  Trends in the youth labour market.
  Industrial concentration.
• In 1971 when the minimum school leaving age was fifteen, half of the employed 15 year old males were in just six of the 27 industrial orders. (agriculture, metal goods, timber and furniture, construction, distributive trades and miscellaneous services) The same industrial orders accounted for 41.7% of employed 16 year old males and 25.6% of employed all age males.
• The concentration of points of entry for females was even greater, with just four industrial orders of parentheses, textiles, clothing and footwear, paper and print and distributive trades) accounting for 56.0 per cent of 15 year olds, 46.2% of 16 year olds and 27.5% of all age females in employment.
• Comparisons between these figures and the period of the recession in 1979 to 84 are difficult because of the change which took place in the definition of industrial orders.
• In 1979 81 percent of employed 16 year old males were concentrated in the five of the nine industrial orders. These were metal goods 15 per cent. Other manufacturing 15 per cent distribution 31 per cent. Other services 9 per cent and construction 11 per cent by 1984. The proportion entering manufacturing industries had fallen so that the opportunity became more highly concentrated in distribution which took 42% and other services which took 12%. by the end of the five year. just four categories accounted for 77% of 16 year old males in employment.
• In 1979 just three categories. concentrated female employment. Other manufacturing at 21% distribution at 41% and financial services at 17% accounting for 79% of all 16 year old females in employment by 1984 just two categories distribution 57% and financial services 22% accounted for 79% of female employment.
  Occupational concentration.
• For 16 year old males, the percentage employed in the two main manual occupations fell from 24% in metal and electrical processing and machining, and 70% in other processing and machining in 1979 to 12% and 8% respectively in 1984. By contrast, the percentage entering selling and clerical occupations increased from 10 and 7% respectfully in 1979 to 18 and 17% in 1984.
• By contrast, the percentage for females was no less radical in 1979 four occupational orders, clerical 28% selling 25% catering 16% and other processing are making 14% accounted for 83 per cent of 16 year olds by 1984 other processing making at 4% was much less significant, leaving just three orders selling 36% catering 28% and clerical 21% to account for 85% of female school levers in employment. overall the redistribution was away from the manual occupations and towards selling and catering.
  The youth training scheme.
• Trainees receive a grant of a fixed amount, which may be topped up by the employer if desired in its first year it catered to 24% of 16 year olds and a similar proportion. 27% in 1987.
• In 1984 almost a half of 16 year old school levers, but only 14.9 percent of 16 to 19 year olds in employment were on YTS. In general, YTS exaggerated existing trends rather than changed their direction.
• Overall, the particular skew of YTS participants appears to have accelerated developments that were already under way. This further concentrated opportunities in the less skilled jobs in the service sector.
  The impact of cyclical and structural change.
• On the basis of his analysis of Scottish data, wrath argues that any disproportionate tendency for young people to work in declining industries was very slight and very little of the reduction in employment can be accounted for in this way. Raf, 1986 page 47. The attributes the increase in use unemployment was totally to the change in the general level of demand.
• In fact, over the period 1979 to 80 four industrial shifts actually favoured the employment of 16 to 19 year olds, which other things being equal with increased employment by nine point six five thousand jobs.
• The change in the level of all age employment, which cyclical theory will protect us being the most significant cause of the reduction in employment opportunities, operating in different directions in the male and female labour markets. For males, it was by far the most important contribution factor to the reduction in employment opportunities accounting for about twice the number of jobs lost through adverse industry shifts with regard to females for whom all age employment grew during this. The change was in the other direction. There was a small increase in opportunities almost equal to that loss due to the adverse industry shifts.
• This suggests the changes in the occupational structure are working against young males, especially in closing off opportunities in the higher segments comprising the professions managing and administration.
  Changes in the female labour market.
• One of the most striking features of the labour market in the early 1980s has been the rise in the participation of women in employment.
• The results confirm the general demand for Labour plays a major part in determining the overall demand of youth labour. Yet the youth labour market still retains distinctive characteristics, which mean that the demand for youth labour is an important respect independent of that of adults.
  The school leader hypothesis.
• The argument is that school leaders have relatively little choice about when they can enter the market. They have to enter in the summer of each irrespective year of the general state of demand.