Northern Ireland seems to have work to do when it comes to 'good' jobs
Economy Watch by Andrew Webb, managing director at Webb Consulting
I received an email to my inbox on Thursday morning predicting with some certainty that Boris would be Prime Minister. By noon that day, Boris had decided not to stand. We are in unprecedented times, and events are changing so fast I'll steer clear of Brexit and politics for fear of being out of date faster than usual.
I wrote in this column previously about 'high road' economic development and how "the high road promotes quality, high-wage, high-skill, high value-added jobs over the opposite". All laudable aims, I'm sure you can agree, but there is a question left hanging when we talk of 'quality' or 'good' jobs.
What is 'good', and how do you measure it? Having included an ambition for 'good jobs' in the draft Programme for Government, the authors will be tasked with answering the question.
The standard analysis of the labour market usually focuses on the number of jobs - and its opposite number, the unemployment rate. Recall how we heard during the election that 40,000 jobs had been created in the last term of the Assembly and 50,000 more is the aim this time round.
This new focus on 'good' is welcome. As I asked in a previous article, is providing £1m in support to bring 250 jobs that pay an average of £16,000 per annum really where we want to be? The aim for 'good jobs' would suggest not.
But, as in most things, there is more to it than that. Maybe jobs that pay £16,000 per annum would be counted as 'good' jobs by the Executive if they are permanent, offer career progression, have a great work atmosphere and are delivered in an area that has suffered massive levels of deprivation?
So, now we start to get a feel for the complexities that start to present themselves when thinking about job quality.
What is a 'good job'? Before long, the government's statisticians will have to come up with an answer to that question.
Luckily, they will be spoiled for choice when casting around looking for inspiration - an EU paper on the subject noted 19 different indicators on job quality.
Distilling them down suggests some obvious candidate metrics for inclusion, including:
Wages: Wage data seems like an obvious indicator to include but curiously doesn't feature in all measures of job quality. The full time median wage in NI is just over £25,000, one of the lowest levels across the UK regions. Perhaps more interesting is the gap between the top and bottom earners. Northern Ireland's top 10% earn, on average, 3.3 times more than the bottom 10%. This is a bigger gap than anywhere in the rest of the UK except the south west/London and east regions.
Hours worked: Hours worked and job quality tend to be inversely related - the longer the working time, the lower the job quality. Northern Ireland scores well here. On average, we work for 33 hours a week compared to 37 hours on average in Europe.
Other measures in relation to hours worked include the proportion of us that work more than 45 hours a week, a measure of the elusive work-life balance. Again, we do well here. Fewer than one in five of workers work more than a 45-hour week. This is the lowest rate across all UK regions - in the rest of the UK, it is one in four.
Skills development: An important element of job quality is the possibilities available to workers to improve their skills in the process of working. One potentially useful indicator in this regard is the extent to which employees have received job-related training in the past four weeks. Northern Ireland has a long history of weak performance when it comes to training, consistently ranking as the lowest across the UK.
Labour Force Survey statistics suggest that only 6.4% of employees received training, compared to nearly 10% in the UK as a whole.
Labour relations: 'Days lost' to strike action and the number of claims made against employers can provide an indication of the general sense of labour market wellbeing. Per 1,000 employees, Northern Ireland has lost fewer days to strikes (seven) than all UK regions except Scotland. The vast majority of strikes are about pay, so it is also interesting to look at the number of employment claims being lodged over issues such as unfair dismissal, discrimination or breach of contract to see how our employers are 'behaving'. Per 1,000 employees, t he Labour Relations Agency's annual reports show volatility but a slight increase in claims since 2011-12 from 10 per 1,000 to 11.2 per 1,000. Comparable figures for Great Britain suggest only three employment claims per 1,000 employees.
Job satisfaction: The annual investors in people employee sentiment survey showed that almost a third of Northern Ireland employees are unhappy in their jobs, due to reasons such as poor management, not feeling valued or no career progression. This was slightly higher than in the rest of the UK, where 29% were unhappy in their work.
Deciding on how to measure 'good' could take a while, but a quick canter over just a few of the factors that are typically considered suggests Northern Ireland has a distance to travel to achieve the aim of more people working in good jobs.
In Economy Watch on July 19, we hear from Ulster Bank chief economist Richard Ramsey