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We must focus on better jobs for Northern Ireland

Analysis

By John Simpson

Published 29/11/2016

A new study in Northern Ireland has shown that lower rates for paid employment have left a significant proportion of working employees in poverty, insecure employment or working in a poor quality environment (stock picture)
A new study in Northern Ireland has shown that lower rates for paid employment have left a significant proportion of working employees in poverty, insecure employment or working in a poor quality environment (stock picture)

Northern Ireland has a better record in the creation of jobs than in the creation of more good jobs. In the last decade, the number of jobs available in Northern Ireland increased by 4% (58,000 jobs). Although this was a slower rate of increase than the UK average, nevertheless it was a significant gain. More jobs did not necessarily mean better paid or good jobs.

The Programme for Government includes an objective not just to create more jobs but to create more 'good' jobs.

The term is capable of different interpretations. This could include more better paid jobs, more jobs which generate higher value added to the economy and more jobs which could be expected to offer continuing job security.

The search for more good jobs is sometimes reflected in ministerial statements or Invest NI press releases when a new project offers new jobs which will offer earnings above the current averages in that sector.

However, as often emerges from a business development, proof of delivery on the commitment is harder to establish.

Northern Ireland could be described as successful even if the objective was not more good jobs; just more jobs. To attract any new employment on the same terms as existing businesses is a positive gain. If the experience of Northern Ireland as a source of low cost employees generating relatively low value added is to be changed, then jobs with higher output per person and higher earnings, meaning better and good jobs, is a necessary ambition.

One of the enduring features of the local economy is that average earnings have been consistently lower than the UK averages. Earnings of full-time employees early in 2016 were 92% of the UK average. Ten years ago, it was 91%. For at least the last 20 years and longer, that difference has endured.

Two contrasting features of earnings differences are critical. First, in the public sector average earnings in Northern Ireland compare very closely with the UK averages. Structural and functional differences nearly disappear in the overall averages.

Second, sharper and continuing differences emerge in the private sector. Private sector average weekly earnings in 2006 were 85% of the UK. In 2016, private sector earnings were 84% of the UK.

These differences in public and private sector earnings are significant. For the public sector, parity of the comparable earnings is the result of official policy. For the private sector, the lower earnings levels in Northern Ireland are the outcome of market forces in the labour market only partly influenced where the public and private sectors overlap by the marginal influence of the public sector on private sector recruitment.

In a new study, drawing on the Northern Ireland evidence in the recent UK Poverty and Social Exclusion survey, research by Lisa Wilson in the Nevin Economic Research Institute, has shown that lower rates for paid employment have left a significant proportion of working employees in poverty, insecure employment or working in a poor quality environment.

The concepts used to measure these outcomes are fairly non-controversial, if slightly subjective, standards. The impact of poverty is taken from three overlapping concepts pointing to the standard of living in the households in the survey.

Critically, the three indicators lead to the conclusion that, at a lower estimate, 15% of employees live with a standard of living that can be described as 'income poor'. The figure rises to 27% when a proxy for deprivation is used. These figures alone underpin the logic of a policy emphasising the logic of creating good, or better, jobs.

For over 20 years, average earnings in the private sector have been consistently about 15% lower than the UK average. Perhaps it is reassuring that the Northern Ireland results have not deteriorated. The concerning feature is that the 'gap' has not narrowed.

Northern Ireland has, unhappily, too many 'income poor' jobs!

Belfast Telegraph

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