Lunchtime Seminar No60:Labour Mobility in Northern Ireland

Thursday 4th September 2014

Adelaide House

4 September 2014

Research into labour mobility in Northern Ireland

Introduction

DEL commissioned Oxford Economics to undertake a comprehensive review of labour mobility in Northern Ireland

4

The objectives of the study were to:

Review the factors that determine mobility

Present evidence on the degree of mobility in Northern Ireland

Identify barriers to mobility that may inhibit the efficient functioning of the labour market

The study explores two types of labour mobility within Northern Ireland

Primary focus (moves between non-employment and employment)

Labour market status mobility

Non- employment

Economically inactive

Unemployed

Employment

Full-time employee

Part-time employee

Self-employed

Secondary focus (moves within employment status)

Geographic mobility

Commuting

Frequency

Time of day

Transport availability

Within NI

Beyond NI (outside scope)

Geographical mobility is important, but too much may be inefficient and be associated with a lack of cohesion and a weakening of social capital

Migration

Labour mobility benefits individuals and firms, and is a crucial component of Northern Ireland’s long-term economic competitiveness

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Mobility enables individuals to improve their personal circumstances by moving into work

Mobility enables firms to draw from a larger pool of potential workers Vacancies can be filled more quickly Better match between jobs and workers

For Northern Ireland, greater mobility means: Reduced poverty and social exclusion Making the best possible use of the workforce Ability to quickly react to emerging technologies and commercial

opportunities Greater long-term economic competitiveness

Despite significant progress over the last two decades, the NI labour market continues to face structural challenges

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The proportion of the working age population claiming Disability Living Allowance is twice that in England and Wales

The claimant count unemployment rate fell steadily until 2008, but increased steeply during the recession

There has been a clear process of de-industrialisation over the last two decades

Northern Ireland has the greatest reliance on public sector jobs amongst UK regions

0% 10% 20% 30% 40%

Northern IrelandWales

North EastScotland

South WestYorkshire & Humber

North WestWest Midlands

UkEast Midlands

South EastEasternLondon

0%

2%

4%

6%

8%

10%

12%

2003 2005 2007 2009 2011 2013

Northern Ireland England and Wales

0%

2%

4%

6%

8%

10%

12%

91 93 95 97 99 01 03 05 07 09 11 13

Northern Ireland UK

0%10%20%30%40%50%60%70%80%90%

100%

91 93 95 97 99 01 03 05 07 09 11 13Agriculture and Mining Industry Services

The study used a range of sources and techniques

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A literature review by Dr Ian Shuttleworth of Queen’s University Belfast and Professor Anne Green of Warwick University

Telephone survey with 1,100 non-employed individuals

Stakeholder interviews: JBO / JC Advisers in Ballymena, West Belfast, Derry~Londonderry and

Strabane Employers (Ikea, a Belfast City Centre hotel, a Derry~Londonderry technology

company) Disability Action, Gingerbread NI, Institute for Conflict Research, NI Community

Relations Council, Supported Employment Solutions, Youth Council NI)

Statistical analysis and modelling, including detailed analysis of the LFS

Focus groups with small groups of Job Club participants in Ballymena, West Belfast, Derry~Londonderry, Strabane

Most of the work was completed between October 2013 and April 2014

Geographic mobility

The drivers of geographical mobility in Northern Ireland are similar to those identified by wider academic research

Less mobile More mobile

House moves   

Aged 40+ Aged under 40

  Lower skilled

  Previous experience of working/studying away from

homeWith dependent children No dependent children

Daily commute    

Aged 45+ Aged 25-44

Females Males

Lower skilled Higher skilled

Part-time employees Full-time employees

  Previous experience of commuting

The Northern Ireland labour market is characterised by a clear East-West divide

Employee jobs, workplace-based, 2011

Source: Northern Ireland Census of Employment 2011

Proportion of the population aged 16-74  that is non-employed, 2011

Source: 2011 Census

House moves are not an effective labour market adjustment mechanism in Northern Ireland

Source: Labour Force Survey, Oxford Economics

Proportion of the of population aged 16+ who have moved house during the last three years, 2012

Proportion of the population aged 16+ who have moved house during the last three years, 2004 to 2012

Source: Labour Force Survey, Oxford Economics

People generally move within their local area and many are unwilling to relocate to take up work

Rural area Urban area Rural area Urban areaRural area 2.3 16.4 Rural area 23% 4%Urban area 15.1 2.9 Urban area 6% 67%

Move to

Move from

Move to

Move from

Average distance of move, miles Percentage of movesAverage distance moved within Northern Ireland, 2001-2006

Source: Registrar General Northern Ireland Annual Report 2006

Yes29%

No64%

Not sure7%

Would you be prepared to move to another part of Northern Ireland to obtain employment?

Source: PIMR telephone survey

Commuting times in Northern Ireland are similar to other parts of the UK outside London

Average travel to work time, all UK regions, 2012

Source: Labour Force Survey, Oxford Economics

Average travel to work time in Northern Ireland, 2006 to 2012

Source: Labour Force Survey, Oxford Economics

Northern Ireland is very car-dependent and few people travel to work by public transport

Mode of transport to work, 2011

Source: Census 2011

Proportion of workers commuting by public transport, 2011

Source: Census 2011

Transport is a significant barrier to mobility

Cost of travel means it is often not economically viable for those at the lower end of the labour market to travel to work

“No car, no job; no job, no car”

Car ownership by economic activity status

Source: Census 2011

Transport is a significant barrier to mobility in Northern Ireland

Job Seeker’s Agreement states an individual must be willing to travel 90 minutes to a job Even in Belfast, Ikea find it difficult to recruit from many parts of the city because bus links are focused

on travel to/from city centre

Source: Focus group statements, Oxford Economics

The ‘chill factor’ remains an issue for some sections of the community in Belfast and, to a lesser extent, Derry

Focus groups Only in Belfast did participants highlight areas of the City they would feel unsafe working in

Northern Ireland Life and Times Survey 2012 findings

JBO staff Belfast: chill type reasons one of the more common reasons given for not taking a job, but don’t hear it on a day-to-day basis. Some employers seen

as ‘safe’, regardless of location (e.g. Bombardier, Civil Service). Some parents may forbid adult children from taking a job in an area perceived as unsafe

Derry~Londonderry: chill type reasons sometimes used for not taking a job, but more of an excuse. However, river is a significant divide. Not necessarily seen as unsafe to cross, but other side is viewed as more remote than distance implies.

Ballymena: no chill by area, but some employers dominated by one community and people may refuse to work for them for that reason

Other stakeholders Young men from working class background often reluctant to work outside comfort zone. Has become worse over last year, might be because allocation of investment and jobs seen as unfair by a particular side Youth Council say people declining work placements based on location Gingerbread noted that those with a strong willingness to obtain education or work don’t let chill factors prevent them from taking an opportunity

The telephone survey confirmed that most people do not have concerns about working anywhere within a reasonable distance of their home

20%12% 11% 9% 7% 5%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Belfast Northern South West North West Southern South East

Yes No

Are there any areas within a reasonable distance of your home, but where you are not willing to take up employment? (Workforce Development Areas)

Source: PIMR telephone survey

Please identify why you would not be willing to take up employment in these areas

Religious/ Political, 55%

Too far to travel / travel

issue, 26%

Don't feel comfortable /

safe, 19%

Prior experience,

2% Other, 10%

Source: PIMR telephone survey

Labour market status mobility

It is relatively difficult in Northern Ireland to quickly re-enter employment after becoming unemployed

Proportion of unemployed claimants by duration, average of August to October 2013

Source: Nomis, Oxford Economics

Proportion of population aged 16+ who were actively seeking work last year who are economically inactive this year, 2012

Source: Labour Force Survey, Oxford Economics

In Northern Ireland there is a greater reliance on the state to move people off benefits

Claimant off-flows by reason, Northern Ireland and UK, August to October 2013

Source: Nomis, Oxford Economics

Evidence of the impact of having children on mobility is mixed

0% 10% 20% 30% 40% 50% 60%

Illness/ disability

Lack of job opportunities

Access to and cost of childcare

Carer/ looking after family

Lack of qualifications

Lack of relevant experience

Acess to and cost of transport

Age

Length of time unemployed

Level of pay in comparison to benefits…

Other

Childcare availability and cost, and caring responsibilities can be a barrier to taking up work

Source: PIMR telephone survey

0%

10%

20%

30%

40%

50%

60%

70%

Under 1 year Over 1 year

Prop

orti

on o

f un

empl

oyed

Duration of unemployment

Household with Dependent Child(ren) Household without Dependent Child(ren)

But children may create an incentive to avoid long-term unemployment

The proportion of unemployed people using JBOs and Job Centres as their main method of seeking work is much higher than elsewhere in the UK

Proportion of unemployed persons who use Job Centres as main method of seeking work, 2012

Source: Labour Force Survey, Oxford Economics

Information was not identified as a barrier overall, although certain sub-groups may benefit from specialist support

Generally few problems obtaining information on jobs, and a wide range of websites are used:

Job websites Employer websites, e.g. B&Q, McDonalds, etc. Recruitment agencies Local and Northern Ireland wide newspapers Twitter Facebook Word of mouth

Positive feedback on JBOs from focus group participants:

“The job centre does mock interviews and gives you good feedback on how you performed” (Coleraine)

“Well, the likes of the Job Club here have been very helpful… If you are filling in an application form that you are not sure about, they will give you help. This Job Club has been good with this sort of thing” (Coleraine)

“When you go down to sign on they see what it is that you are looking for. A lot of the times they go through it and are really helpful” (Derry~Londonderry)

NEETs may need specialist help and may not be confident engaging with JBO staff

The disabled have seen a reduction in support following the removal of specialist Disabled Employment Advisors

The study found strong evidence of the ‘benefits trap’, whereby the unemployed prefer to receive benefits than enter employment

Attitudes and expectations of the unemployed Most are seeking a permanent, full-time position to make it financially attractive to come off

benefits Derry JBO staff noted that many of those registering specify they would not work for less than

£30,000 per year, even though they may be signing on to receive £75 per week

Unwillingness to work in evenings and at weekends

Zero hours contracts identified as problematic – rare in Strabane but represent a large proportion of new jobs in Ballymena

Reluctance to build experience and increase employment chances through temporary or part-time work (even though inexperience identified as a strong barrier to employment)

The study found strong evidence of the ‘benefits trap’, whereby the unemployed prefer to receive benefits than enter employment

Median gross weekly pay, full-time workers, workplace based, 2013

Source: Nomis, Oxford Economics

0%

5%

10%

15%

20%

25%

30%

35%

Less than£100

£100 upto £139

£140 upto £179

£180 upto £219

£220 upto £259

£260 upto £299

£300 ormore

Not Sure

What is the minimum wage level required to make it worthwhile to come off benefits?

Source: PIMR telephone survey

The research also found strong evidence of a labour market queue

Older The sick and disabled Less qualified Male Poor ‘soft’ skills Inexperienced History of worklessness in

the household

Younger Female Healthy More qualified

At the time of the research, JBO and JC staff reported that graduates were taking jobs that

previously would have been taken by unskilled or low-skilled

workers

The unemployed highlighted a lack of experience and training as barriers to employment, but employers emphasised ‘softer’ attributes

Difficult to get experience without a job and a lack of positive references can be a barrier.

JBOs helpful in signposting suitable training courses, but JBO staff suggested they have limited discretion to tailor support to those who would benefit most

Passion, enthusiasm, interest in furnishings, people skills and basic IT

Attitude, enthusiasm and reliability

Passion and enthusiasm for the industry will open more doors

Derry technology company

Belfast City Centre hotel

Final thoughts

Where will jobs be available?

Difference between employment growth and working age population growth, 2008-2024

The literature review highlighted that policies to take jobs to workers are rarely effective

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Origin of workers at the Halifax call centre1

Only 30% of newly-created jobs at a number of expanding sites went to those not previously in work

(1) McInstry and Shuttleworth (2002)

Tackling barriers to mobility will require a concerted effort across policy areas, but is essential to reducing social exclusion and enhancing competitiveness

i. How could the government bring workers and jobs closer together, without harming the overall competitiveness of Northern Ireland?

ii. What scope is there to influence the mindset of those who prefer being on benefits to working?

iii. How can Northern Ireland generate enough jobs to ensure that even those at the ‘back of the queue’ stand a good chance of finding work?

iv. How can the government help the unemployed and inactive develop the soft skills that employers value?

v. What steps could be taken to further reduce the ‘chill factor’ that can still affect certain inner-city areas?

vi. Is there more that can be done on childcare to increase the mobility of those with caring responsibilities?

Discussion