Back-to-work policies need to support people to find most suitable job

theguardian.com:

The No 10 Downing Street team seems to have moved swiftly from handing out “red meat” to the Tory right to handing in their resignation letters. Now obviously no one wants to lose their job, but if it is going to happen make sure you’re in the right country. Specifically, Denmark. That’s the lesson of a paper exploring the impact of job loss on future employment and earnings.

Workers losing their jobs in southern European countries are on average paid 30% less five years later compared with 10% in Scandinavia, mainly because they are less likely to have a job, but also because they end up working for lower-paying firms. Recent Resolution Foundation research has shown that losing your job also results in future pay penalties in the UK.

But what is driving the more positive outcomes in Scandinavia? Active labour market policies, which give people support to connect them to good jobs, are where the authors point the fingers. Which is awkward, given the UK spends less than most OECD countries on such policies. Instead, we are busy with the government’s latest sanctions-driven Way to Work campaign to force the short-term unemployed to take any job immediately. This is madness, first because the short-term unemployed are already flowing swiftly back into work and second because it ignores the real problem: the half a million workers who have dropped out of the labour market entirely thanks to the pandemic. Designing active labour market policies for this, and for those affected by the impact of Covid, Brexit and net zero-induced change through the 2020s, is the task we face. And if that helps an ex-Downing Street adviser or two in the meantime, all the better.

Torsten Bell is chief executive of the Resolution Foundation. Read