Joel Charles: The key to achieving sustained growth is bold labor market reform – News Block

Joel Charles is a ward councilor representing Old Harlow Ward, he was the deputy leader of Harlow Council.

Growth remains sluggish, core inflation is proving harder to shake than anticipated and high interest rates mean Number 11 will want to consider what levers he can pull to instill more confidence in the economy.

Recent labor market statistics show employment numbers rising to what the Office for National Statistics has said is a record. Economic slack, which has been a concern in Whitehall for some time, with previous quarter-on-quarter increases, is also easing.

The overall numbers look good, but there are still challenges to overcome. The number of long-term illnesses has hit a record and the employment rate is still below pre-pandemic levels.

Therefore, the key to any route to establishing a sustained pattern of higher growth is labor market reform.

The government’s focus on skills development across generations, and an increasing shift towards a more employer-led system, is providing the right foundation to boost labor market participation. Building a larger portfolio of upskilling and upskilling opportunities will help strengthen the competitiveness of the national workforce.

But that change will take time to integrate. Global competition is fierce: the UK lags behind Denmark, Germany and Sweden in terms of adults with the highest level of vocational education, according to the OECD.

So there is a pressing need to catch up, and it will be interesting to see what recommendations Sir Michael Barber makes to align delivery of the Government’s reform agenda as the global skills race intensifies.

There are positive signs in the economy; growth was observed in the last quarter. In recent months, the future outlook for the labor market has improved, with the Governor of the Bank of England suggesting that there are signs that the supply of workers is picking up.

But employers still say the job market remains tight and it’s hard to hire for certain skilled roles, exacerbated by the housing market in some places.

The Chancellor’s new Productivity Task Force is, given the right power and the right mandate, a vehicle that can develop the ambitious proposals we need. It would be better to commit to a cross-sector approach up front, rather than ponder the public sector approach first.

In his speech to the Center for Policy Studies, Jeremy Hunt spoke about the need for the Treasury to “enable reform” as the path to boost private sector productivity. What could stand in the way is the expected disruption to the artificial intelligence (AI) job market that automates a significant number of blue and white collar roles.

Ministers need to take a hard look at how to speed up the upgrading of literally millions of workers who will be affected by the pace of AI advances, although the Prime Minister is right that it could lead to better paying jobs.

You also need to be cautious with the pace of change. Developing guardrails to regulate the growth of AI is a sensible move, and one in which Rishi Sunak is showing leadership.

While technological change may increase and diversify employment opportunities, the pace of change associated with AI is moving us toward quite a significant adjustment in the labor market. The country cannot afford the luxury of a precipice where the main jobs that people rely on today for a living are no longer available tomorrow.

Here are some suggested policy ideas and funding changes that could make a difference.

Firstly, although the Government focuses on technical and higher level qualifications, a broader package of interventions is needed to prepare the workforce of the future. Basic employment skills, including budget management, negotiation, emotional intelligence and leadership, need to figure more prominently in the national curriculum.

To provide an enhanced national skills base, building on the experience of the Skills Injection Fund and its drive for Higher Technical Qualifications, more investment is needed to deliver a larger-scale program that equips communities to take advantage of the jobs of the future.

Mel Stride’s decision to abolish the Work Capacity Assessment was an important step forward, allowing people with disabilities or health problems to pursue job opportunities without affecting the benefits they receive. Now there must be more outreach to update the Disability Confident campaign, set a new goal to continue closing the disability employment gap, and further strengthen access to work. Fostering a more diverse labor market, open to all talents, is the right approach.

Job progression is another route to support higher levels of growth. This will help increase productivity, while also providing better financial security for those wishing to increase their earning potential.

Treasury and the Department of Business and Commerce could also consider developing, in collaboration with industry leaders, individual sector resilience plans, in order to provide public policy roadmaps for accessing new markets and supporting the employment creation.

Despite the work already done to deal with economic inactivity, the Government cannot stop looking at the underlying problem: there is a generational gap in employment.

The Government could consider, as part of the Productivity Task Force, the development of policies that seek to sustain participation in the labor market, encouraging employers to recognize the benefits of retaining the most experienced members of their workforce for longer . Promoting a workplace that has the right balance of experience and youth is good for retention and helps with succession planning.

In addition, targeted repayment can help stimulate job growth. The Mayor’s Combined Authorities already have greater powers over local skills interventions, particularly through the return of funding from the adult education budget, but there is scope to do more.

The creation of specialized health and disability centers aimed at helping people furthest from employment to work, and state funding directed at Growth Centers to improve the resilience of the sector, are other potential options to improve the role of the authorities. first class venues.

The government has a window to go ahead with specific changes if it wants to. But time is running out to build a policy platform that moves with the labor market. It’s about stimulating growth through a more skilled workforce that is agile enough to deal with the changing face of working life.

Ministers acknowledge that the job market is changing, but it will take all the machinery in Whitehall to equip the national job market to better withstand technological shocks and face the future with confidence.

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