Book contents
- Frontmatter
- Contents
- List of tables and figures
- Acknowledgements
- List of acronyms
- Part 1 Setting the scene
- Part 2 Benefits for unemployed people
- Part 3 Benefits for disabled people
- Part 4 Benefits for children and families
- Part 5 Benefits for retirement
- Part 6 Towards a welfare class?
- References and further reading
- Index
4 - The economy and unemployment
Published online by Cambridge University Press: 09 September 2022
- Frontmatter
- Contents
- List of tables and figures
- Acknowledgements
- List of acronyms
- Part 1 Setting the scene
- Part 2 Benefits for unemployed people
- Part 3 Benefits for disabled people
- Part 4 Benefits for children and families
- Part 5 Benefits for retirement
- Part 6 Towards a welfare class?
- References and further reading
- Index
Summary
Summary
High inflation, triggered by the oil crises of the 1970s, led to tighter control of public spending and, with the election of the Thatcher government in 1979, an explicit belief that the control of inflation was more important than full employment. The unemployment rate rose to unprecedented levels and did not return to the levels of the early 1970s until 1999. Caseload numbers remain 65% above their 1971 level.
Rising unemployment coexisted with increasing employment over most of the 30-year period. A decline in manufacturing was more than offset by increased employment in the service sector, providing a mix of low and high paid jobs that have been increasingly of a part-time and/or short-term nature. Educational standards have risen, financial returns to qualifications have increased and wage dispersal has grown.
People who become unemployed are disproportionately male, young, poorly qualified, with little experience or with a poor work record. The same groups predominate among the stock of unemployed, although older people and members of ethnic minority groups, who find it more difficult to return to work, are also over-represented.
An increase in the average duration of unemployment was the major determinant of rising caseloads. Older workers, those with health problems, tenants (often an index of material deprivation) and people with dependant children were most at risk of long-term unemployment.
The prevalence of people experiencing repeated spells of unemployment while trapped in a ‘no pay low pay’ cycle may have increased.
The election-winning motif ‘It's the economy, stupid’, coined on behalf of President Clinton, is equally valuable in understanding Britain's increase in unemployed claimants. It is necessary to consider how the economy has changed, and how this might influence the characteristics of unemployed people and the time that they remain without work. However, it is first necessary to take account of the marked change in the approach to economic policy that has occurred over the last three decades.
Changed policy goals
Hindsight suggests that the immediate postwar pattern of full employment, interrupted by comparatively brief economic downturns, ended with the oil crises of the early 1970s. Traditional Keynsian methods of demand management appeared to lose their effectiveness. Economic policy errors in the early 1970s contributed to rapidly rising inflation which, combined with low growth, triggered ‘stagflation’, and the need for tough action by the incoming Labour government in 1974.
- Type
- Chapter
- Information
- The Making of a Welfare Class?Benefit Receipt in Britain, pp. 53 - 68Publisher: Bristol University PressPrint publication year: 2000