Change in the world of work has slowed – but changing times are coming, report says

Few people would argue with the idea that the world of work is changing, but that change could be a lot slower than many think, according to a new report.

The report from the Resolution Foundation, co-written with the Centre for Economic Performance (CEP) at the London School of Economics, dismisses the idea that robots have replaced workers, and that well-paid factory jobs have given way to low-paid, low-security gig economy roles, saying those views are “very wide of the mark”.

It argues that the pace of change in the world of work has actually been slowing down in the 21st Century, reducing the risk of people losing their jobs, but also limiting opportunities for workers to move upwards. Economic change facing workers has been slowing for decades, the report said, reducing damaging job losses but also leading to fewer big pay rises.

The report challenges the popular conception that the labour market has been in rapid and accelerating flux in recent decades. Instead, the biggest structural changes in the 2010s were in manufacturing and professional services, said the report, adding that this was a far cry from the scale of change seen in the 1980s.

The rush home as workers finish their shift at Swan Hunter Shipyard in Wallsend 29 November 1977

But the authors have predicted that decades of declining “job churn”, which has meant fewer risks and opportunities for workers, is likely to be upended in the decade ahead as the combination of Covid-19, Brexit and the transition towards a net-zero economy brings about major changes in the UK economy.

Nye Cominetti, senior economist at the Resolution Foundation, said: “The labour market is often characterised as being in rapid flux, as robots replace workers, and well-paid factory work is replaced by low-paid, low-security gig economy jobs. But these claims are very wide of the mark.

“The reality is that the pace of change has been slowing down, not speeding up. This has reduced the risk of people losing their jobs, but also limited opportunities for workers to move onwards and upwards.”

The report highlights “significant changes” in the world of work in the UK over the last 50 years, including a fall in the number of people working in manufacturing and a growth of service jobs and jobs in the public sector, particularly health and education. There has also been an increase in higher-paying jobs, while total female employment grew by 4.3m between 1992 and 2019, almost all of which was in managerial and professional occupations.

Those changes in the workplace have brought major positives, the report says, including wage growth, particularly for those with transferrable skills who are prepared to move jobs, and especially for people happy to move to a different sector or a different part of the country.

But there are also downsides to a changing labour market, and times of change generally lead to involuntary job losses. People made redundant often take longer to return to work than those moving jobs voluntarily and can tend to return to a lower paying job than the one they were in.

Rates of involuntary job loss were particularly high in declining sectors in the early 1990s, the report said – a warning sign if, as expected, change speeds up in the years ahead.

The report’s authors warn that the combined effects of Brexit, Covid-19, and the transition to net zero are likely to trigger a greater level of structural change than we have seen in recent years. That is likely to result in some opportunities for people flexible enough to move into new positions but also dangers for those unable to keep up with the pace of change.

We are the Robots (Image: Getty Images)

Rui Costa, research economist at the CEP, said: “Covid, Brexit and the net zero transition are set to considerably reshape our labour market over the coming decade, leading to more job churn as some sectors and occupations expand, while others decline.

“Many workers will make the most of this change through pay-enhancing job moves, while others will face considerable challenges in adapting to the changing economic landscape.”

The North East has been adapting to change in the workplace for decades as the traditional heavy industries that dominated the region for generations died out. That process of adaptation has not been without its challenges, of course, and for most of this century the region has had the highest unemployment rate in the UK.

The latest unemployment figures for the North East, though nowhere near levels seen in the 1980s and 1990s, showed joblessness rising while it was falling at a national level, sparking concerns that the region is coming out of the pandemic at a slower rate than other parts of the country. And there are concerns too that more people in the region have become ‘economically inactive’ – out of work, but not looking for a job – during the pandemic.

Those changes will be exercising minds among political and business leaders as they try to plot the region’s recovery from the pandemic.

But it seems worries about us all being replaced by robots can wait a little while longer.

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Graeme WhitfieldRegional business editor