Andy Burnham, the mayor of Greater Manchester, has just announced that he is looking at creating a ‘GM Employers’ Charter’ to raise productivity and job quality in the region. As a first step the Mayor is seeking the views of employers, workers, trade unions and other experts, so it’s a good time to take stock of how Greater Manchester’s labour market is performing.
Our research reveals five key challenges. There are problems of the now, and two are issues on the horizon. They are: halting the region’s relative decline, addressing the growth in ‘atypical’ work, ending the pay squeeze, encouraging progression and ensuring young people can access well-paid work.
Let’s start with the now. In mid-2007 the region’s employment rate was 70.5 per cent, marginally below the UK rate of 72.6 per cent. Today that gap has widened: the employment rate in Greater Manchester is 71 per cent and the UK’s is 75.1 per cent. To halt this decline more needs to be done to support relatively disadvantaged groups. Although the region has done well in encouraging greater numbers of older works, ethnic minorities and single parents into work, the employment rates for people with disabilities and those with low qualifications are the same as they were at the turn of the millennium.
Getting people into work should be a priority, but more attention needs to be paid to the types of jobs. Like the rest of the UK, there has been a sharp increase in the numbers of people in ‘atypical’ forms of work in the region. There are now 30,000 people on Zero Hours Contracts (ZHCs), 35,000 working through agencies and 170,000 self-employed. Though some workers value the flexibility these forms of work provide, research shows that people on ZHCs and those working through an agency are paid less than like-for-like workers, while the pay squeeze has had a greater impact on the self-employed.
The region’s pay squeeze
While the picture on employment is mixed, there are few bright spots when it comes to pay. The region has experienced a sharper pay squeeze than the rest of the country, with male employees bearing the brunt of this. Typical male pay is 10 per cent lower than it was in 2009 and is below the level at the turn of the millennium. The only groups that have been protected are the lowest paid – particularly women – who have benefitted from the introduction of the National Living Wage (NLW).
Turning to the future, the NLW will have a big impact. On the one hand it will significantly reduce the incidence of low-pay, cutting the number of people paid below two-thirds of the typical (median) hourly wage by 40,000 to 200,000 in 2020. On the other hand, it will mean that over a seventh of all employees in Greater Manchester are paid at or just above the wage floor. Employers will need to provide pathways and incentives for people to progress and government must do more to equip people with the skills to progress into better-paid jobs.
A key group that are likely to need more help are younger workers. Our analysis shows that increasingly the jobs market for young people is divided between relatively well-paying technical and professional jobs and lower-paying occupations; there has been a noticeable ‘hollowing’ out of mid-skilled jobs in trades, industry and administration.
Notwithstanding the above, there has not been a better time in recent memory for Greater Manchester to meet these challenges. The hope is that just as the region has led the way in terms of devolved government, it can also be a trailblazer for how to solve some of the most pressing issues affecting the world of work.