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Economic and Social Inclusion in the West Midlands: Baseline Evidence Update

Helena Duignan and Andy Phillips7th June 2013

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The region’s employment prospects remain poor

• Net loss of 120,000 jobs between 2008 and 2009

• 40,000 in Birmingham alone

• 20,000 net new jobs have been created since then

• Employment levels have yet to start recovering in parts of the Black Country

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Meagre prospects for entry level jobs

• Only 54,000 net new jobs forecast by 2020

• A further 1.3 million due to labour market ‘churn’

• But most will be taken by people already in work with skills and experience

• A dearth of entry level jobs – dwarfed by workless numbers

232, 300 unemployed people in the West Midlands in 2012

37,400 overall entry level jobs available 2012-2010

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Unemployment has risen by more than 50%

• Unemployment has risen by 82,000 to 232,000 over the 2007-2012 period

• The gap between regional and national unemployment rates has widened slightly

• The gap between best and worst performing local authority areas has widened

• Sandwell and Wolverhampton have the highest rates - overtaking Birmingham

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Twice as many wards with out-of-work benefit rate 25%+

• 23 wards have 25% or more people on benefits – compared to 10 in 2007

• 21 extra wards are now over 20% and 40 extra are over 15%

• There are 23 fewer wards in the lowest group, 0-5%.

2003 CAS ward February 2007 2003 CAS ward February 2012

00GLMY : Bentilee and Townsend 30.2 00CUFR : St. Matthew's 29.8

00CNGH : Sparkbrook 29.2 00GLMY : Bentilee and Townsend 29.7

00CNFB : Aston 28.8 00CSFU : Soho and Victoria 29.4

00CSFU : Soho and Victoria 27.8 00CWFA : Bilston East 29.2

00CWFK : Low Hill 26.9 00CWFK : Low Hill 28.8

00CUFE : Blakenall 26.6 00CNGH : Sparkbrook 28.2

00CNGP : Washwood Heath 26.3 00CTFC : Chelmsley Wood 28.0

00CUFR : St. Matthew's 25.9 00CUFE : Blakenall 28.0

00CNFR : Kingstanding 25.1 00CNFB : Aston 27.4

00CNGD : Shard End 25.0 00GFPH : Malinslee 27.2

00CWFF : Ettingshall 24.9 00CNGD : Shard End 27.2

00GFPU : Woodside 24.8 00GFPU : Woodside 27.1

00CWFA : Bilston East 24.8 00CWFJ : Heath Town 26.5

00CQFE : Foleshill 24.7 00CWFF : Ettingshall 26.4

00CTFC : Chelmsley Wood 24.7 00CNFR : Kingstanding 26.3

00GLNC : Burslem South 24.6 00CNGP : Washwood Heath 26.2

00GFPH : Malinslee 24.6 00CTFE : Fordbridge 26.2

00CNGG : Soho 24.3 00CSGA : West Bromwich Central 25.9

00CWFJ : Heath Town 24.2 00CSFQ : Princes End 25.8

00CSFQ : Princes End 23.9 00GLNC : Burslem South 25.6

00CSGA : West Bromwich Central 23.7 00CNGG : Soho 25.5

00CNFL : Handsworth 23.6 00CTFS : Smith's Wood 25.5

00CTFE : Fordbridge 23.6 00CUFJ : Darlaston South 25.3

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Nearly 100,000 fewer people are in employment

• Similarly the gap between regional and national employment rates has widened

• And the gap between best and worst performing local authority areas has widened

• Birmingham’s rate was just 57% in 2012 - 13 points below the England

average

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Long term unemployment more than doubled to 88,000

• 50,000 more people are long term unemployed than in 2007 – a 130% increase

• Accounting for 38% of the jobless total compared with 25% in 2007

• Almost half (43%) of the long term unemployed are from elementary occupations

The impact has been uneven by demographic group Employment rates have fallen sharply for:

• Those with low/no qualifications

• Young people

• Males

But the employment rate has risen for those from a BME group and fallen only slightly for disabled people

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Qualification levels are improving

• The skills profile of the region is improving but still lags behind national levels.

• The proportion with no qualifications fell from 17% to 14% between 2007-11.

• 69,000 people in Birmingham (10.3%) have ‘other qualifications’

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Impact so far of welfare reforms

• The profile of the caseload is changing considerably

• People are being moved onto short term benefits and encouraged to move into work

• JSA only group to have increased - 35% of out of work claimants are now on JSA

compared with 25% in 2007

• But there are shortages of entry level jobs and the total caseload has risen by 56,000

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Impact so far of welfare reforms

• The introduction of ESA has so far seen the overall caseload decline only slightly, but with a greater proportion of completed assessment placing people in the ‘work group’ than the ‘support group’

• Further impact will see the ESA/IB caseload decline and the ESA work group expand.

• Continuation of current approval levels could see an extra 143,500 jobseekers in WM.

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People are struggling to move into sustainable jobs

• JSA stock was over 170,000 in 2012

• But over a 12 month period 350,000 claims moved on and off the register

• Insecure, low paid jobs mean that people are struggling to stay in employment

• There is a ‘revolving door’ between work and benefit

Underemployment is becoming widespread

• Increases in part time work and ‘under employment’ are keeping people out of unemployment but struggling to get enough work

• Part time employment has increased by 5,000 while full time employment has decreased by 101,000

• The growth in part time working has, perhaps surprisingly, been an entirely male phenomenon

• While female part time employment has fallen there are 20,000 more male part time workers

Underemployment is becoming widespread

• Involuntary part time employment has more than doubled in the West Midlands by 67,485 from 55,920 to 123,405

• There are now 162,594 people in WM who are economically inactive but want to work, up from 159,377 in 2007.

• Using the JRF definition of underemployment (unemployed plus involuntary part time plus inactive want work) the West Midlands has seen a 41% increase on the 2007 level, from 366,397 to 518,299, an increase of 151,902.

• Using the ONS definition of underemployment (employed but want more hours) under employment in the West Midlands has increased by 37%, or 62,000 to 229,000. 9.6% of workers are now classed as underemployed in WM (up from 6.8%).

• Numbers of temp workers have remained relatively constant but there has been a 77% (UK 57%) increase in the number of temp workers who can't find permanent work, an increase of 21,978 to 50,516.

In-work poverty is rising

• While a decade ago the majority of people in poverty were in workless families it is now those in work who make up the majority

• At 25% the West Midlands has second the highest proportion of working age adults in poverty in the country

• The number of housing benefit claims in the region from those in work has doubled since 2008

• The West Midlands has 460,000 workers (22%) earning below the living wage –well above the UK average

The impact of social and economic exclusion

• Numbers of people reporting a mental health problem has increased by a third (APS), and number reporting any health problem has increased by 18%.

• There has been a 20% increase in numbers of statutory homeless in the West Midlands between 2009 and 2011

• The West Midlands overtook London as the area with the highest rate of homelessness in 2009

• The unemployment rate for people with mental health problems has risen by five percentage points over the last 5 years and this group has an employment rate of just 31%

In Summary

• Falls in employment have hit those with low level qualifications and in elementary occupations hardest. There are very limited opportunities available for these workers.

• Rising unemployment has pushed the region further behind the national average.

• Key demographic groups with low employment rates have not been any worse affected than the population in general, with the exception of young people.

• The impact of welfare reforms is yet to be fully reflected in the benefit caseloads.

• Unemployment levels have not risen as high as many expected, but this is due to increases in under employment and temporary working.

• In-work poverty, low wages , health problems and homelessness have all increased.

Thank you.Any questions?

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