Myths about the unemployed

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Myths about the unemployedW.W. Daniel aa Director at PSI ,Published online: 26 Nov 2007.

To cite this article: W.W. Daniel (1990) Myths about the unemployed, Policy Studies, 11:4,31-42, DOI: 10.1080/01442879008423580

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Myths about the UnemployedW.W. Daniel

Politicians, policy-makers, commentators and scholars share the samemyth about unemployed people. They believe that 'the unemployed'constitute a distinct and continuing group in society analogous, forinstance, to students and pensioners.

In reality the unemployed differ from such groups in two importantways. First, most people who become unemployed spend, at most, only afew months in that condition so that the composition of the unemployedis constantly changing. Secondly, the unemployed do not identify withtheir attributed status; even those who spend longest out of work tend notto think of themselves as members of a separate identifiable group.

Figure 1 Rate of attrition comparing (a) curve based on status at eachinterviewing stage; (b) curve including those who had workedbetween stages

10090

80

70

60

50

40

30

20

10

0

Percentages

Not looking for work

10 15Months

20 30

• Attrition based on — Attrition Includingthose in work those who had workedat each stage between interviewing stages

Policy Studies Winter 1990 Vol 11 (4) 31

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Myths about the Unemployed

The constantly changing composition of the unemployedPSI has recently carried out a major study over time of the fortunes of8,000 people who first became unemployed at the beginning of the 1980s.1

Unemployment in Britain was then close to its postwar peak and rising.Perhaps the most striking initial finding was the speed with which

people found newjobs, even at such a time. Figure 1 shows the proportionswho had foundjobs at different points over the two and a half years duringwhich we studied them. A third of the unemployed foundjobs within abouta month; half did so within about four months; and two-thirds within ninemonths. It is true that, not much more than a decade previously, half thepeople becoming unemployed foundjobs within about a fortnight. But,although by the 1980s our results showed a substantial increase in thelength of time spent out of work by all people who become unemployed,few of them entered into long-term unemployment.

Of course, we followed the fortunes of only one cohort enteringunemployment. Throughout the 1980s about 350,000 people becameunemployed every month and about 350,000 people left unemploymentevery month. Whether unemployment rose or fell depended uponwhether the difference between those joining and leaving was positive ornegative. It was not a matter of the army of the unemployed beingincreased each month in the first half of the 1980s as more people losttheir jobs and joined others already out of work. Nor did employers stopfiring people and start hiring them again in 1986, thus causingunemployment to fall. The hiring and firing went on continuously during

Figure 2 Unemployed inflows and outflows through the 1980s

500

400

300 -

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989

No. becoming unemployed(Inflow)

I No. leaving register(Outflow)

32 Policy Studies Winter 1990 Vol 11 (4)

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both the first and second halves of the decade, as did people joining thelabour market and people leaving it.

As Figures 2 and 3 show, in the first part of the 1980s the numberjoining the register each month was rather more than the number leaving,and unemployment rose steeply. In the middle part, the numbers werefairly similar and unemployment levelled out. In the third part thenumber joining the register each month was not dissimilar to the numberin the early 1980s, but the number leaving the register was higher andunemployment fell. Fluctuations in the level of employment did notrepresent increases and reductions in the size of a near-permanent army.The unemployment level at any time was the net outcome of a set ofdynamic processes.

Figure 3 Annual levels of unemployment through the 1980s

14

12

10

B

6

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Percentages

:•. ^

^S&&!

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989

The unemployed do not identify with each otherAs I have said, the second distinctive characteristic of the unemployedcompared with other groups is that they do not identify with their status.For them being out of work is an hiatus. It is not a condition that they havechosen. Even when they may reasonably be said to have left their previousjobs voluntarily, they have done so because they could not stand the jobsrather than because they wanted to be unemployed.

For the great majority it is certainly not a condition that they want tocontinue. All their efforts are concentrated upon making it as short aspossible, and in most instances they succeed in restricting the duration toa few weeks or a few months. Moreover, it is remarkable how even youngpeople who enter long-term unemployment continue to conceive of their


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condition as temporary and to act as if it is temporary, although theircurrent period of unemployment is sometimes longer than the totalperiod that they have spent in work.

Some implicationsThe distinctive characteristics of the unemployed compared with othersocial groups have implications for policy and practice. Thosecharacteristics provide a ready answer to the questions about theunemployed that have so troubled, and continue to trouble,commentators and policy makers. For instance, during the 1980s asunemployment rose above the magic one million level, and then abovethe magic two million level, and then above the magic three million level,they asked why there was so little trouble, why the unemployed protestedso little, why they did not rebel.

Our results show that, even when unemployment was rising to threemillion the median duration for people coming into unemployment wasstill only four months. While people were out of work, their attention andenergies were devoted to getting back into work. They had neither thetime nor the inclination to see themselves as part of a group with intereststhat could be served by collective action. The few who failed to get jobs,and who went into long-term unemployment, tended to be older workers,or the least skilled or less than fully fit. They are not the stuff of whichrevolutionaries or activists are made.

Similarly, employers and labour market administrators asked, after theclosures and redundancies associated with the massive rundown ofmanufacturing industry in the early 1980s, and when unemployment wasso high, why they found so few skilled workers waiting for them at thejobcentres. The answer is that when skilled workers lose their jobs they donot sit around waiting for the economy to pick up and produce a reneweddemand for people with their skills. They go off and take whatever jobsare available, whether those jobs enable them to use their skills or not andwhether or not they are in the same industry as before.

Being prime labour, they get the jobs that are available. Whenemployers come to the jobcentre looking for skilled workers a year or solater, they find chiefly the semi-skilled and unskilled whose jobs aremeanwhile being done by skilled workers. For instance, when majoremployers like ICI have closed plants in Northern Ireland, in localitieswith unemployment of over 20 per cent, they have found that all theirredundant workers have moved into newjobs within six months or a year.The redundant ICI workers have moved to the front of the queue forwhatever vacancies have occurred, and the people who have sufferedprolonged unemployment as a result of the closure have been those lessattractive potential recruits in the queue whose places the skilled workers


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have taken. The level of unemployment has risen locally; people in thelocality have suffered longer periods of unemployment in consequence;but those costs have not been borne by the displaced ICI workers.

A third example of how unemployment has been misunderstood isthat as it rose a range of groups thought it appropriate to develop specialservices for unemployed people. These varied from the counselling orsocial support offered by voluntary groups to the specialised programmesfor unemployed people developed by the broadcasting authorities. Theorganisers of such services asked why so few took advantage of them. Theanswer again was that they were aiming at what they saw as a sitting targetbut was in fact a moving one. Of course, not all the unemployed flowrepresent a moving target and some do go into long-term unemployment.But, as I argue later, they may more usefully be regarded as a number ofdifferent groups requiring a range of different policies rather than as partof a homogeneous social category.

The misconceptions of the two main political partiesPerhaps the dangers in the stereotype about the unemployed is bestillustrated by the stances characteristically adopted towards theunemployed by the right and the left in Britain. The right, contemplatingtwo million unemployed, sees two million people who do not want to work,are not willing to take the jobs that are available because they get more inbenefits than they can earn, or who are unemployable. This is anextraordinary view to be taken by people who revere the market. There isno market in the world other than the labour market where they wouldargue that, simply because there are some goods in stock, the goods arenot genuinely for sale or no-one wants to buy them. Yet hardly a week goesby without a Conservative MP proclaiming in the House of Commons thatthe unemployed are not genuinely unemployed because there are largenumbers of job vacancies advertised in his local newspaper.

For its part, the left looks at two million unemployed and sees twomillion deprived people and two million deprived families. It sees workersexcluded from the mainstream of society. It sees waste as the economy isdeprived of the skills, abilities and efforts of the unemployed. It sees livesbeing ruined as skills atrophy and men and women become moredemoralised the longer they remain out of work. As unemployment rises,the model underlying this thinking is of 'the ranks of the unemployedbeing continuously augmented with with new recruits'.

Change over timeThe fundamental error is shared by many apparently serious students ofunemployment. It is most common among those who have adopted apsychological or psycho-sociological approach to the experience of


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unemployment. They have been primarily interested in the changes thattake place. They have adopted the expectation that change does take placeand that the change is for the worse. The most common expectation isthat the unemployed move from optimism and confidence, following theinitial shock of job loss, through disappointment and frustration atrepeated rejection, to resignation and apathy (see Figure 4). The changemodel implicit in Figure 4 has pervaded psychological thinking aboutunemployment over the past decade or so. The PSI analysis shows that asa general explanation of the experience of unemployment it is wrong,although it may have some relevance for a particular sub-section of theunemployed.

Figure 4 Diagrammatic representation of change over a period ofunemployment

Morale

THE EXPERIENCE OF UNEMPLOYMENT

Moneyworries

Boredom

Decliningself-respect

Give up tryingaltogether?

Shock Optimism Pessimism

Diminishingchance of

another job

- • Fatalism

Source: Harrison, DE Gazette, April 1979.

As already explained, only a minority of those who lose their jobs sufferprolonged unemployment. The majority either find jobs more quicklythan is assumed in the change model, or move out of the labour marketsoon after they first become unemployed. For the large majority of people,the experience is congruent with their position in the occupational


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structure and labour market and their work histories. Many have previousexperience of unemployment and realistic expectations of the types of jobthat will be available to them to get out of unemployment.

This does not mean that, for them, unemployment is free of costs,deprivations or even trauma. On the contrary, they find being out of workso unacceptable that all their energies are devoted to ending theexperience as soon as possible. In consequence, they are generallyprepared to take the first job they are offered. That is apparent both fromtheir accounts of the type of job for which they are looking when out ofwork and of the characteristics of the first jobs they take and their reasonsfor taking them. Those initialjobs are often taken consciously as a stop-gapto provide a base for a more consideredjob search. In consequence, manyof the processes of job search and job choice that are assumed by thechange model to take place during a period of unemployment actuallyoccur, if at all, in the search for the first job following unemployment.

False assumptions are also made by many labour marketadministrators and economists when they ask questions about the types ofjob for which unemployed people are looking and those they are preparedto accept. In practice, the unemployed tend to adopt the strategy of gettingback into work in order to look for a job, and that strategy is likely to bemuch more rational than that assumed in conventional job search models.

At the same time, among the minority of the unemployed whoexperienced intermediate periods of unemployment, our survey did findevidence of some change over time. In general, that change was in theexpected direction. On average, those economically active people whoexperienced prolonged unemployment did tend to become, for instance,less choosy about the type of job they were prepared to accept, moreconcerned about being out of work and less active in seeking work. Butthe change was usually slight. For instance, there was a consistenttendency over our five consecutive stages covering some two and a halfyears, for job seekers to look at the self-service sections of employmentoffices progressively less frequently. But all this meant was that the averageinterval between visits to self-service sections increased over the periodfrom one week to one and a half weeks. In addition, there was littleevidence of any change over things like the minimum asking wage and theacceptability of moving home.

The bulk of the change that did take place occurred at an early stagein people's period of unemployment. For instance, job seekers tended toreview the training, retraining or geographic transfer options early in.theirperiods of unemployment rather than starting to consider them afterprolonged failure to find work.

On a number of topics the largest change occurred between onemonth and five months. Subsequently the trend slowed down and


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occasionally it was reversed. Perhaps most importantly, we did not findthat the systematic changes occurring over periods of unemployment weremuch associated with subsequent behaviour and experience. Forinstance, when we analysed the relationship between the changes thatoccurred between the first and second stages and whether or not peoplehad found a job by the third stage, there was only one type of changeassociated with subsequent employment prospects. That was whetherpeople had become more or less choosy in the type of work they wereprepared to consider.

Those who became more prepared to consider a wider range of jobs,we found, were much more likely to find work than those who narrowedtheir field of job search. The finding is of special importance because wealso found that men who initially looked for 'anything going' got jobsmuch less quickly than those who sought a particular type of work. Itappears that the most effective strategy in job search, for men, was toconcentrate the search on a particular type of job initially and then toconsider a wider range of options if the initial search was unsuccessful.

But this finding about change in the type of work for which peoplewere lookingwas an exception. Generally, the characteristics, expectationsand attitudes with which people came into unemployment had muchmore impact upon their experience and behaviour than did any changethat took place during their period of unemployment.

The redundant are not the same as the unemployedPerhaps one of the reasons the change model, and other approaches thathave shared its main assumption, have been so wide of the mark is thatthey have focused upon just one sub-section of the unemployed flow. Theyhave concentrated upon men displaced by major closures or redundanciesfrom traditional industries in localities with high unemployment, such assteel works, shipyards and engineering works in the relatively depressedregions. Before our survey, studies of such closures were among the fewsources of information about the labour market experience of theunemployed flow.

The extent to which men displaced by major redundancies differ fromthe unemployed flow as a whole can hardly be stated too forcefully. Onlya minority of all people cominginto unemployment lose theirjobs becauseof redundancy. For those who do, the circumstances in which they aremade redundant are generally different from the widely publicised majorclosures and lay-offs which have been the focus of previous research. Manyredundancies result from the ending of contracts known to be of limitedduration from the start, or from workforce reductions in small firms onthe basis of 'last in, first out'.


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Two major contrasts serve to illustrate the extent and implications ofthe differences between the unemployed flow as a whole and mendisplaced by major redundancies who form a small part of the flow. Thefirst is a difference in age. Men made redundant following works closuresor large-scale layoffs tend to be substantially older than average and tohave had substantially longer periods of service. The threatened works hasusually been running down for some time, and the intake of youngerrecruits is likely to have stopped during the run down. Younger and moremobile members of the plant's labour force will have seen the writing onthe wall and taken the opportunity to leave before the redundancy, judgingthat getting a good alternative job ahead of the pack is worth more to themthan their redundancy compensation.

In contrast, the unemployed flow tend to be remarkably young and tohave had remarkably short periods of service. Consequently, thecharacteristic victim of major redundancy is a man in his mid-50s, with 20or 30 years service and no previous experience of unemployment; he willbe skilled or semi-skilled in a declining industry. The characteristicmember of the unemployed flow is a young man or woman in his or herearly or mid-20s with only a year or so of service in the previous job, withrecent experience of unemployment, with poor qualifications comparedwith the age group as a whole and with little good work experience tocompensate.

Secondly, men displaced by major redundancies tend to have receivedcomparatively substantial redundancy payments because of their age andlength of service, combined with voluntary agreements in the nationalisedindustries and the corporate sector to supplement the statutory provisions.Most members of the unemployed flow as a whole received no redundancypayment and only a tiny proportion received a payment that amounted toas much as a few months pay.

In view of such differences it is hardly surprising if those who havetaken the victims of large-scale redundancy as typical of the unemployedhave, again, been mistaken.

The costs of short-term unemploymentIt would, however, be wrong to conclude, as some have done, that becauseso many of the flow find jobs quickly unemployment is painless or posesno problems for them.

First, so far as the unemployed flow as a whole are concerned, theytended to work in low paid, low skilled and manifestly insecure jobs. Theylost their jobs with little notice and little or no compensation. Despite thefact that being in work furnished them with relatively poor rewards, theyfound being out of work was so much worse that they were generallyprepared to take the first job offered them, however unsatisfactory, simply


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to be back in work. Again, although they tended to have been low paid intheir previous jobs, most of them took a pay cut in order to return to work.Moreover, for those who found newjobs relatively quickly, those newjobsoften proved to be only temporary. Of those back in work within tenmonths of their initial period of unemployment, two-thirds had lost or lefttheir first job following unemployment within a further ten months.

This provides a further example of the way unemployment is widelymisconceived. It is assumed by economists and labour marketadministrators that the costs of unemployment are concentrated in aparticular period of unemployment and the scale of the costs is dependentupon the length of the period. Unemployment is seen as a finite periodbetween two stable and satisfactory jobs. If the period is short, the costsare low. In fact, for most of our sample, the period of unemployment onwhich we focused was but one episode in a serial of unsatisfactory, unstablejobs, punctuated by periods of unstable unemployment. Beingintermittently out of work was more an inevitable and unavoidableconsequence of selling their labour in the part of the labour market inwhich they were trapped than an unusual and unexpected event. We wereable to establish that their recurrent unemployment was generally aconsequence of the labour market and the turbulence introduced intotheir lives by the experience of previous unemployment, because generallyat some stage in their working lives they had had periods of service closeto the norm for their age group. Moreover, our previous research hadshown how a stable long-service workforce could be transformed into oneprone to job changing, following the experience of redundancy.

In short, recurrent unemployment may be seen as a characteristic ofthat part of the labour market to which most people who lose their jobs ata time of high and rising unemployment belong. Their growing numbermay be seen as a consequence of the growing market economy of the 1980sand they may be seen as among its major victims. Earlier PSI researchshowed that the much vaunted 'negative pay increases' of the early 1980swere largely confined to the small firm sector and that the direct impactof 'ability to pay' as the criterion for pay increases was largely confined tothat sector. Our present research shows that the small firm sectorcontributed disproportionately to unemployed flows while, for instance,the contribution from the public sector was negligible. The economicstrategy of the 1980s has been to increase the role of the small firm sectorand reduce that of the public sector. The trend has clear consequencesfor the extent of recurrent unemployment, and for a growing proportionof the working population.


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The dangers of long-term unemploymentIn addition, a proportion of the unemployed flow do go into long-termunemployment and over a period when inflows consistently outnumberoutflows, the number of the long-term unemployed rises inexorably. Thusby the middle of the 1980s 1.4 million people on the register of theunemployed had been out of work for more than a year. That figure wasmore than three times the total of all unemployed people little more thanten years previously. The long-term unemployed represent a specialcategory which has been studied by PSI elsewhere. They approximatemore closely to the conventional notion of an identifiable group withpermanence, although they still differ from other groups like students andpensioners in a number of respects. Perhaps the chief of these is that,despite their long period out of work, they obstinately refuse to identifywith 'the unemployed' as a group.

The long-term unemployed themselves divide into three sub-groups.The first of these is older workers who are nearing retirement age and whotend to see themselves as early retired, albeit early retired on the mostimpoverished and humiliating terms. The second sub-group is made upof those prone to ill health or less than fully fit. Again, the problems theysuffer and the problems they pose have much in common with theproblems of providing adequate income maintenance for disabled andchronically sick people, together with opportunities for them to make acontribution to the society and the economy. The third sub-group amongthe long-term unemployed is those without skills and qualifications in alabour market where there is a great surplus in the supply of the unskilled,and where only the fittest and ablest of the unskilled, or those who canafford to sell their labour cheapest owing to their circumstances andcommitments, can expect to work.

In summary, then, two main groups of unemployed people can beidentified. The first is made up of people who suffer recurrentunemployment, who make up the majority of the unemployed flow overa period of time, as they move into and out of jobs. Such people, throughmischance or lack of the right qualifications at the right time, have failedto gain a foothold in the primary labour market. In consequence, theyappear to be permanently denied access to the rising incomes, livingstandards, intrinsic rewards from work and job security enjoyed by the bulkof the working population. They are doomed to move from low paid,insecure, unrewarding jobs to unemployment and back again. Theirflexibility enables the market economy to work.

The second group is made up of the long-term unemployed, whoaccount for the majority of the unemployed population at any one time.They comprise three sub-groups, many of whom have difficulty incommanding wages at market rates. They represent part of a wider social


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challenge to assure adequate incomes and useful activity for people whentheir labour market value falls short of any reasonable assessment of theirneeds.

In conclusion, it is important to recognise that increased flows intounemployment contribute to both increased recurrent unemploymentand increased long-term unemployment These in turn contribute tofuture unemployment, owing to demand-side deficiencies which result ina slow response to increases in demand. For instance, our analysisidentifies two particular ways in which unemployment itself reduces thequality and quantity of the labour supply. First, more young workers andworkers in the prime of life experience unemployment, and theexperience of unemployment itself introduces into people's working livesa turbulence which contributes to future job instability. Secondly, olderworkers who are doing perfectly satisfactory and productive jobs aredisplaced as a result of cyclical falls in demand on to the open labourmarket where many will be deemed 'difficult to employ' or 'unemployable'because of their age or lack of generalisable skills.

References1. W.W. Daniel, The Unemployed Flow, London, Policy Studies Institute,

1990.2. S. McRae, Young and Jobless, London, Policy Studies Institute, 1987.3. R. Harrison, 'The demoralising experience of prolonged

unemployment', DE Gazette, April 1976; see J. Hayes and P. Nutman,Understanding the Unemployed: The Psychological Effects of Unemployment,London, Tavistock, 1981, for a more sophisticated version of the view.

4. S. Brittan, Second Thoughts on Full Employment Policy, London, Centrefor Policy Studies, 1975.

5. W.W. Daniel, 'Who didn't get a pay increase last year?', Policy Studies,5(1), 1984, pp.78-90

6. M. White, Long-term Unemployment and Labour Market, London, PolicyStudies Institute, 1983.


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Myths about the unemployed