Business Irish

Sunday 16 December 2018

Brendan Keenan: We need to know more about job 'revolution' before we act

The impact of jobs offered by firms such as Deliveroo is still little understood. Photo: hadrian - ifeelstock
The impact of jobs offered by firms such as Deliveroo is still little understood. Photo: hadrian - ifeelstock
Brendan Keenan

Brendan Keenan

Like many youngsters, I had a notion to be a pilot; until a preliminary test found I had the manual dexterity of a turtle. Had I done better, I might have gone on some airline's expensive training course, although not everyone made it through that.

Today, I would probably have to take out an expensive loan to pay for the training. As it was, I actually received a pretty lavish course in journalism, paid for by the Canadian press Baron Roy Thomson. Ask any media manager to provide such a thing today and they would bust a rib laughing.

Change comes in many guises.

Back then it would not have been possible for a trainee to get a bank loan so airlines had no choice but to pay. They could have deducted the cost from the qualified pilots' pay, but such an idea would not have occurred to them. Nor would editors have found what now passes for in-house training funny.

There has been change in finance, workplace power and culture. Most have benefited managers and owners although, in fairness, they face levels of competition unimaginable 40 years ago when airlines were cosy cartels and newspapers fatted cash cows. In both cases, staff enjoyed a large chunk of the resulting profits - arguably too large for the good of their employment long-term.

Without these other changes, the impact of the new communications technology on jobs would have been a lot less than has been the case.

That impact is moving centre stage as an issue, with calls for action from the likes of the OECD and promises from the Government to improve the quality of employment.

But despite all the fuss about the Ubers and Deliveroos, it is not that clear what the impact has actually been.

In a revised paper on their work on the subject, Elish Kelly and Alan Barrett of the ESRI look at the changing nature of work during the crash and in the recovery. As this column likes to point out, the collapse in employment was unprecedented and the subsequent recovery amazing.

With all of it happening in the space of 10 years, there is an understandable assumption that there must have been a decline in the quality of work, with new jobs less secure and rewarding than those which went in the crash.

Security and reward are broad terms, difficult to define. The main source for the analysis, the Quarterly National Household Survey, has its limitations but it points to a fairly consistent pattern; there was a decline in the terms of employment during the recession but things have improved greatly in the recovery.

That is not what might be expected if there has been a significant change in the nature of work itself.

The OECD has suggested this is happening, with evidence that some 60pc of the jobs created between the 1990s and the end of the Great Recession were 'non-traditional', such as part-time, temporary and self-employed.

The Irish data does not seem so clear-cut. If one regards temporary workers as the most vulnerable (although some are that way by choice), they accounted for 21pc of the total in work 2007.

This rose rapidly to 35pc in 2010 but had fallen back to 27pc by 2015.

Given what happened to construction, it is no surprise that men fared worse. Only 14pc said they had temporary jobs in 2007 but this doubled during the recession and still stood at 26pc in 2015. Allowing for the building bust, that is hardly an indication of a change in the nature of work.

The figures for the supposed great bolthole of self-employment are just as striking. They accounted for just 7pc of jobs in 2008 and appear not to have gone above 10pc, even as jobs were disappearing and those who lost them were finding it difficult to get new employment.

The analysis found that the proportion was back at 2008 levels by 2015.

It does find that concerns about youth unemployment expressed after last week's Live Register may be justified. The proportion of the 20-25 age group in temporary work soared from 17pc to 41pc and had declined only modestly in the early stages of recovery. Those in the 35-44 group were barely affected at all.

The recovery has continued strongly since 2015. With total unemployment below 6pc, the percentages of young workers in temporary or part-time work may well be back near the boom time proportions of 21pc and 25pc. What matters is whether the nature of the atypical work is different now than it was then, even if the proportions are similar.

It would be ridiculous to suppose that nothing at all has changed but we will need much more detailed analysis than even the new Labour Force Survey can provide to decide how much has changed and what should be done about it.

This is important because stories about the exploitation of atypical workers are beginning to shape political attitudes. While the stories may be true, they are not of themselves proof of a general problem. Off-the-cuff policies, so beloved of Irish ministers, could make things worse for workers, rather than better.

One reason to be careful is that the situation are those differences between countries. Falling unemployment in the US and UK has not sparked higher wages - as is now happening in Ireland, just at the stage of recovery when it might be expected.

There is a fierce debate in Germany pitting concerns about inequality against the evidence that greater labour flexibility (ie less secure jobs) protected the country from unemployment.

Nothing could have protected Ireland from the banking collapse but the recovery seems to be a textbook case of a successful labour market.

One of this year's issue will be whether to allow in more non-EU workers.

Differences in trade union power could be one explanation but, oddly, Irish unions seem not to be gaining from the recovery in job quality: membership among new employees fell by almost 50pc during the recession but had not noticeably recovered by 2015.

The decline in union power in the private sector is a well-established structural change, but talk of unions brings us back to pilots. Ryanair seemed the epitome of the new order, using globalisation and information technology to bring labour costs to what Michael O'Leary now concedes was probably too low a level.

The company has been forced into retreat by two of the most distinctive features of that old world - regulation and the power to organise.

As for the supposed revolution in the world of work, maybe it is not as fundamental as is generally assumed.

Reinventing the wheel is generally regarded as the height of folly but, just occasionally, it may be the right thing to do.

Indo Business

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