The goal of full employment

The annual conference of Britainís governing political party heard the Chancellor of the Exchequer combine a stark statement of liberal economic orthodoxy with a bold pledge to create "full employment for the twenty first century".

Gordon Brownís conference speech rejected "pump-priming, free-for-alls and dashes for growth". Instead it extoled the virtues of "prudence, discipline, responsibility and competitiveness". This then is the new Governmentís economic modernisation credo.

Alongside lower taxation and incentives to work, there will be a minimum wage. And "labour market flexibility" will be accompanied by the New Deal programmes for the young and long term unemployed, for lone parents and for disabled people.

Brown characterises this dual modernisation of both economy and welfare as giving "employment opportunity for all in every part of Britain". This is the newly defined goal of full employment.

Forty years ago, full employment meant jobs for men - mainly blue collar, preferably for the duration of an individualís working life - and almost certainly full-time. These were days when working hours were strictly ordered either in shifts or rarely strayed beyond the 8am till 5pm time slot. Families were overwhelmingly dual-parented and usually only one of them worked.

Not any longer. As the graph on page 28 shows, the number of men and women employees achieved parity late last year - although male employment inched slightly ahead again in the first 2 quarters of this year.

During the fifties, self employment was an obscure tax status reserved for actors, shopkeepers, lawyers and doctors. Now there are 3.3 million - accounting for almost 1 in 6 workers.

Forty years ago, less than 8% of the workforce was in part-time employment. Now itís a quarter.

And in 1957, when registrant unemployment accounted for 1.4% of the workforce, work insecurity did not overwhelm the national psyche as it does now: with over 50% of the population fearing redundancy and nearly 40% of the working population having experienced at least one spell of claimant unemployment in the last 5 years.

Single parent families in the 1950s had no labour market or social security consequences. Now there are one and a half million lone parents. Most of them want to work but the proportion who have to rely on benefits has grown from 40% to 70% over the last 20 years.

Considering how few people work in hazardous industries now, incredibly, the workforce has lost more people to long term sickness and disability. The number of working age people who rely on long term sickness benefits has doubled to 1.8 million over the last half of this 40 year span - despite the general health of the working population improving.

So the goal of full employment has to match up with these significant demographic and social shifts.

Equally, we are living with the labour market consequences of Britainís rundown as an economic power prompted by the long term decline of competiteveness. In an effort to reverse this trend, the efforts of Government and businesses have led to productivity almost doubling since 1960. But in production industries especially, this has not resulted in more jobs - despite output (after adjustment for inflation) being more than a third higher than in 1971. The number of employees has fallen sharply over that time - from 40% to just 19% of all employees. So, fewer people are generating more output.

And then thereís gobalisation. Goods, services, labour, capital and information are all highly mobile. The removal of trade barriers, the growth of low cost "tiger" countries in Asia and the Pacific rim has challenged the dominance of European and North American economies.

Although globalisation offers remarkeable opportunities for nimble and technologically advanced companies, the risks attached to unfettered liberalisation are borne by the many whilst the rewards are reaped by the few. Surviving, and even prospering, in this precarious global market requires highly skilled employees, constant innovation and the application of new technologies by cost effective and adaptable organisations. And the rapid pace of change means that human skills need to be regularly updated whilst capital investment is needed on a long term and continuous basis.

Britainís new Labour Government understands that, in this new economic world, the role of the State is to help individuals cope with change and to adapt. And, if full employment no longer means the guarantee of work, but simply the opportunity to be employed, then Government has to create new safety nets so that individuals can take risks in their lives. And they have to ensure that imbalances are smoothed out - like regional underdevelopment on the one hand or inequalities of income, wealth and educational opportunity on the other.