Significant reform to close America’s 11 million jobs-gap with UK would boost incomes and reduce inequality
President Trump can learn from Britain’s strong employment record as he looks to make good on his promise to be “the greatest jobs producer that God ever created”, according to a new Resolution Foundation report published today (Monday) as the new President starts his first day on the job.
With the US and UK seemingly moving in step politically by rejecting the “establishment” and voting for significant change in elections last year, You’re hired! looks at the labour market performances of the two countries to see whether they share a similar economic story too.
The report finds that economic performance has been very different on the two sides of the Atlantic, both in the recent past and over the last few decades. While the US has outperformed the UK since the crisis on GDP growth and productivity, its record on converting that into rising living standards is much more mixed compared to the UK, despite neither having a strong recent record on incomes.
The reports finds that since 2008 US income growth has been primarily driven by pay. In contrast, the stronger and more equally shared income growth in the UK has been underpinned by rising employment, which is now at a record high of 74.5 per cent. Despite 75 months of continuous jobs growth under President Obama, employment remains 3 percentage points below pre-crisis levels.
The report finds that the poor employment performance in the US reflects a concerning long term trend of falling participation in the labour market among prime age (25-54) workers. Previous analysis by the Resolution Foundation found this played a role in last November’s election result.
The growing gap in employment performance between the countries now means that if the US had the same employment rate as the UK, 11 million more Americans would be in work.
The labour market participation rate (measuring those either in or looking for work) has been falling among men in the US for 60 years now and is an issue which President Trump correctly identified during his campaign. Even more surprising however, and less regularly focused on by the candidate Trump, has been the drop in participation among women since 2000. Over the same period, prime age female participation in the UK has risen by 4 percentage points, even during the downturn.
The Foundation says that President Trump’s focus on getting jobs back in traditionally male sectors such as manufacturing and mining risks missing a trick as there are even bigger job gains to be made by helping more women into work. And while the UK has long looked to the US for lessons on how to boost productivity, for example by trying to replicate its success in the digital economy, the US should be doing more to learn from the UK’s strong record on employment, and on increasing female participation in particular.
The Foundation points to three key mutually reinforcing UK policy successes over the last 20 years that the US should look to emulate (and that UK policy makers should not forget). These are:
• Raising the expectation of work: Tying unemployment benefits to actions such as job searching, combined with training and support to improve employment prospects, has encouraged more people to find work.
• Making work pay: More generous tax credits and a much higher minimum wage than in the US have boosted incentives to work in low and middle income households and helped drive worklessness down to a record low of 14.9 per cent.
• Boosting the support for work: Increases in maternity leave and support with childcare costs have enabled more women to return to work after having children. Recent research has found that the lack of US policy action on this accounts for a third of the divergence in female participation between the US and other advanced economies.
You’re Hired! shows that the countries’ contrasting labour market performances have also driven a big divergence on inequality, which has been broadly flat in the UK since the late 80s while continuing to rise in the US.
Torsten Bell, Director of the Resolution Foundation, said:
“President Trump wants to make America great again. Doing that requires one thing above all else – jobs. A country once envied around the globe for its employment performance now simply has too many people left out of the world of work, hitting incomes and driving up inequality.
“Despite far too widespread fatalism, there is nothing inevitable about these trends. The UK has plenty of its own living standards challenges but it has seen employment increase to record highs –and it is policy action that has made that happen. If Donald Trump wants to deliver on his promise to be ‘the greatest jobs producer that God ever created’, learning some of the lessons of the UK’s experience would pay more dividends than building walls or reducing trade.”
Daniel Tomlinson, Researcher at the Resolution Foundation, said:
“The anti-establishment votes for Brexit and Trump last year suggest that the US and UK are to some extent moving in step politically, as we have done for much of our post-war history. But there are striking differences between the UK and US economies, especially when it comes to getting people into work. Had the US matched our recent employment performance, 11 million more Americans would be in work. Similarly, had we experienced US-style pay growth we’d be £30 a week richer today.
“As President Trump starts his plan to Make American Great Again there are important lessons he can draw upon from the jobs success of Britain. These range from higher minimum wages and tax credits to make work pay, tochildcare support to boost female employment.
“These pro-employment policies have the added benefit of helping to tackle inequality – another pressing issue that the new President faces.”
A Good Look At How Homes Will Become More Energy Efficient Soon
Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.
There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.
1. The Rise Of Smart Windows
When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.
If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.
2. A Better Way To Cool Roofs
If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.
Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.
3. Low-E Windows Taking Over
It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.
They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.
4. Magnets Will Cool Fridges
Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.
The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.
5. Improving Our Current LEDs
Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.
That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.
Maybe Homes Will Look Different Too
Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.
ShutterStock – Stock photo ID: 613912244
IEMA Urge Government’s Industrial Strategy Skills Overhaul To Adopt A “Long View Approach”
IEMA, in response to the launch of the Government’s Industrial Strategy Green Paper, have welcomed the focus on technical skills and education to boost “competence and capability” of tomorrow’s workforce.
Policy experts at the world’s leading professional association of Environment and Sustainability professionals has today welcomed Prime Minister Teresa May’s confirmation that an overhaul of technical education and skills will form a central part of the Plan for Britain – but warns the strategy must be one for the long term.
Martin Baxter, Chief Policy Advisor at IEMA said this morning that the approach and predicted investment in building a stronger technical skills portfolio to boost the UK’s productivity and economic resilience is positive, and presents an opportunity to drive the UK’s skills profile and commitment to sustainability outside of the EU.
Commenting on the launch of the Government’s Industrial Strategy Green Paper, Baxter said today:
“Government must use the Industrial Strategy as an opportunity to accelerate the UK’s transition to a low-carbon, resource efficient economy – one that is flexible and agile and which gives a progressive outlook for the UK’s future outside the EU.
We welcome the focus on skills and education, as it is vital that tomorrow’s workforce has the competence and capability to innovate and compete globally in high-value manufacturing and leading technology.
There is a real opportunity with the Industrial Strategy, and forthcoming 25 year Environment Plan and Carbon Emissions Reduction Plan, to set long-term economic and environmental outcomes which set the conditions to unlock investment, enhance natural capital and provide employment and export opportunities for UK business.
We will ensure that the Environment and Sustainability profession makes a positive contribution in responding to the Green Paper.”