School to work transitions in a changing labour market:
Implications for schools and colleges:
How The Youth market Has Changed?
Department of Education/Education Employers Taskforce
03.02.2017
Hugh Lauder - University of Bath
SRHE Conference-7 December, 2011
Celtic Manor
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An outline of the trends
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Previous policy and theoretical understandings:
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The Knowledge Economy
Human Capital Theory
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What has changed?
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What can be done about it?
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We tend to see the youth labour market in
segments or sectors which relate to
education’s institutional structure:
Universities – graduate jobs.
Colleges of Education – skilled work through
to apprenticeships.
Apprenticeships
Semi and unskilled work.
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Start with some data:
In the USA 52 per cent of four year college graduates are in
jobs that match their skills while 48 per cent are
overqualified.
over 5 million college graduates are in jobs that require less
than high school education. (Vedder et al, 2013)
The ONS report that underemployment amongst graduates
has risen from 37 per cent in 2001 to 47 per cent in June
2013.
In Europe Holmes and Mayhew, show that graduate
underutilisation is ‘widespread but varies between countries’
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If graduates are underemployed then what of other young
people in the same cohort?
One hypothesis is that there is a ‘bumping down’ effect.
As graduates cannot get what were traditionally judged as
graduate jobs so they have entered fields where nongraduates were normally employed. (e.g., estate agents).
At the same time undergraduates undertake casual low wage
labour (bar tenders, baristas).
This means that less qualified youth are bumped out of the
labour market –hence lower skilled youth employment.
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It is assumed in the mainstream economic literature, in
human capital and skill bias theory that the solution to the
problem is to emphasise upskilling young people.
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The assumption of the knowledge economy.
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We may wish to do that but not for the reasons assumed.
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In order to understand why tried and tested policies will no
longer work, we need to look at the broad historical trends.
The question is: do we live in a knowledge economy?
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Human Capital theory would predict that the more educated
workers are, the more productive they are and hence their
incomes will rise.
When we look at the OECD (2014) they make this statement:
The economies of OECD countries depend on a sufficient
supply of high-skilled workers. Educational qualifications are
frequently used to measure human capital and the level of an
individual’s skills. In most OECD countries people with high
qualifications have the highest employment rates. At the
same time, people with the lowest educational qualifications
are at greater risk of being unemployed. Given the
technological advances that have been transforming the
needs of the global labour market, people with higher or
specific skills are in strong demand (102)
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Some leading skill bias theorists claim that we are seeing a
temporary halt in high skill jobs but that there will be a
demand for some intermediate skilled jobs. David Autor
(2015) responding to the threat of robots, says:
The primary system of income distribution in market economies is rooted in
labor scarcity; citizens possess (or acquire) a bundle of valuable ‘human
capital’ that, due to its scarcity, generates a flow of income over the career
path. (p.28).
He understands the stakes are high for:
‘If machines were in fact to make human labor superfluous, we would have
vast aggregate wealth but a serious challenge in determining who owns it
and how to share it…Are we actually on the verge of throwing off the yoke of
scarcity so that our primary economic challenge soon becomes one of
distribution?’ (p.28).
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Autor is already behind the curve!
In ‘The Global Auction’ Phil Brown and I describe the some of
the processes which explain the trends we have observed.
There is a global auction for high skilled jobs in which those
who are cheapest often win.
There are processes of standardising, digitising and
exporting what was once high skilled knowledge work –digital
Taylorism.
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Now high skilled work that was once exported –discovery
work in law as well has smart factories –Adidas no longer
needs labour, however low the wages.
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There are national variations in the youth labour market and
unemployment in the UK is in part a function of the retention
of older workers but this is to miss the macro trends
outlined.
The knowledge economy was an inaccurate imaginary that
stripped out capitalism and the drive to reduce labour costs
and reified technology.
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In a highly uncertain labour market education becomes more
important not less!
There will be those who will seek to cut education budgets
dramatically, with appaling consequences.
We need citizens who can understand the possibilities of
‘other worlds’ that can be derived through academic
disciplines and high quality vocational education.
While the dual system in Germany is under threat, we should
note that approx. 50% of graduates move to different
‘professions’. Their vocational education gives them a launch
pad.
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The point is now well understood, we need a basic income.
And it is appearing in political debates across the globe:
Because of the lack of demand for skilled work
Technology - The robots!
It reduces transfer costs.
It encourages initiative.
And would enable carers to live with dignity. A gender
argument.
But a basic income, even if it genuinely covered a living wage
–we are far from that, is not enough.
We need lifelong learning to enable citizens to seize
opportunities within a different conception of the labour
market.
 Thank you!