Do we really need a middle class? How the UK Government should respond to the challenge of job polarisation

Women sitting at her desk doing paperwork

By Steven McGinty

At the beginning of the year, former government advisor and HR expert Kevin Green gave a TEDx talk entitled “Why our jobs matter now more than ever before”.

In his talk, he explains that technologies such as artificial intelligence have transformed the labour market and, unlike previous industrial revolutions, old jobs are not necessarily being replaced by better forms of work.

Instead, he warns, the economy is experiencing ever-increasing ‘job polarisation’. In this labour market, highly skilled, in-demand workers benefit from higher wages and flexible working conditions, whilst middle-income earners are finding their jobs disappear, and competition grows for low skilled, often manual work.

What does the research say about this phenomenon?

In 2017, the OECD published the report ‘Future of Skills and Work’, which highlighted that labour markets are polarising within some G20 countries. In the EU, data shows that between 2002-2014 medium skilled routine jobs declined by 8.9%, whilst high skilled roles rose by 5.4%, and low skilled jobs grew marginally (0.1%).

As a consequence, wage inequalities have grown. In particular, the report found that countries experiencing skills shortages are paying higher rates for staff with desirable skills and that greater competition for low skilled jobs is holding down wages for the bottom half of earners.

Greater regional inequalities are also noted as a possibility, as employers are likely to locate in areas with a high concentration of high-skilled workers – which are often very different to the areas experiencing job losses.

However, the report does suggest that some groups may benefit. For example, it highlights that disadvantaged millennials, who have grown up with technology, may have an advantage over older, less tech-savvy workers.

Is technology the only factor leading to job polarisation?

Economist Andrea Salvatori has conducted extensive research and argues that job polarisation in the UK is far more complex. In a 2015 paper for the Institute of Labour Economics, he argued that although technology is a factor, the growth in high skilled jobs can be explained by the increase in the number of graduates since the 1990s.  Similarly, in a 2016 paper, he found that routine employment did not decline in organisations which had adopted technology and that workplaces which specialise in high skilled employment had grown dramatically, from 30% to almost 50% between 1998 and 2011.

One theory highlighted is that of MIT scholar David Autor, who suggests that while technology might be replacing workers in certain tasks, it’s also complementing them in other areas which are more cognitive and difficult to automate.

In addition, Professor Maarten Goos has suggested that offshoring and the global competition for labour has been a factor. In his view, companies have taken advantage of lower wages in foreign countries, particularly in middle earning jobs such as back-office administrative functions and in customer service positions. Highly skilled jobs have been less affected as the supply of skills is less readily available.

What are the social consequences of job polarisation?

Mr Green’s Tedx Talk is less about the economics of job polarisation, and more about the social issues which may stem from this divided economy. He recounts his own experience, describing himself as a ‘late bloomer,’ and recounting his journey from an administrative middle-class job in Wandsworth council to gaining promotion through further study.

For him, the real concern is that the chasm between low and high skilled jobs means that it will be increasingly difficult for some groups in society to progress in their careers. In particular, he highlights graduates looking for their first positions, as well as mothers returning to the labour market after a period out to raise children.

Research has also shown that increased job polarisation might be leading to discontent amongst low skilled workers, and that this could partially explain recent political divisions between those living in large metropolitan cities and those in left behind regions.

So, how should the UK Government respond?

Academics Dr David Hope and Dr Angelo Martelli recently investigated the role labour market institutions play in tackling wage inequality in modern economies. By analysing the economic data for 18 OECD countries from 1970 to 2007, they attempted to prove that national labour market systems could protect wages. They found that:

strong labour market institutions, in the form of coordinated wage setting, employment protection legislation, and high wage bargaining coverage, reduces the effect of the expansion of employment in knowledge-intensive services on income inequality.”

In addition, the Joseph Rowntree Foundation argues that there is a need to tackle inequality locally by focusing on the bottom of the labour market, particularly by improving working conditions for low-skilled workers.

Mr Green takes a similar viewpoint, and argues the solution is a ‘revolution in lifelong learning’. This means creating labour market institutions that help people trapped in low skilled work, so that they are aware of the opportunities available to them, and potentially providing funding to support them on their journey.


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The Men’s Sheds revolution spreading around the world

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by Stacey Dingwall

Last week I attended ‘Men’s Sheds: the movement in Scotland and the big picture internationally’, an event, organised by the Centre for Research & Development in Adult and Lifelong Learning (CR&DALL) at the University of Glasgow.

Our blog on the Men’s Sheds movement was one of our most popular last year. The movement originated in Victoria, Australia in the 1990s, as a place for men to socialise and take part in practical activities. 23 years later, there are now close to 1,000 such spaces in Australia. Sheds have also proven popular in Ireland (350 Sheds and counting) and Scotland (at least 38 up and running, with 30 in the start-up phase).

Research has indicated that loneliness and isolation are a particular issue for certain groups of men, which is reflected in higher suicide rates. Evaluations of Men’s Sheds have found participation to have a range of positive effects for these groups of men, predominantly in terms of their mental health and wellbeing.

The movement in Scotland …

The first speaker of the day was Willie Whitelaw, Secretary of the Scottish Men’s Sheds Association (SMSA). Willie highlighted two key points, which were themes throughout the rest of the afternoon:

  • The importance of Sheds not being regulated by outside agencies, e.g. government – this was something that those involved in Sheds felt particularly strong about. As noted by Professor Mike Osborne, the Director of CR&DALL, at the start of the afternoon, the reduction in government support for adult education has created a need for people to organise themselves in order to access lifelong learning opportunities. Thus, those who attend Sheds feel strongly about preserving the independence of the space, as well as its democratic dynamic.
  • How to ensure the sustainability of Sheds, and community projects in general – Willie described how the SMSA can support Sheds across Scotland by offering advice on applying for funding, how to keep things like rental costs low, and using mechanisms such as the Community Empowerment Bill and Community Asset Transfers to their advantage. Noting the difficulty that many community projects face in sustaining themselves long-term, Willie highlighted the Clydebank Independent Resource Centre (CIRC), which has been running for over 40 years, as a rare but good example of how sustainability can be achieved.

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…and the big picture internationally

The second speaker of the day was Professor Barry Golding from Federation University Australia. Barry is the most prolific researcher in the area of Men’s Sheds, and published The Men’s Shed Movement: The Company of Men last year. Barry described the origins of the movement in Australia, and suggested it took off due to its provision of the three key things that men need: somewhere to go, something to do, and someone to talk to.

Barry also emphasised the importance of not formalising Men’s Sheds, and particularly not promoting the spaces as somewhere where men with health issues go (not a very attractive prospect to an outsider!) This point was also picked up by David Helmers, CEO of the Australian Men’s Shed’s Association. David described the experience of one Australian Shed who had a busload of patients arrive after being referred by health services. The point of the Shed is to create a third space for men (other than home or work) where they can relax and socialise with their peers. Any learning or health improvements that arise from this is coincidental and not forced.

Barry and David were followed by John Evoy of the International Men’s Shed Organisation (IMSO). John focused on the experience of Sheds in Ireland, noting the impact of the recession as a particular reason why the movement has taken off in Ireland. The IMSO’s aim is to support a million men through Sheds by 2022.

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Strengthening the movement and using evidence

To finish the afternoon, two panels comprising Shed members and researchers considered the questions of how to strengthen and sustain the Men’s Sheds movement, and how research might be beneficial to this.

Shed members on the panel and in the audience suggested that changing the stereotype of Sheds as spaces for older men with health (particularly mental) issues is important. In fact, men of any age are welcome to attend their local Shed, and current members are particularly keen to encourage this in order to support the intergenerational transmission of practical skills that are otherwise at risk of being lost.

In terms of available evidence, it was noted that research on Men’s Sheds is still scarce, and focused on the Australian experience. Catherine Lido, a lecturer in psychology in the university’s School of Education, discussed the pros and cons of carrying out a systematic evaluation of the movement in the UK. Again, the importance of the democratic nature of Sheds was raised – allowing outside agencies, particularly government, to come in and carry out research would involve the loss of some control. Any research conducted would have to be participatory, in order that Shed members did not feel like they were the subject of an ‘experiment’. Barry Golding highlighted, however, that there is currently almost no data on UK Sheds available; rectifying this could strengthen Sheds’ chances of being successful in applications for funding to support their running costs.

If you enjoyed reading this, you may also be interested in our previous blog on ‘makerspaces‘, which have drawn comparisons with the Men’s Sheds movement.

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