Malcolm Maguire

Restructuring the labour market : the implications for youth

List of Tables - List of Figures - Acknowledgements - Introduction - Conceptualising the Youth Labour Market - The Impact of the Recession - Determinants of the General Demand for Labour at the Level of the Firm - Structuring the Supply of Workers - Determinants of the Type of Labour employed at the Level of the Firm - Changes in Labour Demand during the Recession - The Segmentation of the Youth Labour Market - Local Labour Markets - The Youth Labour Market and Social Policy - Bibliography - Index

Local Labour Markets

In examining the way in which employers structure the demand for youth labour we have concentrated on showing how the labour market is segmented and how the restructuring of the labour market has had a differential impact on the various segments. However, the size and composition of the various labour market segments vary from one locality to another. Because youths are restricted in their job search to the local labour market, this means that there are dramatic differences between local labour markets in the chances of youths securing employment, in the type of employment available and in their subsequent experience of the labour market.

The function of academic and non-academic criteria in employers' selection strategies

Abstract The different ways in which employers use educational qualifications and non-academic criteria in their recruitment and selection of young people are explored. Five different types of selection strategy are identified, each of which is characterised by a different balance between the use of academic and non-academic criteria. After a consideration of the functions that educational qualifications perform in the different strategies, the nonacademic criteria are examined in more detail. The paper concludes with an examination of the implications of these findings for careers guidance.

The Impact of the Recession

Any attempt to assess the impact of structural or cyclical change over a given time period has to be set in the context of the longer-term changes which have been occurring in the general labour market. One of the most significant in Great Britain has been the decline of the manufacturing sector as a source of employment and the continued growth of the service sector. The decline in employment in manufacturing, which was evident throughout the 1970s, was accelerated by the subsequent recession.1 In 1979 approximately seven million people were employed in the manufacturing industry, whereas by 1983 that figure had fallen to five and a half million.2 Even after the recession, the fall in employment in manufacturing continued until 1987, since when it has stabilised at around five million.

Conceptualising the Youth Labour Market

Throughout the course of the research reported in this volume we have attempted to explore a number of such general ideas about the structure of the youth labour market, which are prevalent in the literature and assess their adequacy in the light of our research findings. Cyclical and structural theories provide radically different ways of conceptualising change in the labour market. Similarly, neo-classical economics and segmentation theory provide different interpretations of the structure of the labour market. In engaging in the two-way traffic of which Elias speaks, our primary task has been to establish the general applicability or otherwise of the various models and to modify them, where necessary, in accordance with our observations of specific events.

The Youth Labour Market and Social Policy

In this final chapter we address two major policy issues. The first is the problem of youth unemployment which has been characteristic of many of the economies of the West throughout the 1980s. Our analysis suggests that in spite of the projected decline in the number of youths entering the labour market it is premature to regard the problem as having been solved in Britain. While the degree of mass school-leaver unemployment has been reduced, the problem of youth unemployment has been transformed into the systematic exclusion of large groups of young adults from effective participation in the labour force. This is a problem which requires a very different policy response. The second issue we tackle is that of training. The introduction of large-scale training programmes has been one of the weapons used to ‘solve’ the problem of school-leaver unemployment. Yet our analysis suggests that by hurriedly imposing a national training scheme the Government has unintentionally reinforced a national system of training which is inappropriate for an advanced industrial society. What it has done is to fossilise a system of training which was developed for labour-intensive industries, but which is at variance with the underlying structural changes that we have identified.

The Segmentation of the Youth Labour Market

In this chapter we move on from the analysis of broad structural changes to an examination of how they affect the work histories of young adults, that is, the movement of young people within the labour market and their experience of it. Throughout this aspect of our research the focus has been firmly on placing individuals within structured work histories rather than merely identifying them by occupation. As we have seen the pressures of labour market segmentation are currently creating major structural changes in the labour market. In order to establish their impact on the way in which young people experience employment we need to distinguish between changes which affect the relative size of the various segments and changes which affect the composition of the jobs which comprise the segments. With regard to the former, we have already seen how the proportion of apprenticeships available to males has shrunk and how the proportion of white-collar, especially professional, technical and administrative jobs, has increased. Similarly, for females we have noted how the proportion of clerical jobs has declined and the proportion of semi-skilled and unskilled service sector jobs has increased. Because of such changes, the overall configuration of the youth labour market is undergoing a major transformation.

Changes in Labour Demand during the Recession

In this chapter the aim is to distinguish short-term pressures such as seasonal fluctuations in the demand for products, from more fundamental structural changes which will continue to develop beyond the limited period of a business cycle. Our results suggest that four major structural changes are currently affecting employers. Each of these is dealt with separately in this chapter, where it is argued that knowledge of this process of change is essential for an understanding of the contemporary transformation of the labour market.

Structuring the Supply of Workers

In Chapter 3 we identified a number of pressures which operated on employers to determine the number of workers employed. We now turn to a consideration of the factors which influence the supply of labour. In view of our concern with understanding the operation of the youth labour market the emphasis is on the supply of new entrants, especially school-leavers. We argue that the institutional structures which regulate the supply of workers, notably the educational and training arrangements, provide external constraints which influence employers’ recruitment practices and the type of labour recruited for diferent types of jobs.

Determinants of the General Demand for Labour at the Level of the Firm

Having identified how, at the macro level, cyclical and structural changes combine to affect the overall demand for labour, we now move down to the level of the firm. At this level we are concerned to identify the factors which are perceived by managers of employing organisations to affect their demand for labour. Interviews were carried out with senior managers. Within a capitalist economy it is a precondition for the long-term viability of a firm and the employment it sustains that it remains profitable. Against this background the results of the interviews pointed to a number of inter-related factors, which can help determine the numbers employed. The major factors which will be discussed in this chapter are: (i) the product market; (ii) the actions of the state; (iii) the employment-output relationship; (iv) wage levels; and (v) ownership. At the outset it is important to stress the complexity of the relationship between these factors. For example, their relative weight can vary from firm to firm, even within the same industry. Also, as employers are operating in conditions of uncertainty then the relationship between the factors tends to change over time. Our attempt to point to what we believe to be the main factors impinging on different types of employers inevitably leads to an oversimplification of the complexity of the situation. Nevertheless, it provides an appropriate framework within which to address the central issues.