As we move towards the budget we will be hearing more and more warnings about the impact of further cuts in public sector employment. One line, pursued repeatedly by the TUC and the Fawcett Society since Mr Osborne’s first budget, is that such cuts will particularly impact on women. As the public sector employs more women than men, it is argued, the cuts mean higher unemployment for women. It has even been suggested that an Impact Assessment along these lines would conclude that public sector cuts breach the Equality Act.
I don’t know about that. But it is worth pointing out how difficult it is to assess the impact of public sector ‘cuts’ on unemployment.
First, the definition of the public sector (which includes commercial banks which the government has taken over, but does not include universities) is constantly shifting as work is contracted out or taken back in house. One big change last year was that 196,000 further education college jobs were reclassified as private sector, even though they are very largely publicly-funded.
Second, you have to bear in mind that people leave jobs all the time for a variety of reasons. Annual turnover rates (conventionally defined as the number workers leaving during a year divided by the average of employment at the beginning and end of the year) are between 10-15 per cent in the public sector even in normal times. A high proportion of people leaving jobs do so by choice — they get new jobs, they retire, they have babies, they emigrate, they win the lottery. Others leave, sadly, through illness and death. Turnover rates are typically higher for women than men. If these jobs are not replaced, public sector employment falls but it is not at all clear that unemployment rises.
Third, voluntary redundancy accounts for more of the ‘cuts’. In my experience, the opportunity for voluntary redundancy usually attracts large numbers of people eager to go, many of whom have alternative job prospects already lined up or are happy to leave the workforce. Indeed the apportionment of voluntary redundancies can itself raise equality issues: I once had a female member of staff claim discrimination because she wasn’t allowed to take redundancy when we were happy to let a rather less competent male colleague go.
Again unemployment need not rise as a direct consequence of voluntary redundancy. Involuntary redundancy is more problematic, but a significant proportion of those made redundant against their wishes find new jobs quickly, retire or enter self-employment. They certainly do not all become unemployed.
The redundancy rate for women remains much lower than that for men.
Incidentally, redundancy rates in the public sector since the coalition came to power have, so far at least, been comparatively low (3-4 per thousand — around a third of those in the financial, transport and construction sectors). These latter industries are heavy employers of male rather than female workers.
Leaving aside the fate of those former public sector workers who leave their jobs, is it not the case that a decline in public sector jobs must mean higher unemployment as new entrants to the labour market find fewer opportunities? This depends on how fast the private sector can create new posts to offset the public sector ones which have disappeared. And, thankfully, the record shows that the private sector has been up to the challenge. But how have women fared?
Look at the most recent figures for October-December 2012 and compare them with October-December 2010, when the public sector cuts were beginning to bite. Over these two years the number of men in work (whether in the public or private sector) rose by 289,000 while for women it rose by 320,000.
When you consider that there are fewer women in the labour force then men, this absolute difference is accentuated. Women have done significantly better than men.
Nor was this just part-time work. If you look at full-time employment (public and private together again), for women it rose by 218,000. Though men’s full-time employment rose by 239,000, they have historically had a far higher proportion of full-time workers than women. What these figures mean is that women’s share of full-time employment has risen (very slightly) over this two-year period.
And on top of this, the unemployment rate for women (in contrast to most European countries) remains lower than that for men.
So this all looks to me like women are not, in relative terms, the losers. Of course we can’t tell from this the quality of the new jobs — the level of pay and so on — that women are taking. But the case for saying that women have fared worse than men in the austerity labour market is difficult to make on the basis of the data.
If we want to debate the most appropriate policy for the Chancellor to undertake, let’s do so without dragging in accusations of discrimination which cannot be stood up.
Len Shackleton is a fellow at the Institute for Economic Affairs.
Give the perfect gift this Christmas. Buy a subscription for a friend for just £75 and you’ll receive a free gift too. Buy now.