Low-paid lose as temps create new wealth gap

The dole queue is getting shorter, and new jobs are being created all the time. Great news for some, but unfortunately the new jobs created, and the new employment prospects people face are deeply divided.

For some, opportunities are growing. But too many people remain trapped in a far more depressing part of the labour market, where economic growth has done little to improve their fortunes.

First the good news. Jobs in professional or managerial fields have gone up by over 300,000 in the last four years. Admittedly a third of them are part time and two-thirds are temporary, contributing to the notion that middle-class job insecurity is increasing. But the reality for those new professional workers is not quite as insecure as the statistics suggest.

For a start, many of those new part-time workers are students trying to get extra cash while they study. And even temporary jobs need not be so bad in the growing fields where professional skills are in high demand.

Take Martin Heaney. Aged 39, he left a job in the property industry to retrain in computers and systems develop- ment. Now he moves from contract to contract, placed by computer consultancies such as Elan, the company that found him his current job at HSBC Asset Management.

The fact that the contracts are temporary doesn't bother Mr Heaney in the slightest: "I was heartbroken when I lost my permanent job, but within a year my salary had more than doubled." He likes the transitory nature of the work too: "Contracting suits me. I've had a number of offers of permanent jobs, but I always say no thank you."

Mr Heaney does indeed get plenty of job offers. During the 10 minutes we spoke, he took a call from another recruitment agency offering him more work. He has taken risks and worked hard to get the skills that keep him in demand.

But the new jobs and the people who get them are not all as lucky as him. Quite the reverse. Many of those who lack his qualifications (or the opportunity to acquire them) are having a bad time in that other world behind the unemployment statistics.

Look at the other boom area for jobs growth: personal and protective services. Translated that means security guards and care-workers, some of the worst-paid employees in the country. And these new jobs are not even numerous enough to replace the jobs lost by low-skilled workers in manufacturing, construction, and clerical work. So for those without qualifications, job opportunities are contracting not expanding.

Even worse, as LSE economist Paul Gregg points out, many of the people in temporary, low-paid jobs, cycle in and out of unemployment, rather than moving on to better jobs. An astonishing 52 per cent of the new unemployment claims last year had been off the dole for less than a year before finding themselves out of work again; 12 per cent of them were back on the dole after less than four weeks in work.

And those that do sign off for good - and contribute to those falling unemployment figures - do not necessarily move into work. Much of the fall in the unemployment rate - particularly for the over 35s - is accounted for by people giving up and leaving the labour market altogether.

The Nineties labour market is becoming more and more unequal. Although many are better off than ever before, for others, employment prospects are becoming ever more grim. For them the so-called employment boom is worlds away.

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