6.7.8.2 Steering New Employment Opportunities
As jobs are lost in a local area, there is a need for steering new employment opportunities to areas in need
The economic changes that displace some jobs create demands for different kinds of work, but these won’t just emerge in the right places without suitable encouragement. Targeting and boosting new employment opportunities in the areas most affected requires the right mix of financial incentives, planning permissions, infrastructure, and training programmes. It is important to act quickly, so that people don’t get used to being unemployed and drop out of the available workforce.
National governments in a democracy can make a strong argument for compensating the areas severely affected by social and economic change. If a country benefits from a growth in GDP, it should be able to justify the use of increased tax revenues to address the problems of those who have lost out – by providing funding to enable the relevant local authorities to respond to people’s needs. This argument should be clearly communicated, to convince taxpayers that it is an appropriate use of their money and to convince those in need that they will receive help.
Some large new employment opportunities are described below in four broad groups: investment in green energy generation, adaptation to climate change, automation, and infrastructure development and renewal. There are global opportunities in all four categories, although the priorities will be different in developing economies (3.5.8.2).
As described earlier (3.5.7.4), green energy investments represent an enormous economic opportunity, whilst also helping to address the problems of climate change. The Launch Report for the Resolution Foundation study into revitalising the British economy, The U.K.’s divisive decade, hints at the resulting employment opportunities:
“the UK needs urgently to accelerate an unprecedented process of decarbonisation if it is to meet its Net Zero commitments in 2035 and 2050.”
…“If we are to hit the 2050 Net Zero objective and realise the wider benefits, while avoiding huge economic costs, there must be a surge of progress in the 2020s: we need to move, for example, from installing almost zero heat pumps each year, to installing 3,000 every single day by 2030.”
The invasion of Ukraine has increased prices of fossil fuels and has thereby increased the incentive to transition to green energy. And governments are subsidising the introduction of new technologies. As reported by the Economist, War and subsidies have turbocharged the green transition: “They may have knocked as much as ten years off the timeline”.
Investment will be needed to adapt to climate change (3.5.7.3). There is a widespread need for flood defences, for example. These provide job opportunities in the construction sector.
Existing industries in high-wage economies are at risk from globalisation: jobs moving to countries where labour is cheaper. Governments can encourage businesses to install automation to remain competitive (3.2.8), rather than lose the jobs to other countries.
Governments need to provide infrastructure for an economy to operate efficiently (3.2.3.2). It is a high-profile political issue in both America and Britain (and elsewhere):
● As an illustration of the bargaining on Joe Biden’s American Jobs Plan, AP reported that GOP senators ready $1T infrastructure counteroffer to Biden. It noted that ”the administration and the GOP senators remain far apart over the size and scope of the investment needed to reboot the nation’s roads, bridges and broadband — but also, as Biden sees it, the child care centers and green energy investments needed for a 21st-century economy. They also can’t agree on how to pay for it.”
● In Britain, The Conservative and Unionist Party Manifesto 2019 used promises of infrastructure to attract voters. It asserted that “Our plan to upgrade infrastructure will make it easier for businesses to operate – to move goods about the country and to connect to customers around the world via gigabit broadband” [p.32].
New employment opportunities are being created all over the world, mostly by private companies. Politicians have an active part to play, though, in steering new employment opportunities for the common good:
● They can introduce regulations to insist that all new buildings and vehicles are constructed to the required environmental standards (3.3.1.5).
● They can introduce incentives for people to order new environmentally-friendly vehicles, and to install insulation in their houses, for example.
● They can speed up major projects by providing planning permission where needed.
● They can fund retraining programmes, to give people the necessary skills to move into new jobs.
● Investment grants, research grants, loans, and tax allowances can all be used to encourage companies to invest in the areas most in need of new jobs.
Most of the above activities require government funding, but they can also be considered as investments in economic growth – which increases tax revenues. As former chief economist Andy Haldane explained, in the Sky Television interview cited in the previous sub-section: “Austerity is not the route to solving even a fiscal problem, ..As far as I can tell, there has not been a country in human history that has seen growth pick up at the same time as public investment has been falling as a share of national income”.
This page is intended to form part of Edition 4 of the Patterns of Power series of books. An archived copy of it is held at https://www.patternsofpower.org/edition04/6782a.htm.