Fascinating

The number of low-skilled workers claiming the dole since the start of the recession has risen eight times more than the level for job seekers with advanced qualifications, official figures reveal.

A wide-ranging analysis of jobs and unemployment since 2008 shows the number of people with little or no skills claiming jobless benefits rose by 4.2 percentage points over the period, compared to just 0.5 points for highly-qualified individuals.

Just what you\’d expect to see from a minimum wage.

Note that I do not claim that this is absolutely caused by the minimum wage: only that it\’s consistent with what we would expect from one. It\’s going to be the low skilled who disproportionately lose their jobs as they\’re the only people who are going to come up against that lower bound of that minimum wage.

6 thoughts on “Fascinating”

  1. So Much For Subtlety

    It is also what you would expect by unemployment benefits being high relative to someone’s wage.

    If you’re low skilled and the only available work is paying less, or not much more, than the dole, you go on the dole. But if you have an advanced education and perhaps with that advanced skills, even if you drop down the food chain three or four notches, you are still much higher up than those on the dole. It is not financially attractive to be on the dole if you’re a doctor.

  2. Minimum wage laws are a blunt instrument. There is actually a way (at least in theory) of getting the advantages of minimum wages without the downside (unemployment). This is to let firms pay ultra low wages (with take home pay being made up to socially acceptable levels by the state), but LIMIT the TIME for which a firm can do this in respect of any given employee.

    This actually mimics a free market: a scenario where there is no unemployment benefit. In this scenario, the unemployed would tend to get unsuitable / low paid jobs for a short while pending the appearance of something better.

  3. My immediate reaction was: “maybe this tells us nothing about the NMW. Maybe recessions always hit the less skilled harder.”
    So why not compare these numbers to the previous recession, when there was no NMW?
    Between Q2 1990 and Q2 1992, the unemployment rate for people with no qualifications rose 3.9pp, from 11.6 to 14.5%, whilst that for degree holders rose 1.8pp, from 2.9 to 4.7%. This is a more equal change than we’ve had this time.
    (Source: Gregg & Wadsworth: The State of Working Britain, p15)
    This strengthens your hypothesis – though it does not prove it; maybe the sectoral effect of this recession bore harder upon the unskilled than the last – though this takes some arguing.

  4. …or from uncontrolled immigration, minimum wage, welfare state and crap educational system that tricks people into “prizes for all”.

    the issue here is not that low-skilled lose their jobs, but that they are unable to rapidly get re-employed.

  5. It’s also consistent with the private sector taking the brunt of the recession. The state doesn’t employ many low skilled people because it’s privatised rubbish collection etc. and has raised the education level of the people it does employ.

    Just guessing, but I wouldn’t be surprised if the state employs more degree holders than the private sector.

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