Chapter 2:
Employment and Unemployment


2.1 In the years since the first Fair Employment legislation in 1976, the Northern Ireland economy has seen significant changes, as have comparable regional economies in the rest of the United Kingdom and the European Union. Traditional heavy industries have suffered decline, while the service sector has grown. Globalisation has increased the influence of multi-national employers in the local economy. Northern Ireland must compete for inward investment with many other parts of the world. The labour force has also changed. Demography has swelled the numbers of people entering the job market, women now participate in the economy on a scale never before seen and more flexible patterns of working have emerged with greater numbers of part-time employees.

2.2 These changes have created new opportunities for people with marketable skills and who are adaptable to the needs of the labour market. They have also, however, forced readjustment, often painful, on those with fewer skills and who might in the past have hoped for a lifetime career in traditional industry.

2.3 Attitudes to the role of Government in the economy have also changed in this period. It is now widely accepted that the motor for economic development must come from the private sector. The European Union limits the direct financial assistance which can be given to industries by the State. In the long term the free market offers the best opportunities for sustainable employment and growth. This is the economic backdrop to this paper's consideration of future directions in employment equality. In defining policies for the new Millennium, it is essential that they address the challenges of the future, not the past.

2.4 SACHR rightly suggests that, while there are still imbalances in employment, there is considerable evidence that these are rapidly reducing and that the main area of concern is now unemployment. The Government accepts this analysis and this chapter sets out its proposals to deal with unemployment and community imbalances within the unemployed.


Impact of the 1989 legislation on those in employment

2.5The Fair Employment (NI) Act 1989 imposed requirements on all but the smallest employers to monitor the community background of their workforce. Larger employers also had to collect data on applicants and appointees in recruitment competitions. The primary purpose of these data is to assess fair participation within individual companies, and thus to determine whether affirmative action measures might be necessary. An important secondary effect has been the generation of a large amount of monitoring data which, when aggregated, gives a reliable, annually updated picture of Catholic and Protestant participation in the monitored workforce and of those entering employment. Contemporary analysts of employment equality are therefore much better informed than their predecessors who, until 1990, had to rely essentially on decennial Census returns and sample surveys.

2.6 In "Employment Equality: Building for the Future" SACHR has examined the monitoring data which the Fair Employment Commission publishes annually and has assessed the impact of the 1989 legislation on the employed workforce. The analysis of appointments by larger firms shows that the Catholic share of applicants has increased in the public and private sectors, and among both men and women. The statistics demonstrate a good match between the proportion of Catholic applicants and appointees, though there are some minor annual variations. SACHR concluded that there is "no evidence that either community is experiencing systematic discrimination at the point of selection[1].

2.7 SACHR also examined participation levels by the two main sections of the community in the monitored workforce, where they found that the Catholic proportion had increased from 33% in 1990 to 36.4% in 1996. The percentage increase was greater in the private than the public sector. The increase in Catholic participation was greatest in certain occupational sectors - management and administration; professional; and sales. These were also the occupations which had seen the fastest growth in size in this period [2]

2.8 These statistics are important as they suggest that Catholic and Protestant job applicants have similar chances of obtaining employment in monitored concerns. They also demonstrate consistent progress towards a more representative workforce, with employment levels for Catholic females coming close to achieving fair participation. Despite this, there is still some way to go before Catholics achieve fair participation at all levels of the workforce. The progress that has been achieved is due in part to social factors, such as demographic changes and higher levels of educational qualifications and skills among Catholic job applicants. But the Government strongly endorses SACHR's conclusion that "legislation, notably the 1989 Act, has had a positive impact on employment equality" [3].


The unemployed and the labour market

2.9 In assessing equality of opportunity in the labour market, it is not enough to look at those who are in work. High rates of unemployment have always been a depressing feature of the Northern Ireland economy. In recent years the position has improved considerably. Seasonally adjusted unemployment in December 1997 was 60,200 (7.8% of the workforce), while the comparable figure at the end of 1996 was 74,300 (9.7%); the numbers of those who had been unemployed for over a year fell in the same period from 39,218 to 26,887, a decrease of 31% [4]. Experience shows, however, that there is a hardcore of long-term unemployed people who, through lack of skills, experience or motivation, find it particularly difficult to avail of job opportunities, even when the labour market is expanding. Location also plays a part. In December 1997 three travel-to-work areas, Londonderry, Newry and Strabane, had over 10% of their workforce unemployed. Moreover, there is a further significant group of people who wish to work but are not actively seeking work, and so are not included in the figures above.

2.10 The Government believes that everyone should have an opportunity to play a productive role in the economy. Unemployment is a major contributor to poverty and the result of unemployment is usually welfare dependency. Tackling this problem will present challenges to Government, employers and the unemployed themselves.


Creating job opportunities for the unemployed

2.11The most effective generator of sustainable new jobs is economic investment by the private sector, whether through inward investment or the growth of local businesses. It is the role of the Department of Economic Development (DED), through its agencies, particularly the Industrial Development Board (IDB) and the Local Enterprise Development Unit (LEDU), to encourage this job creation. As part of DED's Targeting Social Need (TSN) strategy, IDB and LEDU set targets for job creation in designated disadvantaged areas. IDB offers increased grant levels for inward investment in such areas. For several years it has built advance factories only in these areas. In introducing potential investors to possible business locations, IDB sets targets for initial visits to disadvantaged areas. The SACHR report suggests that IDB's definition of disadvantaged area is too wide and that a more targeted approach should be applied. Others have criticised the scope of IDB target areas on a variety of grounds. The Government accepts SACHR's recommendation of a public review of IDB strategy in relation to target areas and proposes to take this forward as part of DED's current review of economic development strategy and also in its triennial review of TSN strategy, scheduled for 1998/99. SACHR's suggestion of research into the merits of additional special incentives for business location in areas of very high unemployment is also accepted [5].

2.12 Employers, of course, have the primary role in creating job opportunities for the unemployed. Employers who wish to recruit only from the unemployed, or reserve a proportion of vacancies for them, may be deterred by uncertainty about whether this might constitute unlawful indirect discrimination, given the disproportionate Catholic representation among the unemployed. The Secretary of State has already indicated her intention to clarify the law in this respect. It is now proposed to amend the Fair Employment and race relations legislation to clarify that an employer will not be liable to complaints of discrimination by seeking to recruit only from those not in employment, or only from those who have not had a job for a given period. European Union law means that it is not possible to provide similar protection against claims of gender discrimination. Indirect discrimination in this respect should be avoided if recruitment is from the ranks of those not in employment (rather than from those claiming benefits, where males are disproportionately represented). It is recommended that employers wishing to avail of this opportunity should take prior advice from the Fair Employment Commission, the Equal Opportunities Commission for Northern Ireland and the Commission for Racial Equality (NI). It is not proposed that an employer should be obliged to undertake recruitment of the unemployed as part of an affirmative action programme to redress religious imbalances within his workforce, although he may choose to do so. Moreover, the FEC will be given a role in advising the Government on measures which it might introduce to reduce the number of, or religious imbalance in, the unemployed and in advising employers on recruitment from them. The Government will change the Fair Employment legislation to permit the FEC to fulfil this role.

2.13 The SACHR report recommends that the Government should use its spending power to influence employers to recruit from the unemployed, by including terms in public sector contracts with this requirement (often known as "contract compliance") [6]. This is an area where European Union law on public procurement imposes considerable restraints on the Government. The European Union has regarded the liberalisation of public procurement as an essential element of the Single Market, with economic benefits flowing from the operation of a Union-wide procurement free market. The European Commission Communication of 1989 on social objectives in public sector contracts allows only limited scope for applying conditions on the recruitment of the unemployed [7]. Furthermore, the general policy of the UK Government, which has been consistently applied, is that public sector procurement should not be used as a means of achieving social policy objectives. The following paragraphs set out the incentives which the Government is providing to encourage employers to recruit from the long-term unemployed under the New Deal. It is in the best interests of private sector employers to participate fully in the New Deal as a positive contribution to their local communities and the long term health of the economy. This, rather than contract compliance, should be the primary incentive for the private sector to recruit from the long-term unemployed. However, its effectiveness will be closely monitored to see whether it needs to be supplemented by further action in Northern Ireland.


The New Deal for the Unemployed


2.14 The Government's most direct strategy for tackling long-term unemployment will be the New Deal which will become operational throughout the United Kingdom from April 1998. In Northern Ireland some £140m in additional resources will be made available over the next five years for this initiative. It will be targeted at two groups - the young unemployed between 18 and 24, claiming benefit for more than six months; and claimants of 25 and over who have been unemployed for more than two years. During 1998 New Deal for lone parents and people with long-term sickness and disabilities will be implemented in line with the National Strategy. Particular attention is paid to the young unemployed, with a view to breaking the pattern of long-term unemployment before it is fully established. The starting point for New Deal participants will be the Gateway service which will provide each individual with advice, counselling and guidance and, if necessary, initial training. If the young person does not obtain employment during "Gateway", this will be followed by one of four options:
  • a subsidised placement with an employer;

  • an approved full time training or education programme;

  • work experience with a voluntary organisation; or

  • work on the environmental task force.
Support for the older long-term unemployed will be focused on the subsidised employment placement. The employer's subsidy will continue for up to 26 weeks. The target group for the New Deal in Northern Ireland is some 35,000 unemployed people, comprising 17,000 18-24 year olds and almost 19,000 older long-term unemployed. It is envisaged that all of the 18-24 year olds and approximately 15% of the long-term unemployed target group will access New Deal opportunities. It will constitute the most ambitious initiative ever undertaken in Northern Ireland to help unemployed people make the transition from welfare dependency to productive employment. It will meet many of the objectives of SACHR's recommendations on affirmative action for the unemployed [8].
2.15 In the context of the New Deal, the role of the Training and Employment Agency's (T&EA) Employment Service and its interface with Social Security Agency client advisers is being examined. Both Agencies will strive to ensure the most effective advice and support to those seeking work. However, the T&EA cannot guarantee a minimum number of job interviews annually for each unemployed person[9]. The Agency has a responsibility to prospective employers to ensure that the most suitable applicants will be put forward for a vacancy. Arranging an excessive number of interviews, simply to fulfil a quota, will benefit neither employer nor applicant, and would be resource intensive. Focusing on the particular requirements of the individual job seeker is a more effective approach and is integral to the New Deal.

2.16 The availability of affordable childcare is one factor in allowing parents to avail of job opportunities. The Government is committed to ensuring that every lone parent has access to out of school care in their community and has launched the New Deal for Lone Parents to help achieve this. It is also committed to expanding pre-school education and is providing resources for additional quality part-time places. Nursery education, afterschool and childcare places have been created under the Making Belfast Work and Londonderry Initiatives, and the European Union Special Support Programme for Peace and Reconciliation. T&EA is working in partnership with PlayBoard to provide out-of-school play opportunities for the children of parents at work or in training. Tax relief for employees' childcare costs is currently under consideration on a national basis in the context of the National Childcare Strategy.

2.17 A further factor which can determine access to job opportunities is transport, particularly for unemployed people who may not have access to a private vehicle. A recent Discussion Paper on future regional development strategy, published by the Department of the Environment (NI), addressed the new challenges of long term planning for Northern Ireland, including the issues of communal division and equality of opportunity. It proposed a number of regional goals, among them improving communications by providing reasonable accessibility for all members of the community to the full range of resources, services and opportunities. One aspect of this would be the encouragement of a closer relationship between the location of new development and public transport services[10]. DOE will also discuss with the Northern Ireland Transport Holding Company how, at the practical level, transportation planning can improve access to job opportunities for all sections of the community.

2.18 Unemployed people seeking work may be discouraged by low pay rates. The Government does not believe that employers should be allowed to pay excessively low wages. That is why it is committed to a minimum wage and has appointed the Low Pay Commission to advise on its level.


The unemployment differential


2.19 Unemployment affects people irrespective of their community background. All those affected are socially disadvantaged and deserve the assistance and encouragement of Government agencies to find productive work. In carrying forward the policies outlined. above, the Government is opposed to discrimination between unemployed people on the basis of their community background.

2.20Yet the fact that Catholics are disproportionately represented among the unemployed, particularly the long-term unemployed, cannot be ignored. Data from the 1991 Census showed a ratio of 2.2 between the percentages of Catholic and Protestant male unemployed and of 1.8 for female unemployed. This has become a key issue in recent decades when equality of economic opportunity in Northern Ireland is discussed. While there is broad agreement among experts about many of the factors which underpin the unemployment differential, the extent of the role which discrimination may have played remains the subject of considerable debate and few would disagree that the causes of the differential and the reasons for its persistence are complicated. It is also apparent that the persistence of the unemployment differential is not a valid indicator of the success, or otherwise, of Fair Employment legislation. It is, though, an indicator of Catholic socioeconomic disadvantage. The Government cannot be neutral on this differential. Any developed economy will contain those who are economically advantaged and those who are less advantaged. However, when there is a correlation between the least advantaged sections of a community and a particular religious or racial group, such inequality is unacceptable.

2.21 The Government's approach in recent years to socio-economic differentials between the Catholic and Protestant communities has been based on the Targeting Social Need initiative. This aims to assist people and areas objectively identified as being in greatest social need, without regard to whether the beneficiaries are Catholic or Protestant. However, given the higher levels of disadvantage in the Catholic community, it is anticipated that, over time, the communal differentials will be eroded. These principles will continue to guide the Government's policy on the unemployment differential. Not all of the factors determining the differential are within the Government's control but the measures outlined above, particularly the New Deal and childcare initiatives, together with the proposals in Chapters 3 and 4 below, should reduce the levels of long-term unemployment and, with them, the ratio between the percentages of Catholics and Protestants who are unemployed. The statistical mechanisms which generate this ratio are complex and theoretical modelling shows that it can be maintained, or even increased, in circumstances where unemployment is decreasing in both communities. The Government proposes to develop its information sources on the community background of the unemployed and, in particular, will investigate the feasibility of modelling claimants' community background using data from administrative sources. This would provide a frequently updated source of information on the impact of unemployment on different sections of the community and would supplement the information available from existing sample surveys and the decennial Census.

2.22 Government alone cannot reduce the unemployment differential. It also requires practical action and attitudinal change on the part of employers, educators and the unemployed themselves. To assess the rate of progress, the Government proposes to commission the FEC (or a new Equality Commission, if the proposals in Chapter 4 in this respect are accepted) to agree with the representatives of employers, employees, political parties and other interests, benchmark measures for the future reduction of the unemployment differential, informed by up-to-date professional analysis. The views of interested organisations and individuals are invited on what these benchmarks should be and the time period to which they should relate. The next review of employment equality (see below para 6.7) should consider any deviations between the benchmarks established and the available data. The Government believes that the policy proposals in this White Paper, together with social and economic change in the next decade, will lead to a substantial reduction in both the male and female unemployment differentials which should be evidenced by the time of the 2011 Census.

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Notes:
[1] SACHR - Employment Equality: Building for the Future (HMSO. cm 3684, June 1997), p11.
[2] SACHR, pp 13-16.
[3] SACHR, p17.
[4] Monthly Unemployment Statistics (Department of Economic Development, 14 January 1998). The unemployment statistics in this paragraph refer to the claimant count, ie. those claiming Job Seeker's Allowance and related benefits.
[5] SACHR, p31.
[6] SACHR, pp 28-29.
[7] Public Procurement: Regional and social aspects. COM (89) 400 (European commission communication, 22 September 1989).
[8] SACHR, pp 27-31.
[9] SACHR, p29.
[10] Shaping Our Future: Towards a strategy for the development of the region (Department of the Environment for Northern Ireland, November 1997).

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