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Deindustrialisation Can Kill a Region

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Interesting numbers released by the Guardian recently, concerning the areas of the UK with the highest number of graduates. After a quick look and some unscientific cross-referencing, what seemed most apparent is that those areas with the fewest graduates also had the largest number of people claiming some sort of unemployment benefit. Stick with me, this post isn’t going to concentrate on the UK. The point I have to make can be applied to all run-down areas.

Many of the places with scarce graduates and a high benefit claimant ratio happen to be in my neck of the woods, and having lived here for a number of years, I think I can explain why. Despite there being three universities in the city, and several others within commuting distance, you’d think that even these areas would be awash with qualified people, but it isn’t the case. In fact, in some areas over 25% of people have no qualification at all. That isn’t just no degree, that’s no evidence of having completed any sort of formal education. A couple of generations ago, this wouldn’t have mattered: there was plentiful unskilled work in the factories, and the opportunity to train towards a professional qualification while on the job. Then, even somebody with a primary school reading level stood a good chance of pulling a wage decent enough to support a family.

Today, the factories that provided those jobs are largely gone or in the process of downsizing. People who have spent their entire working lives at the same firm now don’t have anywhere to work and may not have easily transferable skills. As the jobs have disappeared, so to have the training opportunities. At the same time, as a greater number of graduates have entered the job market with degrees, jobs that had previously been open to those willing to learn on the job are now out of reach, as they advertise for better qualifications.  This leaves those without the requisite qualifications at a distinct disadvantage, and up against some very stiff competition when they do apply for jobs.

To exacerbate the situation, in these areas, which have previously been heavily industrialised, there has traditionally been a lack of graduate-level jobs. So, historically graduates will have migrated away from the area to look for work. Hence the population of graduates will have always been low, meaning that graduate employers, who tend to offer better-paying jobs, will have been unlikely to base themselves in the area. So the areas lose not just their factories but also their graduates, leaving a relatively unskilled population with few employment prospects. And unless action is taken, the situation gets worse with each subsequent generation, with grandparents, parents, children, and now grandchildren more used to those around them being out of work than in employment.

Local government can always try to remedy the situation: they could offer tax breaks to employers willing to base themselves in the area, offer bonus payments for each previously-unemployed person they take on, build new business parks and offices. But this is only part of the solution. In addition to completely overhauling industrial zones when companies move away, the local population must also receive attention. A previously manual unskilled workforce will not become the battery chickens of a call centre or data processing hub overnight: people need training, supplementary education and encouragement to enter an industry sector they have previously never considered before. Otherwise potential employers will find it only too easy to say that they would love to move in but can’t find any suitable candidates for the jobs they offer.

At an individual level, it’s tempting to see the situation as one of “Get educated, then get out,” but this overlooks all those who are left behind. Not everyone can or wants to go to university to get a degree, and not everyone can make the decision to move where to where the jobs are. Something has to be done with them, or you are condemning entire communities to the scrapheap, in some cases entire towns.

If you don’t want to get to the point where  housing as cheap as $1,250 won’t convince somebody to move to an area due to the lack of prospects, there needs to be some sort of post-industrial strategy to take up the slack left by the disappearance of the factories. Currently Detroit, swathes of northern England and the Midlands are dealing with this problem. In the developing world, the factories weren’t there to begin with, but there are still populations that need to be kept occupied. The alternative is social breakdown, crime and civil unrest. It’s a wonder that our leaders haven’t taken this point on board while they are busy plotting the so-called economic recovery.

[Image by Unbowed]

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1 Comment

  1. Godfrey says:

    I disagree that there were no industries in Africa. Just think of all those people in Kenya who used to work for KICOMI, RIVATEX, East African Industries, Kenya Railways, Unga, Colgate Palmolive, etc, etc. They may be a tiny proportion of the overall population but they continue to suffer the effects you describe above, that is, redundant skills, dying neighbourhoods, etc, etc.

    The issue we have in Africa is that of the loss of government jobs. From independence until the late 1980s, government including here in Kenya used to be the biggest employer. This stopped in the 1990s due to structural adjustment programmes and liberalization. However, the society still hasn’t changed its mentality from looking for white-collar government jobs. You have too many qualified graduates looking for too few state jobs.

    When scarce employment combines with political ethnicity as we see in Kenya, then it creates mistrust because each tribe thinks the others are getting a better deal.

    So what’s the solution? There needs to be a strategy to educate people on making better use of the opportunities brought about by liberalization and globalization. The era of big government isn’t coming back any time soon.

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