Setting Targets for Unemployment Reduction and Employment Creation

by ALTMAN, M., 2006
Human Sciences Research Council report prepared for the EGDI Employment Scenarios reference Group Session, November 2006

“Altman translates ‘halving unemployment’ into concrete targets for unemployment and employment. Reducing unemployment and expanding employment do not necessarily involve the same policy complements. Reducing unemployment depends not only on job creation, but also on the pace of labour force growth. Therefore targets are needed for growing employment and reducing unemployment. This discussion paper outlines the broad bands for employment creation and unemployment reduction that will form the backdrop for the building of scenario scenarios. It finds the following:• For unemployment to be halved between 2004 and 2014, the unemployment rate would need to fall from about 26% to 13%. • To halve the strict unemployment rate, about 4.9 million net new jobs would be needed, and 6.79 million to halve broad unemployment. • The quality of work needs consideration; the current definition of ‘work’ is not onerous. • The unemployment rate is not the best measure of how non-participation affects welfare, because it reflects both non-participation and whether an adult is looking for work at a specific time. Two alternative measures may be better: the ratio of those who are ‘not working’ to the working-age population (35%) and the ratio of the population to those that are not working (2.8 people depend on one working person). “