Kevin Rowan

Nov 20 2006 By Kevin Rowan, The Journal

The labour market in the UK is essentially organic and dynamic, the world moves on, economies move with it and labour markets must respond accordingly.

This, combined with a zealous inclination for flexibility among some of the labour market influencers, contributes to a significant growth in what the TUC call `vulnerable' workers, which now account for 20% of workers in the UK.

This group includes people on fixed term contracts, casual staff, agency workers and, increasingly, migrant workers. They are generally on different, worse, terms and conditions of employment, not accessing many of the social benefits of employment that their full-time counterparts enjoy; they are much less likely to be covered by collective bargaining arrangements and are much more likely to be frequently out of work.

Critically, they are highly unlikely to participate in any kind of training or skills development. As they are with employers for only a short period of time with little likelihood of longevity of employment, that employer is understandably unprepared to invest in their skills development.

As they themselves are in intermittent, precarious employment, with all of the vulnerabilities of unpredictable income associated with that, they are unlikely to be in a position where they invest significantly in their skills development.

There are clear advantages of this kind of flexibility in the labour market; employers are able to cover peak periods of demand or long-term absences. For workers too there can be advantages; young workers or those with caring responsibilities often don't wish to commit to full time, permanent employment.

I don't challenge the need for some labour market flexibility, although I do fail to understand the need to pay workers less and to minimise their rights at or benefits from work. But the absence of investment in and development of this growing section of the labour market is a worry.

At the North East Economic Forum on Friday of last week, in the current Regional Economic Strategy and in all the thinking shaping Learning and Skills Strategies, investment in people is identified as one of the areas with significant, ongoing returns that don't show depreciation; it is one of the best things we can do with public money.

I believe the North-East and the UK in general is getting its act together. But there appears to be no public policy intervention specifically targeted at this issue.

Without some response which effectively enables people to develop skills, the main public and private sector investment will focus on people already in work. That will mean vulnerable workers will become more vulnerable in a polarised labour market; a problem for us all in the long run.