There was an amusing twitter argument between Fraser Nelson and Jonathan Portes Monday evening. For those who missed it, I’ll summarise:
Nelson: There are more people in work than economists ever dreamed. It must be because the government’s welfare reforms are driving people to look for work instead of lounging about watching Jeremy Kyle.
Portes: I have a lot of graphs to demonstrate that’s nonsense.
Nelson: Who cares about graphs?
Nelson: So why is employment so high? If welfare reform isn’t the magic ingredient what is?
Portes: Labour market flexibility. Possibly. To be honest I don’t know.
Nelson: I’ll keep making stuff up about welfare reform, then.
Now I’m no economist, but in the (rather macho) quest for an answer to this economists’ puzzle, I think there’s something these two have missed. Women.
I think Nelson’s right that “something” is pushing more and more people into the labour market, or to look for more hours. But I think Portes is right that it really isn’t welfare reform (for starters, IDS’ flagship welfare reform is Universal Credit which is currently paid to about 12 people and a dog).
The mysterious “something” seems to me to be a quiet, cultural and economic shift in the expectations women have of working. Female employment rates are already well above their 2008 levels, while male employment rates still lag behind 2008. More women are working than ever before.
Why is this happening? A host of reasons. The equalisation of the state pension age (the employment rate of women over-50 is simply soaring). High inflation and stagnant wages putting more and more pressure on stay at home partners to contribute financially. And a significant cultural shift: more and more women simply want or expect to work, and that’s driving up the numbers actually finding work.
Of course, labour markets are vastly complicated and more people wanting work doesn’t necessarily mean those jobs get created. There are a host of reasons for the “jobs miracle” which you will find better analysed elsewhere. But if you’re looking for a missing ingredient, I think you’re a lot more likely to find it in the women of Britain than in the Department for Work and Pensions.
It’s fascinating to me that – in search of the missing ingredient – those on the right have this cultural bias that directs them to welfare reform instead. Large elements of the Right still find it hard to celebrate women in the workplace in any real, economic sense. The Conservative Party has become a lot more socially liberal over the last decade, but would still struggle to salute the idea that women working more than men is perhaps a good thing, or at the very least not a bad thing in and of itself (see this article on Conservative Woman for a particularly laughable attempt to claim that women are ruining the economy by having the audacity to work).
Talking about it as what has helped lead the economic recovery, something that will be the bedrock of their attempt to stay in government post-2015, is hard to envision. This is sad, particularly when one takes into account the amount of women working more is down to the market itself and how it works, something that the Tories should be celebrating.
The reason behind this feels like a remnant of social conservatism in Toryism, and you only have to look at how this plays out on the American Right, where social conservatism hasn’t been jettisoned, to understand the blind eye involved. It is actually the free market that has led to more women in the workplace, much more than any government led initiative. The desire and in many instances the need for two incomes has driven greater female representation in the workplace over the past three decades more than anything else. Again, the free market doing its job should be welcomed by the Right, but instead is talked down about or looked over. It is time for more women in the workforce, working for later into their lives, to be held up as a positive by the Conservatives in Britain. However, I won’t hold my breath.