Trump could learn UK lessons on jobs growth

23 Jan 17

President Trump can learn from Britain as he aims to fulfil his promise of being “the greatest jobs producer that God ever created”, the Resolution Foundation think-tank argues today.

The organisation’s You’re Hired! report compares labour market performance in the US and the UK in recent decades. While parallels are often drawn between the two countries’ political situations, the report argues that their economic performance “is much less similar than the political changes imply”.

It found that since 2008, US income growth has been driven by pay, whereas in the UK it has been underpinned by rising employment, now at a record high of 74.5%. The UK’s income growth has been “stronger and more equally shared”, said the report.

In a statement, the foundation said that: “if the US had the same employment rate as the UK, 11 million more Americans would be in work”.

Employment in the US is 3 percentage points lower than it was before the financial crisis in 2008. The report identifies a fall in labour market participation (which measures how many people are either in or looking for work) as one of the long-term trends behind this.

The report noted that the differing labour market performance in the two countries has impacted on their levels of inequality. This has remained broadly stable in the UK since the 1980s, but has continued to rise in the US.

While Trump has focused on reviving traditionally male employment sectors such as manufacturing, the think-tank says that there are “even bigger job gains to be made by helping more women into work”.

The report highlights three areas of policy success in the UK over the past 20 years that it believes the US should consider emulating. These are encouraging people into work by tying unemployment benefits to job searching, training and support, “making work pay” through tax credits and a higher minimum wage, and supporting female workers through maternity leave and childcare support.

Discussing the economic situation in the US, Torsten Bell, director of the Resolution Foundation, said: “A country once envied around the globe for its employment performance now simply has too many people left out of the world of work, hitting incomes and driving up inequality.”

Bell said that there was nothing inevitable about these trends, arguing: “If Donald Trump wants to deliver on his promise to be ‘the greatest jobs producer that God ever created’, learning some of the lessons of the UK’s experience would pay more dividends than building walls or reducing trade.” 

Daniel Tomlinson, a researcher at the think-tank who wrote the report, said Trump could learn from UK policies including higher minimum wages, tax credits and childcare support.

“These pro-employment policies have the added benefit of helping to tackle inequality – another pressing issue that the new president faces,” he said.

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