Rebuild the local economy: prioritise labour-intensive sectors, difficult to automate, impossible to relocate abroad

Colin Hines, co-founder of LWM and convenor of the UK Green New Deal Group, comments on the Guardian’s recent editorial on productivity and robots which ‘repeated the cliché that automation does cost jobs, but more are created’.

He says that the problem with this is that the new jobs are frequently in different places from where they are lost and require very different skills, hence exacerbating the problems for the “left behind”.

Also unmentioned was that just as automation is starting to really bite, the world faces a strong possibility of another serious credit-induced economic downturn, from China to the UK and a perfect storm of domestic unemployment soaring and export markets falling, as happened after the 2008 economic slump.

The answer to these problems has to be a shift of emphasis to rebuilding the local economy by prioritising labour-intensive sectors that are difficult to automate and impossible to relocate abroad.

Two sectors are key:

  • face-to-face caring from medicine, education and elderly care
  • carbon-reducing national infrastructural renewal.

This should range from making the UK’s 30m buildings energy efficient, constructing new low-carbon dwellings and rebuilding local public transport links.

Funding could come from fairer taxes, local authority bonds in which all could invest, green ISAs and a massive new green infrastructure QE programme.

This approach should become central to all political parties, set out in their next election manifestos because “jobs in absolutely every constituency” is the crucial vote-winning mantra.

 

n

City Growth Commission hopes to enable Birmingham to succeed in the global race for urban growth


At the end of October, a City Growth Commissionsupported by Core Cities – was launched by the Royal Society (see video), aimed at recommending policies to boost economic growth and offer ideas for political parties to consider as part of their plans for the post-2015 government.

 

jim o'neillManchester-born economist Jim O’Neill, its chair, is the retiring chairman of Goldman Sachs Asset Group. Business Desk reports at length that CGC is to develop a practical plan for enabling cities to succeed in the global race for urban growth.

He notes in the Financial Times that many ‘successful’ countries – he lists China, Germany and the US – have a number of vibrant cities but the UK is dominated by London. Research he values finds that cities are at the centre of their countries’ economic fortunes and his yardstick for success appears to be the amount of building taking place – he feels encouraged by an 89% increase in building outside London.

.

Previous ideas to stimulate regional economic growth – special incentives for business and advantageous tax rates – are set aside in favour of other policies, including:

 

  • improved infrastructure – though not planning to take a stance on the merits of the High Speed 2 north-south rail link
  • ominously – labour market flexibility,
  • better education (as in London)
  • and greater involvement of local citizens – a nod to localism?

 

Brummie Bonds?

Part of CGC’s research will look at the pros and cons of giving core cities powers to determine and activate their own funding needs for growth through financing initiatives such as local authority bond issuance.

Signs of change include calls for substantial devolution, and the government’s “city deals”, beginning to deliver more freedom for cities.

 .