Workers who move typically get a £2,000 pay rise
Contrary to the popular idea that ever more people move around the UK for work, moving region to change jobs is actually down 25 per cent since the turn of the millennium, with the typical worker that doesn’t move missing out on a £2,000 pay rise as a result, new analysis published today (Tuesday) by the Resolution Foundation has found.
Moving region for work fell to its lowest point in 2010, as the financial crisis made people less likely to take risks with their jobs, but the downward trend in mobility began earlier. People have been less likely to move from region to region since the turn of the century and mobility remains subdued, at 0.6 per cent compared to 0.8 cent in 2000, despite employment and the financial incentive associated with moving for work returning to pre-crisis levels.
In contrast to stories about Millennials being footloose and fancy free, the reduction in mobility has been driven primarily by younger and highly educated groups. The share of people under 35 moving regions and changing jobs has fallen by 20 per cent, and despite population growth similar numbers are moving today as did at the turn of the millennium.
The reduction in mobility for graduates – 1.8 per cent of people with degrees moved employer and region in 2001, compared to 1 per cent last year – coincides with an increase in the number of graduates in non-graduate jobs (which has increased from 31 per cent to 35.6 per cent over the past 15 years).
The proportion of graduates in non-graduate roles also varies throughout the country. Around 63 per cent of employed graduates in the North East studied in the region compared to 52 per cent in the UK as whole, and 40 per cent of graduates in the North East are in non-graduate roles compared to 36 per cent overall. In contrast, the share of employed graduates that also studied in the region is lowest in London, the South East and East and these three regions have the lowest share of graduates in non-graduate jobs.
This decline in regional movement matters for individuals and their families. Last year, the typical earner moving region and job received a £2,000 pay rise premium compared to someone staying put with the same employer. They would have also been £320 better off than someone who moved jobs but remained in the same region. Younger people in particular benefit from moving region for work, with a typical pay rise of 11 per cent for under-30s who move region and employer.
This decline also matters for our economy, particularly given that it means our labour mobility has become more reliant on both migrants arriving in areas where extra labour is most needed but also moving more when here, with international migrants accounting for one-quarter of regional job movement.
The Foundation says that the overall decline in mobility may be in part due to people finding more job opportunities closer to home, which is good news. However if people are settling for jobs they are overqualified for, or if reduced mobility means less efficient matching of workers’ talents and skills to the right firms, that should be of concern to policy makers given the implications for productivity and growth.
Stephen Clarke, Policy Analyst at the Resolution Foundation, said:
“The Norman Tebbit notion that the unemployed should be getting on their bikes and travelling around looking for work is obviously outdated, but our thinking on job mobility in the UK has not really evolved much beyond it. With only ten per cent of those moving regions for jobs previously unemployed, the focus needs to be on why there has been a fall in the share of people already in work moving region and employer, a move that leaves the typical earner £2,000 better off.
“Job mobility matters not just for the individual getting the pay rise but to our economy as a whole. On a basic level that’s about avoiding labour shortages, but more importantly in an economy nearing full employment, ensuring the talent and potential of individuals and firms doesn’t go to waste is essential to boosting productivity.
“But not everyone can up sticks. Alongside encouraging more mobility among the minority of in-work people – such as young people and graduates – for whom it is often more feasible to move, we should be improving thinking on how people can move into jobs they are qualified for without uprooting their family’s lives. That involves thinking not just about progression and employment, but housing and transport too.”