Moving to work


Iain Duncan-Smith's talk of helping people to move to places where they can find work has inevitably conjured up memories of "On yer bike!" (roughly meaning "Get lost!") What Norman Tebbitt actually said was rather different:

"I grew up in the 1930s with an unemployed father. He did not riot. He got on his bike and looked for work, and he went on looking until he found it."

The coalition government will probably do a mixture of making job-creation easier in deprived areas, coupled with making it easier for people to move to areas with better prospects.

The economics of it are complex. It costs a great deal of public money to create a job – many times over what it would cost to help a family to move. That public money is ultimately taken from the private economy, where it could have generated or sustained more jobs than those it was seen to create when spent publicly. People like Ed Balls who call for massive public "investment" in jobs completely overlook the parallel damage inflicted on the private sector by the taxes it takes to do this.

On the other hand, moving families to where there are jobs might well put pressure on infrastructure. There might be extra numbers for schools and hospitals in some areas, as well as more housing needed and more transport on the local roads. The economics are not entirely one-sided, but on balance moving people to jobs is still a lot cheaper than trying to move jobs to people.

Iain Duncan-Smith points to the fact that some people are trapped, unable to move without forfeiting their housing rights, giving Britain one of the most static workforces in the Western world. Economies are essentially dynamic, with new industries springing up to take the place of declining ones, and not necessarily in the same areas. The combination of state welfare and an insistence on national wage rates by trades unions prevents deprived areas from trading on lower labour costs to attract new businesses.

Given this, encouraging mobility of labour seems a fairly obvious and helpful thing to do, rather than an occasion for outburst of pious rage. Helping people to do what they want to do creates opportunities for them to expand their lives, rather than keeping them confined and limited.