Low-paid workers such as cleaners, catering assistants and machine operators are most likely to be on the dole for more than six months if they lose their job, according to research published today which coincides with calls by Labour for more help for small businesses to generate economic growth.
As the TUC published an analysis showing that as unemployment rises and the number of job vacancies falls, a growing proportion of unemployed people are out of work for more than six months, shadow business secretary Chuka Umunna set out plans intended to create jobs.
Umunna is putting forward ideas used by US president Dwight Eisenhower in the 1950s. He reckoned the schemes were "widely regarded as having fostered a wealth-creating enterprise economy for half a century".
Outlining the recommendations by Nigel Doughty, co-chairman of private equity group Doughty Hanson, who has conducted a review of small businesses for Labour, Umunna said the proposals should "take us towards long-term change in the relationship between the world of finance and the real economy".
Among the proposals is a lending organisation modelled on the American Small Business Investment Company programme and a "champion agency" for small and medium-sized enterprises similar to the small business administration in the US, which would be run by an entrepreneur, not a civil servant.
Small business growth has turned into a political battleground, with Labour criticising the Project Merlin deal with banks over lending targets, and the government setting out plans to create a new national loan guarantee scheme to ease lending to small businesses.
Generating small business growth is intended to bolster confidence in the economy at a time when unemployment is rising, with youth unemployment breaking through 1 million and the jobless total in the three months to September hitting 2.62 million, its highest since 1994. More up to date figures are due on Wednesday.
The TUC is concerned that long-term unemployment is hitting some of the lowest paid hardest. Before the recession, the risk of long-term unemployment did not vary greatly between occupations, the TUC said, with one in four unemployed managers on the dole for more than six months compared with one in three who were not in management roles.
The latest research showed those from lower-paid occupations such as cleaners, catering assistants and security guards were faring more badly. Some 46% of unemployed people in this category had been out of work for at least six months. Those from professions had not incurred much change in the time out of work.
"The government must treat long-term unemployment as its top priority. Not only is it a personal tragedy for those who get stuck on the dole, it carries wider social and economic risk too," said TUC general secretary Brendan Barber.
"While the majority of unemployed people are still able to come off the dole within six months, an increasing number of previously low-paid workers are getting stuck on the dole for at least six months and sometimes for over a year," he said.
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