Distant Voices. The Fate of the MG Rover Workers Three Years on.
(Blogged by David Bailey and Caroline Chapain)
This week we launched our report into what has happened to the MG Rover workers who lost their jobs so suddenly back in 2005. The research was a joint effort by The Work Foundation and the Birmingham Business School and was funded by the Economic and Social Research Council. Richard Burden, MP for Birmingham Northfield, kindly hosted the event in Westminster.
A short webcast summarising the research can be found here. (you need to scroll down and click on 'download swf file').
What we found was that three years on from the historic collapse of MG Rover in April 2005, 90% of workers who lost their jobs have found new employment, but most have taken deep pay cuts.
We interviewed over 200 workers out of the 6,300 workers ex-Rover workers who lost their jobs when the Longbridge plant closed, and found two thirds have suffered wage falls. Overall, on average wages had fallen by ÃÂ£5,640 per year in real terms. A third of the former workers reported an increase in their salaries. Those out of work the longest suffered the largest drops in income.
Some 31 per cent of workers have stayed within the manufacturing sector and are earning broadly similar amounts, but the 60 per cent who have moved into the service sector are mostly earning less. So these people who used the same skills and stayed within manufacturing more or less did OK financially.
In contrast, people who found work in service sectors - like wholesale and retail, real estate and business services, education, and health and social work - have seen cuts of more than ÃÂ£6,000 in annual income.
Almost a quarter of respondents said they were in debt or in need of drawing on savings; 36 per cent said they were just about able to manage on their current incomes; and a further 38 per cent said they were in a position to save some money.
As the threat of a serious recession mounts, the report carries political and practical lessons for how to handle large-scale plant closures and avoid regional crises of unemployment. It's true that fast action by local agencies as part of a co-ordinated response by policy makers to support, inform and retrain the workers who lost their jobs can be called a 'success story' in that large-scale, long-term unemployment in the south Birmingham and wider West Midlands area was avoided.
A total of 90% of the ex-Rover workers were in some form of employment by April 2008. Almost three quarters were employed full-time, 11% were self-employed and 5% were part-time; another 5% were unemployed and looking for work and 2% were unemployed and not looking for work. This represents a labour market activity rate higher than the West Midlands average.
Some 28% of the ex-workers said their current job was better than the one they had at MG Rover, 21% that it was about the same, and 46% felt that it was worse (the remainder were unsure). Nevertheless, a majority still said they liked the work they did and expected to be doing it for the foreseeable future.
The report follows the third wave of research into the fortunes of the ex-Rover workers and comes after previous surveys in July 2005 and December 2005.
The collapse of Rover is rightly termed historic because it marked the closure of the last volume car maker in the UK. The finding that many workers are in what they see as worse jobs may confirm people in the view that the 'newer' jobs in services are just not quite as good as the 'older' jobs in manufacturing they have come to replace - though there are significant numbers now doing rather better than they were.
However, it needs to be borne in mind just how calamitous the sudden arrival of very large numbers of skilled, unemployed people could have been for the region. For almost all the workers to be in work three years on must count as the central positive finding.
Michelle Mahdon, a Senior Researcher at The Work Foundation who worked with us, said: 'The jobs at Rover were high quality manufacturing jobs paying above the average for the West Midlands region so it was always likely that workers would not be able to find directly comparable work - over half the respondents are now doing completely different work and using completely different skills.
'In general, people's health and well-being was positive three years on and people claimed reasonable job satisfaction and reasonable life satisfaction, although the research was done prior to the recent downturn in the economy. But judged against national levels, it does appear that the ex-Rover workers are now in jobs with slightly lower levels of autonomy, challenge and skill use, and fewer opportunities for progression than other workers in the UK.'
In total some 60 per cent of workers have undergone training and education. Two thirds took up the offer of free training places offered by local agencies and many others underwent training by their new employers. The types of assistance and support that people found most helpful were free travel to a training course or job interview; a free place on a training course; being sent on a training course by a new employer; and help with setting up a business. However, most people who found a new job did so through their own initiative or through personal contacts.
Overall, there are some important policy implications for the new Regional task forces which have been set up recently and which have been modelled on the Rover Task force. We would suggest a mix of proactive and 'intelligent reactive' policies to become a 'permanent capacity' in order for policy makers to address large-scale redundancies in the future.
In addition, the government and agencies need to ensure that employees have the necessary skills to cope as industries change, with access to high quality, flexible education and training programmes, and with support through information and mobility programmes. This is especially important as the short-term economic climate worsens.
Involving the community also seems to have been vital - in this case what later became the Rover Community Action Trust came up with lots of good ideas to help workers and their families - ideas like renegotiating the car loans that workers had so that they could keep their cars and stay mobile. This seems to be crucial as another key finding of our study was that those who travelled furthest to find new work reported higher levels of satisfaction.
More generally, the report points to the need to support and develop high quality manufacturing jobs.
And given the need to rebalance the economy away from consumer-led debt fuelled growth towards export-led growth, interventions to support manufacturing seem vital. Add in the green agenda and the need to develop new environmental technologies, especially in the car industry, this points to the need for a new, green industrial policy that backs the environmental industries of the future.
David Bailey and Caroline Chapain work at the Birmingham Business School.
'Life After Longbridge': Three Years on. Pathways to Re-Employment in a Restructuring Economy' is written by David Bailey, Caroline Chapain, Michelle Mahdon and Rebecca Fauth and the full report can be found here. The research was supported by the Economic and Social Research Council and was carried out by researchers at The Work Foundation and Birmingham Business School.