One reason working-age welfare dependency remains high is that the demand for unskilled labour is in decline. Part 1 of this CIS Issue Analysis showed that more education and training will be of limited help to jobless people who do not have the ability to perform highly skilled tasks. What they need is an expansion in the number of lower-skilled jobs for them to do.

No single policy can expand low-skilled employment. Simultaneous action is needed on four fronts: (1) reducing the cost of unskilled labour to employers, (2) making employment more attractive than welfare, (3) boosting new personal service employment, and (4) improving people’s social skills and competences.