Employment and unemployment
The most recent labour market statistics cover May to July, when there were 29,560,000 people in employment. This was a rise of 236,000 on the quarter and 431,000 on the year. The employment rate for those aged 16 to 64 was 71.2%, a rise of 0.5% from the prior three months and 0.8% over the year.
Unemployment, on the International Labour Organisation measure, fell by 7,000 on the quarter. The unemployment rate fell by 0.1% to 8.1%. Over the past year unemployment, on the ILO measure, has risen by 61,000 and the rate has increased by 0.1%.
Whilst the rise in employment and the fall in unemployment are to be welcomed there were still some worrying signs of weakness in the data.
Long term unemployment is now at its highest level since the mid 1990s whether measured by the number of people out of work for 6 months, one year or two years. Youth unemployment remains above one million and, as explained below, there has been a further rise in under-employment.
Much of the improvement has been concentrated in London, suggesting that there may be a temporary 'Olympic effect' at work.
The Labour Market since the Recession
Whilst the recent rise in employment is welcome, the chart below puts it in some longer term context. The number of people in full time work is still 640,000 below its pre-recession level, despite an increase in the population of over 1.5mn. The number of people unemployed has risen by almost one million and the number of people economically inactive has risen by over half a million.
Whilst headline employment is almost at the same level it was in May 2008, this is almost entirely driven by a rise in part-time working (much of it involuntary).
In addition the number of self-employed people has risen by 388,000. Given the weak economic outlook (and the low skill levels of many of the newly self-employed) much of this increase may represent disguised under-employment and unemployment.
The latest statistics show that there has been another increase in underemployment, record high of 1.4 million people are in part-time work as they cannot find full time positions and there are now 658,000 in involuntary temporary work.
The chart below clearly shows this continuing rise in underemployment since the 2008 recession, with the rise in involuntary part-time work more substantial. Involuntary part-time work has doubled since the start of the recession.
Recent TUC analysis found that the scale of under-employment is actually even greater. As well as the headline figures of involuntary part-time and temporary work there are many more people who are in work but would like more hours. More than one in ten workers cannot get enough hours at work. Since the start of the recession underemployment (where people are in work but would like to work more hours) has risen by around one million to 3.3 million.
The pattern of labour market change continues to vary across the various nations and regions of the UK. Over the quarter, London saw a fall of 22,000 (-0.7%) in unemployment and this is most likely a result of the Olympic effect.
Almost 40% of the net change in employment was due to an increase in London.
The number of unemployed people per job vacancy currently stands at 5.5 down from the previous quarter (5.6); however this remains exactly the same as at this time last year. There has been a small increase in the number of vacancies over the last quarter of 11,000 to 474,000, however there is still a long way to go as vacancy levels were almost 700,000 on the eve of the recession.
Average Weekly Earnings
The annual growth rate of regular weekly pay (three month average) fell by 0.3% to 1.5%. This is well below inflation (currently at 2.9%) and so real wages continue to fall. For most of 2011 average weekly earnings were growing at an annual rate of over 2%. Regular pay growth (i.e. excluding bonus payments) rose by 0.1% to 1.9%.
Total pay growth is weakest in finance and business services (0.0%, driven by a fall in bonus payments) and strongest in the manufacturing sector (+2.6%). Pay in the public sector rose by 1.2% whilst private sector pay rose by 1.8%.
Full Report: http://www.tuc.org.uk/tucfiles/367/Underemployment%20report.pdf
Newsletter (800 words) issued 19 Sep 2012
This page http://www.tuc.org.uk/economy/tuc-21435-f0.cfm
printed 24 May 2013 at 15:09 hrs by 18.104.22.168