Touchstone Extras #13 | Download Equitable Full Employment: A Jobs Recovery For All [PDF]
The TUC Touchstone pamphlet Equitable Full Employment: A Jobs Recovery For All shows that the recent rise in employment is being driven by fewer people leaving their jobs, rather than more people finding new work.
The report, written for the TUC by Tony Wilson and Paul Bivand of the Centre for Economic and Social Inclusion (Inclusion), compares job start rates before the recession, at the height of the crash and during the recent recovery. It finds that metropolitan areas such as London, Birmingham and Tyne and Wear are recovering faster than their neighbouring rural areas.
While the employment record of the UK between the end of the 1990s downturn and the onset of the 2008 Great Recession is generally considered to have been a success, even before the recession began there were significant causes for concern. Real wages had been stagnant since 2003. Employment growth for some groups appeared to have stopped and for others gaps remained very wide. The most disadvantaged areas also still faced significantly greater challenges than elsewhere. As a consequence, the UK entered the recession with as many people on out-of-work benefits as had been the case at the start of the 1990s recession, and nearly half as many again as at the start of the 1980s recession.
Today, after the slowest recovery in decades, output is returning to its 2008 level but six years’ lost ground has still to be made up. However both the level of employment and the total hours worked have recovered to their pre-recessionary levels. This has led to a ‘productivity puzzle’: how can a smaller economy sustain more people working longer? The answer, inevitably, is by paying lower wages – with real wages down by nearly 10 per cent since 2008.
The increase in employment has been driven mainly by fewer people leaving jobs – with new job starts still far below pre-recessionary levels. Specifically, the hiring rates of both the unemployed and those economically inactive remain around 20 per cent below 2008.