Merryn's Blog

What's good about the employment data?

When the latest unemployment figures came out, they were welcomed as good news by almost everyone. But look a little deeper, and there are some truly hideous numbers.

When the unemployment numbers for the UK came out this morning they were welcomed as good news by almost everyone.

And in a way they were the headline number had it that total unemployment for the three months to November stood at 2.46m. That's 7,000 down on the previous number, making the rate of unemployment a mere 7.8%.

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But look a little deeper and the headline number covers up some truly hideous figures. The number of full-time jobs fell by 113,000, while the number of part-time jobs rose by 99,000. There are now 7.71m people working part time. More than a million of those say they are only doing so because they can't get full-time jobs. That's the highest figure since 1992, and while we can't class this one million as unemployed, they are certainly under-employed.

More bad news comes in the fact that the workforce is getting paid less in real terms: average weekly pay rose a mere 0.7%. Even worse than this number is the percentage of working-age people who are not employed, but not looking for work either: 21.1%. So more than one in five of the working age population is economically inactive. That's 8.05m people. Sure, some will be retired hedge fund managers and the like but not all of them: a good many more will have fallen out of the official unemployment statistics simply because they have stopped actively looking for work (presumably because there isn't any).

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Overall 14,000 fewer people had jobs than in the previous period. I can see why the fact that things aren't even worse is nice. But on the other hand, it's hard to see how the fact that fewer people have jobs than they did, and that those who do have jobs are getting paid less, can be spun as good news. That's particularly the case given that UK unemployment is even now still being cushioned by the public sector: between the third quarter of 2008 and the third quarter of 2009 the heart of the recession so far public sector employment rose by more than 90,000.

But this can't go on. Public sector cuts are coming, and when they get here, jobs will go. So what will the unemployment numbers look like this time next year?

Unless we really do see a miracle recovery in the private sector (and the signs of one are pretty limited so far) the answer is not good at all. The government might not want to recognise this but the UK's workers clearly do. If they didn't, they wouldn't keep accepting the low pay and shorter hours that make them cheaper and cheaper, allow their employers to keep them on and keep the official figures looking less bad than they really are.

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