Wednesday 14 November 2012

Jobs schemes boost latest jobs figures


I’ve just been looking at the monthly labour market statistics data release from the Office for National Statistics, mostly covering the period July-September. On the face of things these are another good set of quarterly jobs figures with 100,000 more people in work and unemployment down by 49,000, although the 10,000 rise in JSA claimant unemployment in October takes away some of the shine as does very weak growth in average earnings. The annual rate of growth in regular pay (excluding bonuses) has dropped across all the major sector groupings, to just 1.9% on average, so still lagging price inflation. Employment may have become oddly decoupled from what’s happening in the wider economy but viewed in the full perspective of jobs, productivity and pay the UK labour market remains in a state of distress.   

The number of employees in employment has increased by 87,000 while self-employment has fallen by 11,000. Significantly more than a fifth (22,000) of the net increase in total employment and almost half the fall in unemployment is due to a big quarterly rise in the number of people employed on government supported employment and training schemes. Many of these will be core jobless young people not in full-time education targeted by measures such as the Youth Contract. The number of unemployed people aged 16-24 in the core jobless category fell by 65,000 on the quarter, compared with an increase of 17,000 in 16-24s looking for work while in full-time education. This suggests that help for the target group of core jobless may be substituting for jobs that would otherwise have been taken by those in education.

The high proportion of scheme supported jobs in total new jobs this quarter distorts the underlying trend in growth in full-time and part-time jobs. Even so, it’s good to see signs of increased working hours and at last a welcome fall of 11,000 in the number of people working part-time because they can’t find a full-time job. It would seem that the jobs story in the most recent quarter is not so much one of full-time vs. part time work as temporary as opposed to permanent work, with an increase to 0.65 million in the number of people working as temps because they can’t find permanent jobs.

Also welcome in these latest figures is a surprising quarterly reversal of the traditional north-south divide across the English regions, with the North East, North West, Yorkshire and Humberside and West Midlands easily outperforming London, the South East and the East Midlands both in terms of increased employment and lower unemployment. The South East labour market looks to have weakened markedly since the spring while in London the temporary boost provided by the Olympics appears to be on the wane.

1 comment:

  1. "Significantly more than a fifth (22,000) of the net increase in total employment and almost half the fall in unemployment is due to a big quarterly rise in the number of people employed on government supported employment and training schemes. Many of these will be core jobless young people not in full-time education targeted by measures such as the Youth Contract".

    I believe you may be incorrect to describe people as being on government supported employment and training schemes.

    It appears to be true that ONS is including workfare participants in the employment counts. But as far as I am able to ascertain, to describe participants, who continue to claim JSA and who are not payrolled, as employed is misleading and stretches definitions beyond breaking point.

    In short the employment counts have become politicised and are spin designed to hide the true scale of unemployment.

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