Posts Tagged ‘average earnings’
Thursday, April 22nd, 2010
The latest unemployment figures take a bit of unravelling. The headline figure for the three months to February, using the Labour Force Survey measure, was up by 43,000 over the quarter to reach 2.5m. This is the highest figure since 1994. This gave an unemployment rate of 8.0% which was up 0.1% on the previous quarter. This is bad news.
However, the number of people claiming Jobseeker’s Allowance, which is also known as the claimant count, actually fell by 32,900 between February and March 2010 to reach 1.54m. This is a bigger fall than anticipated and this measure of unemployment has now fallen for four out of the last five months. This is good news.
 Are things getting better or worse in the UK labour market? So, how then do we reconcile two figures which are moving in opposite directions. It seems that one major factor to the fall in those claiming Jobseeker’s Allowance is that a number of new training schemes have been put in place which are particularly aimed at young people, and which are at least temporarily, keeping them off benefits. Thus, they cannot be unemployed whilst they are being trained. In fact, official figures show that the number of people on government training and employment schemes has increased by 12,000 or 11.2% in the three months to February.
The question is, when the training is over will there be any jobs available? I have already blogged this week about the possibility of a jobless recovery and given the upcoming cull in the public sector it would appear that unemployment will rise further over the next year or so.
An additional factor which would back this up is the fact that there are now 1.05 million people working part-time – because they could not find a full-time job. This number increased by 13,000 over the past quarter. We therefore have a major problem of underemployment.
The significance of this is that these people are now classified as ‘employed’, and it may be as the economy picks up that they will get the first opportunity to move into full-time jobs as the companies they work for start to expand. But as they work more hours they will still just be amongst the already ‘employed’. The point being that the labour market could expand fairly quickly without reducing the unemployment figures.
So, the future changes in the labour market are going to be difficult to call. One positive note is that the number of vacancies for the three months to March 2010 was up 9,000 over the quarter to reach 475,000.
Finally, average earnings figures were also published yesterday. These show that the annual growth rate for regular pay, excluding bonuses, was 1.7% for the three months to February 2010, up from 1.5% in the three months to January. But, what continues to astound, is the difference between the private and public sectors.
When bonus payments are excluded, which mainly apply to the financial sector, growth in private sector average earnings stood at 0.9% compared to a whopping 3.9% for the public sector. Mr Brown is obviously being very generous to government servants, but the day of reckoning cannot be far off.
Tags: average earnings, Employment, private sector, public sector, underemployment, unemployment
Posted in Earnings, Employment, labour markets, unemployment | No Comments »
Monday, April 19th, 2010
Once we’ve decided to which political party we are going to say “squeeze me I’m yours”, we are then going to be well and truly squeezed. And those in the public sector are going to be squeezed more than most.
This prospect has led the Chartered Institute of Personnel and Development (CIPD) to say that more than half a million public sector jobs could be axed in the next five years.
This could lead to a 10% reduction in the public sector workforce which currently stands at 5.8 million.
John Philpott, Chief Economic Adviser for the CIPD said that it was “misleading” to suggest that the pain of job losses could be eased by a combination of pay cuts or short-time working.
He said: “This strategy has been successful in the private sector during the recession as a means of avoiding redundancies during a cyclical downturn in the economy but is not an effective response where long-term structural change is involved.
“An economy with almost 30 million people in work and in which tens of thousands of jobs are lost and created every year should be able to cope with a period of large scale public sector downsizing without this resulting in higher unemployment.
“However, a favourable outcome depends on a return to health of the wider economy and increased demand for labour from the private sector.”
In fact the UK has been applauded for its flexible labour market in the private sector, which has resulted in much lower unemployment than had been anticipated during the recession. This was due to many employees agreeing to short-time working, pay freezes and even temporary pay cuts.
However, the monolith that is the public sector has been virtually unscathed during the crisis, with increases in average earnings far outstripping those seen in the private sector. All political parties are saying that they will tackle the structural problems of the public sector. The private sector was squeezed during the recession, and the public sector will be squeezed during the recovery.
Tags: average earnings, private sector employment, public sector employment, recession, recovery
Posted in Earnings, Employment, recession | No Comments »
Wednesday, January 20th, 2010
The number of people unemployed between September and November 2009 fell by 7,000 to reach 2.46 million, according to the ONS this morning. Many economists had been expecting a rise in unemployment to about 2.50 million. This is the first quarterly fall in unemployment since the three months to May 2008, and gives an unemployment rate of 7.8%.
However, there was a rise in the long-term unemployed. Those out of work for more than a year rose by 29,000 over the quarter to reach 631,000, which was the highest total since the three months to November 1997. This is obviously a serious problem and suggests that there may be a structural problem reflecting redundant skills in parts of the workforce.
The number of people who were claiming Jobseeker’s Allowance in December 2009, also known as the claimant count, also fell by 15,200 on the previous month to reach 1.61 million. This was the second month running that the claimant count has fallen and it reflected the largest monthly fall since April 2007.
 Is unemployment back on track?
This provides additional evidence that the economy is moving out of recession and is added to by the fact that the number of vacancies in the three months to December 2009 rose by 16,000 to 448,000.
On the other hand, the employment rate fell by 0.1% on the September to November quarter to reach 72.4%. This meant that the number of people in employment fell by 14,000 to reach 28.92 million. However, although this figure is worrying on its own, it is made worse by the fact that the number of people employed full-time during the quarter fell by 113,000 which was offset by a rise in the part-time employed of 99,000. It is not good news that we seem to be swapping full-time jobs for part-time ones, and this fact is in danger of being masked by the lower fall in total employment. In fact, the figures show that there were 1.03 million employees and self-employed people who were working part-time, solely because they could not find a full-time job.
As far as earnings are concerned, average regular pay excluding bonuses rose by 1.1% in the three months to November compared with a year earlier. The level of unemployment is therefore keeping earnings down reflecting the amount of slack in the economy. And, it looks as though this slack will get worse as we can expect something of a cull in the number of public sector jobs after the election. “Vote for us now and lose your job later” will probably be one of the more popular electoral slogans.
So, as far as unemployment is concerned, we have seen some surprisingly good figures but we are not out of the woods yet, and is doubtful whether the creation of private sector jobs from the recovery will be able to outweigh the loss of jobs in the public sector.
Finally, I have just come across an interesting, recently published article by the Federal Reserve Bank of San Francisco, entitled ‘Inflation: Mind the Gap’. This provides research that suggests that the Phillips Curve has made a comeback during the recent recession. You can access it here.
Tags: average earnings, employment rate, unemployment, unemployment rate, vacancies
Posted in Earnings, Employment, unemployment | No Comments »
Wednesday, December 16th, 2009
There was a fall in the number of people claiming Jobseeker’s Allowance, otherwise known as the claimant count, in November according to the ONS today. In fact the number fell by 6,300 over the previous month to give a total of 1.63 million out of work. This is the first monthly fall in this measure since February 2008.
The other measure of unemployment, which is the more generally accepted on an international basis, is the latest three month figure for August to October 2009, which shows an unemployment rate of 7.9%, which was unchanged on the previous quarter. The number of people unemployed according to this measure increased by 21,000 over the quarter to reach 2.49 million. This is the smallest increase in unemployment since the March to May 2008 quarter.
 We may be seeing more jobs at the end of the unemployment rainbow, but many of them are part-time.
There was also an increase in the number unemployed for more than 12 months of 49,000 over the quarter to reach 620,000. There was also an increase amongst 18-24 year olds as the unemployment rate in this category rose by 0.9 percentage points to reach 18.4%, which was the highest recorded figure since these records began in 1992.
The number of people in employment increased by 53,000 in the August to October quarter, to give a rate of 72.5%, which was unchanged compared to the previous quarter. However, whilst this looks like good news on the surface, it is important to look at the breakdown of employment. In fact, there were falls in both the number of men and women in full-time employment, but a rise of 120,000 in the number of women in part-time employment. And, according to the ONS, there are now just over one million people who are either employed or self-employed, who are working part-time solely because they cannot find a full-time job.
As far as average earnings are concerned, the public sector continues to grow at a faster rate than the private sector. Average earnings excluding bonuses for August to October rose by 2.7% in the public sector but only 1.4% in the private sector. The government announced in the Pre Budget Report that it was going to cap public sector wage increases to 1%, but only from 2011.
Tags: average earnings, Employment, employment rate, unemployment, unemployment rate, youth unemployment
Posted in Earnings, Employment, unemployment | No Comments »
Thursday, October 15th, 2009
With unemployment popularly expected to peak above three million, most commentators were surprised by one measure of unemployment showing a tiny fall over the three months to the end of August. In fact, according to the Office for National Statistics, there were 2.469m unemployed between June and August, which was slightly fewer than the 2.47m recorded between May and July. We have not seen a fall in unemployment since the March to May quarter in 2008.
However, when the last quarter is compared to the previous quarter, there was a rise of 88,000 which reflects a total rise in unemployment of 677,000 over the past year. However, the rate of increase in unemployment is obviously slowing. The unemployment rate was 7.9% for the three months to August 2009 which is up 0.3 over the previous quarter and up 2.1 over the year. Again, these figures are on a three-month average. When detailed monthly estimates are examined it suggests that the unemployment rate fell from 8.2% in June to 7.8% in August. The UK’s official rate of 7.9% is well below the 9.8% in the US and the 9.1% average in the EU.
 Unemployment is not exactly back on track but appears to be heading in the right direction.
As far as the claimant count is concerned, which measures the number of people claiming Jobseeker’s Allowance, this reached 1.63m in September 2009. This is the highest figure since April 1997. But, this figure only rose by 20,800 over the previous month, which whilst bad news for those affected, again shows a downward trend.
Other figures show that the employment rate for people of working age was 72.6% for the three months to August 2009, which is down 0.3 from the previous quarter and 1.8 over the year. There was, however, a fall in redundancies over the quarter of 68,000 to 233,000, although this figure was still 85,000 up over the year.
Average earnings, excluding bonuses, increased by 1.9% in the three months to August 2009 compared with the previous year, which is the lowest annual growth rate since comparable records began in 2001. This should help to dampen inflation.
What is particularly worrying about the current situation is that there was a further rise in youth unemployment, from 937,000 to 946,000. This means that 20% of young people between the ages of 16 and 24 are out of work and this rises to one in three for 16-17 year olds.
Although the overall trend in UK unemployment is going in the right direction the overall total does hide some changes in the labour market. For example, there are almost one million people working on a part-time basis – and, therefore ‘employed’ – who are actually looking for full-time work. Also, there are another 443,000 people who are working on ‘temporary’ jobs. On the other hand, it could be argued that this shows signs of the flexibility within the UK labour market which many other countries do not have.
This could be the reason that Yvette Cooper, work and pensions secretary was able to tell the House of Commons work and pensions committee that: “It may be that the traditional large gap between what happens to growth and what happens to employment may be narrowing.”
Tags: average earnings, Employment, redundancies, unemployment, youth unemployment
Posted in Employment, unemployment | No Comments »
Wednesday, July 15th, 2009
In the three months to May 2009 the number of unemployed people increased by 281,000 over the quarter and by 753,000 over the year, to reach 2.38 million. According to the Office for National Statistics which published these figures this morning, this is the largest quarterly increase in the number of unemployed people since comparable records began in 1971.
The unemployment rate was 7.6% for the three months to May, which was up 0.9% over the previous quarter and up 2.4% over the past year. This represents the largest quarterly increase in the unemployment rate since 1981.
The recent trend can be seen in the figure below.
 Source: ONS
Although these figures are extremely serious and look likely to continue to grow over the next few months, the UK is comparatively better off than some other major economies. For example, the US saw an additional 467,000 jobs lost in June and has an unemployment rate of 9.5%. Also, by comparison, the Euro area had an unemployment rate of 9.5% in May and the in the same month the OECD average rate for member states was 8.3%.
The UK claimant count, which measures the number of people claiming Jobseeker’s Allowance, reached 1.56 million in June, which is the highest figure since June 1997. The count has increased by 23,800 in the month since May and is up 716,800 over the past twelve months. One possible ‘green shoot’ is that this monthly increase is the lowest since May 2008 but it will have to be substantiated by increasingly smaller rises over subsequent months before we can get too excited.
Other figures show that the employment rate for people of working age was 72.9% for the three months to May 2009 which was a drop of 0.9 percentage points from the previous quarter and down 2.0 on the year. This is the largest quarterly fall in the working age employment rate since comparable records began in 1971. The total number of people in employment for the three months to May 2009 was just under 29 million, which was 269,000 down over the quarter and 543,000 less than a year ago.
Average earnings including bonuses rose by 2.3% in the year to May 2009, which compares to an April rate of only 0.9%. This shows that there are still bonuses being paid in some sectors of the economy to cause such a sharp increase. When these are factored out, average earnings excluding bonuses fell to 2.6% from the April rate of 2.7%, reflecting the pressure on labour markets, with some high profile companies instituting wage freezes and even wage cuts. What is particularly intriguing is that May pay growth including bonuses in the private sector stood at 1.9% in May compared with 3.5% in the public sector. Whichever government wins the next election will have to tackle head-on both the inexorable rise in public sector pay and the level of secured pensions which most private sector employees can only dream about.
Tags: average earnings, employment rate, unemployment, unemployment rate
Posted in Earnings, Employment, unemployment | No Comments »
Wednesday, May 13th, 2009
In the first quarter of 2009 the number of unemployed in the UK increased by 244,000 on the previous quarter, and 592,000 on the same quarter of 2008, to reach 2.2 million. The unemployment rate rose by 0.8% over the previous quarter and 1.8% over the year to reach 7.1%.
The other measure of unemployment which looks at those out of work and claiming benefits was 1.51 million in April. This was up 57,100 over the previous month and up 710,700 over the year. This is the highest it has been since 1997.
Also, the rate of redundancies was 286,000 in the three months to march which was up 27,000 on the quarter and 175,000 over the year, and was the highest figure since comparable records began in 1995.
The recent trend in the unemployment rate can be seen in the graphic below.
 Source: ONS
The weakness in the labour market is reflected in average earnings which including bonuses were 0.4% lower in the first quarter of 2009 than the comparable quarter in 2008. This largely reflected the crisis in the banking and financial sector which saw a sharp fall in bonuses. When bonuses are excluded, average earnings rose 3.0% in the three months to March compared to the previous year, which was the lowest rate since such records began in 2001.
Another expected effect has been the decline in job vacancies. There were 455,000 job vacancies in the three months to April 2009, which was a fall of 51,000 on the previous quarter and down 232,000 on the year.
The OECD this week has said that it has identified a possible “pause” in the UK’s economic decline which may represent a trough in the recession. However, at present, it looks likely that unemployment will continue to fall with some commentators anticipating a rate of around 10% by the end of the year.
Tags: average earnings, claimant count, unemployment, unemployment rate, vacancies
Posted in unemployment | No Comments »
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