A different kind of jobs market
- 17 April 2013
- From the section Business
After all the talk about what happened in the 1980s, Wednesday's labour market figures, for many, will have felt like another blast from the past.
Though the claimant count fell slightly, employment is down - and the wider measure of joblessness rose 70,000 in the three months to February.
Most striking were the earnings figures. On average, weekly earnings (excluding bonuses) have risen by 1% in the past year - a cash increase of just £3 a week. That's the lowest percentage rise since comparable records began, in 2001.
By this measure, at least, the squeeze isn't "easing" at all. For many people it's actually getting worse.
But if you look at what's driving that 70,000 rise in joblessness, the picture is a little brighter - and a reflection of the different way that the labour market has operated in this recession, compared with either the 1980s or early 1990s.
When joblessness rose in those recessions, the number of people who were out of the labour market altogether - "economically inactive" - also went up. And stayed high. People stopped looking for work and often never got another job.
This time around, inactivity did rise when the recession started, but it's since come down dramatically, even as unemployment has stayed relatively high.
Some 57,000 of the latest rise in unemployment is due to a fall in economic inactivity. It's now at its lowest rate, as a share of the population, since 1991. It has fallen 285,000 in just the past 12 months.
What's driving that change? Some 109,000 of that 285,000 fall is due to a a smaller number claiming to be retired - the squeeze in pension pay-outs must be playing a role in that.
But you can see government policy at work here too.
The number who are economically inactive because they are "long-term sick" has fallen 101,000 in the past year. And the number who say they don't want work because they're caring for family (mostly women) is down by more than 40,000.
Long-term, economists would say it will pay dividends to the economy to have people more connected to the labour market during this period, though for some of the "newly active", life might not feel very different.
Either way, this is probably one occasion where government ministers are willing to admit that they have helped boost the ranks of the unemployed.
In a flat economy, the message of today's numbers is that the jobs market is starting to look rather flat as well. But a more encouraging one is that things are still very different from the 1980s.