A different kind of jobs market

 

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.

 
Stephanie Flanders Article written by Stephanie Flanders Stephanie Flanders Former economics editor

So it's goodbye from me

After 11 years at the BBC, I'm leaving for a new role in the City.

Read full article

Comments

This entry is now closed for comments

Jump to comments pagination
 
  • rate this
    0

    Comment number 211.

    BBC News Headlines

    Goodbye Lady T - the woman who forged a new consensus that nobody wishes to question.

    In other news today -

    * Ofgen says power companies give bad deal
    * No buses means no apprenticeships for the young
    * How to regulate the banks and markets?
    * Britain faces power-outs by 2017
    * Lack of council housing costs billions in benefit
    * Cancel £30bn nuclear weapons?

    Nick R = idiot

  • rate this
    0

    Comment number 210.

    The last time an event such as this occured,
    it grabbed the Monica........ 'Watergate'.


    :) :) ;) pwned..... This time it's Checkmate.

  • rate this
    0

    Comment number 209.

    Just look at the classifieds section of your local paper. That's an awful lot of extra self-employed telephone sanitisers and mobile cat psychologists. I doubt they're making a profit but they're not unemployed or economically inactive, oh no.

    Then there's the strangely high level of churn in job markets. And so on. If these figures are a true picture then I'm Davros and Daleks can handle stairs.

  • rate this
    0

    Comment number 208.

    Desperately required ~ A medical remedy for plague affecting billions of muppets. This may become God's work.

  • rate this
    0

    Comment number 207.

    142.

     UKL_UK Libertarian Good, mostly the bad ones.
    ----
    No they ALL would of failed.

    "QE has had no effect on Housing or the Markets...
    "=I disagree.
    ------
    You'e entitled to be wrong.
    Additionally; Having artificially fixed interest rates insanely low, home buyers' subsidies, and government involvement in housing distorts the housing market no-end.

    -
    Different matter, to which we can agree.

 

Comments 5 of 211

 

Features & Analysis

From BBC Capital

Programmes

  • Click reporter Jen Copestake looks at a smart mirrorClick Watch

    From the mirror offering beauty advice to next gen robot vacuums - the connected home of the future

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.