DWP claims on labour market health don’t stack up
Today we issued a press release highlighting that the number of people who have spent more than 12 months out of work has more than doubled since the start of the recession. The Government issued this response:
The TUC should stop hoping for the worst and row in behind our efforts to get jobless people the support they need to re-enter the workplace after more than a decade in which too many were abandoned to a life on benefits.
Apart from being slightly offensive – is it fair to claim that highlighting the scale of long-term unemployment across the UK equates to hoping that levels rise far higher (as, incidentally, they have done – with today’s figures showing a 20,000 quarterly increase in the number of people out of work for over 12 months)? – it is interesting that the Government has chosen to attack the TUC in this way. Could they be on the back foot? The statistics that they have used to support their position certaintly suggest that they are.
In the second part of their reaction the Government has sought to suggest that the labour market is awash with vacancies, stating that:
There are jobs available in the economy with Jobcentre Plus alone taking on over 70,000 new vacancies every week – that’s around one million coming up through Jobcentre Plus every three months.
This is true. But it is misleading to imply that vacancy flows can sensibly be compared with net claimant count figures. Although it isn’t stated in their reaction, DWP’s implication is that with 1 million vacancies to choose from, the UK’s 1,456,000 claimants are spoilt for choice. But this analysis misses the point that every month there are very large numbers of people who move onto JSA, meaning that the actual number of people competing for these vacancies is far higher than the net claimant count figure suggests. For example, in October 329,700 people moved onto JSA but the net change in the claimant count was a small monthly fall of 3,700, as a result of many people moving off JSA and into jobs, taking up many of the vacancies notified to Jobcentre Plus during that month. It is simply misleading to suggest that each vacancy notified to the Jobcentre is available for the stock of claimants to apply for.
A far better way to assess vacancy levels is to look at how the number of vacancies compares to the number of claimants at a set point in time. For example, Jobcentre Plus vacancy data for October show that there were 476,743 notified vacancies during the month, with 321,987 classified as ‘live unfilled vacancies’. The latter category are those that are currently available for people to apply for (that have been notified but have not been withdrawn or taken by another jobseeker). With a net claimant count of 1,465,400 for the same month, this gives a job to claimants ration of 1: 4.6.
And the same trend holds when we compare ILO unemployment (all unemployed people) with national vacancy figures (all vacancies, not just those advertised in Jobcentres). In addition, today’s figures show the position is worsening – in July-September 2010 the ratio of jobs to jobseekers was 1:5.3, up from 1: 5 in the previous quarter. This is becuase vacancies are falling across the economy, down 27,000 on the quarter. In fact during the period August – October 2010 there were only 453,000 vacancies across the country, 224,000 fewer than was the case before the recession in January 2008.
It may suit the Government to pretend that all is well in the labour market and that rising long-term unemployment is simply a result of the UK’s unemployed becoming lazier, but the statistical reality paints a different picture. Across the economy there are far fewer jobs than was the case before the recession. It is time for the Government to stop blaming unemployed people for this situation and start taking responsibility for creating, rather than cutting, jobs.