From the TUC

London calling: the capital dominates jobs growth

14 Mar 2017, by in Labour market

Employment is at record levels but despite much talk of economic rebalancing and regional powerhouses, TUC analysis has found that employment growth in London has rocketed ahead of the rest of England since the recession.

We also conclude that London has had:

  • the highest growth in employee jobs
  • the smallest loss in public sector jobs
  • and the highest growth in private sector jobs.

So while London, like the rest of the country, has seen a surge in self-employment in recent years, in the capital this has been more than matched by an expansion in employed work. In other English regions growing self-employment has dominated jobs growth, bringing with it greater risk of low pay, poor conditions and insecurity.

Regional employment rates and levels  

All regions have returned to their pre-recession employment rates, though variation in rates still remain.

 Employment Rate (%) 2008 2010 2012 2014 2016
North East 68.3 66.9 67.1 69.4 70.8
North West 69.9 69.1 69.4 70.3 72.8
Yorkshire  +  Humber 71.4 68.8 69.6 71.9 72.7
East Midlands 73.8 70.8 71.5 73.8 75.2
East of England 75.5 73.6 74.7 76.3 77.3
London 70 67.8 68.4 71.9 73.5
West Midlands 70.6 68.8 69.6 70.2 72.2
South East 77.3 75 74.8 76.4 78.3
South West 76.6 74 74.3 76.1 77.4

Source: ONS

The South East, East of England and the South West had the highest employment rates prior to the recession and continue to do so. However the fastest growth in the employment rate has been in London, which has grown by 3.5 percentage points since 2008.

Employment rate 2008-2016 by region

The South East, East of England and the South West had the highest employment rates prior to the recession and continue to do so. However the fastest growth in the employment rate has been in London, which has grown by 3.5 percentage points since 2008. Employment rate 2008-2016 by region

Source: ONS

Looking at employment growth from 2012, the start of the recent jobs recovery, London still dominates. Employment in the capital has grown by 5.1 percentage points since then.

Employment rate 2012-2016 by region 

Percent point change Difference 2008-2016 Difference 2012-2016
North East 2.5 3.7
North West 2.9 3.4
Yorkshire  + Humber 1.3 3.1
East Midlands 1.4 3.7
East of England 1.8 2.6
London 3.5 5.1
West Midlands 1.6 2.6
South East 1.0 3.5
South West 0.8 3.1

Source: ONS

Since 2012, London has had net growth of over half a million jobs. The remaining regions have had an average increase in employment of 6 per cent compared to 13 per cent in London. In other words, employment growth in London has been more than double that of other regions.

Employment level in London and (England excluding London)

England excluding London London only
2012 21,056,000 3,981,000
2016 22,362,000 4,486,000
Net change 2012-2016 1,306,000 505,000
% change 2012-2016 6% 13%

Such is the capital’s dominance that it has accounted for 28 per cent of the rise in employment since 2012. Yet when adding the North East, Northwest and the Yorkshire and Humber together jobs growth has been just 20%.

Regional composition of self- employment and employee jobs

The ranks of the self-employed have ballooned by one million since the recession to take their numbers to 4. 8 million. Since 2008 employee growth has increased by 5 per cent, and self- employment growth by 24 per cent. Looked at another way, 43 per cent of the growth in total employment since 2008 has come from the self-employed.

What has been happening in the regions?

In around half of English regions, self-employment has contributed over half of the total growth in employment since 2008.

Self- employment and employee contribution to employment growth 2008-2016

Self- employment and employee contribution to employment growth 2008-2016

Source: ONS

London and the Yorkshire and Humber have had the highest increases in self-employment, with the number of self-employed people increasing by 36 per cent. But this apparent similarity between the two regions disguises a sharp difference under the surface.

Percentage increase in employee + self-employed 2008-2016

Percentage increase in employee + self-employed 2008-2016

Source: ONS

While there has been strong growth in the numbers of self-employed in London, employee roles have risen faster, more than twice the pace of any other region.  Since 2008 the capital has had a net increase of 466,433 employee jobs, and 215,602 self-employee jobs.

In contrast, in Yorkshire and Humber, the number of self-employed people has expanded by 100,000 but a mere 15,636 employee jobs have been added.

Self- employment and employee contribution to employment growth London v England (excluding London) 2008-2016

Self- employment and employee contribution to employment growth London v England (excluding London) 2008-2016

Source: ONS

Regional public and private sector employment

Public sector job cuts since 2010 have exacerbated the imbalances in regional jobs growth.

Public and Private sector contributions to employment growth 2010-2016

Public and Private sector contributions to employment growth 2010-2016

(The data excludes effects of major reclassifications)

Source: ONS

All regions have experienced public sector job losses over the past six years. But some, like the North East, have been hit especially hard. London stands out again with the smallest losses in public sector jobs yet huge gains in private sector growth.

It is not the case that London is a paradise in terms of employment. Some London boroughs have high unemployment rates and levels of poverty. However employment growth after the recession has been disproportionately skewed to London as a whole.

One Response to London calling: the capital dominates jobs growth

  1. The North East is England’s insecure work hot spot
    Mar 16th 2017, 10:34 am

    […] blog yesterday showed how London has […]

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