The labour market’s underlying weaknesses
In the latest labour market statistics, the number of people in employment and the employment rate both went up. Although the labour market improved this time last year but then fell away, it looks as though this is more than a blip: there’s been a slow improvement in the headline figures for about six months now.
Even so, it’s very hard to get enthusiastic about this; indeed, when you look a bit deeper, there’s some very worrying trends. The big factor was summed up in Duncan’s labour market in one chart yesterday: the overall improvement is masking a longer-term stagnation in full-time employment. In other words, we’re paying for a slow improvement in unemployment with high levels of underemployment – it isn’t just part-time employment that’s been rising, it’s also the number of people who say that they’re working part-time because they couldn’t get a full-time job:
In fact, it’s a broader problem than this, there is also the matter of involuntary temporary employment – there are 627,000 temporary workers who say they couldn’t get a permanent job, up 26,000 in the last six months. And a great deal of the increase in employment is actually an increase in self-employment.
In the table below, we show the effect of six successive months’ change. Total employment has gone up by 70,ooo – but that is the net effect of a 46,000 fall in the number of employees and a much bigger increase in the number self-employed. Similarly, there has been an 85,000 fall in the number working full-time and a bigger increase in the number of part-timers.
Overall, during this period, the number of employees working full-time has fallen by more than 137,000.
It’s also worrying that the benefits of the rise in employment aren’t being evenly shared. During the same period, there has been a much bigger increase in the number of men in employment than the number of women, and women’s employment rate has actually fallen:
Regional labour market statistics are much more volatile than the national ones, so the figures for the North West and the East Midlands may improve, but this is another reason for only giving the employment figures one-and-a-half cheers.