From the TUC

The Changing Labour Market: 5 Charts

23 Jan 2014, by Guest in Economics

I blogged on the latest labour market statistics over at Left Foot Forward yesterday. My central argument was that whilst jobs growth has been very strong, there are worrying trends in both pay and productivity.

I am starting to think that the labour market has undergone quite a large compostional change over the past five years – a change that may be driving the weak aggregate earnings figures and which may also explain some of the ‘productivity puzzle’.

As I wrote yesterday:

If one just looks at headline jobs figures then one risks missing a big change in the underlying composition of the jobs market.

More people in work is certainly better than fewer people in work, but if they are working in lower productivity and lower waged industries then this is far from the ideal outcome.

A jobs intensive recovery in output is better than stagnating output and rising unemployment (the pattern in 2011 and early 2012), but unless we see a pick-up in productivity growth soon then the UK risks much slower growth, and lower living standards, in the future.

So, to flesh out this change – here are five charts on what is happening in the labour market at the moment. In each case I’ve compared the latest data to early 2008.

First total employment:

total employment

This is the chart the government is fond of pointing out. There are a record number of people in work (up 651,000 since the start of 2008). Of course we also have a growing population, so whilst number of people in work is up the employment rate (the percentage of the working age population in work) is still below it’s pre-crisis peak.

But this second chart demonstrates that the type of work people are doing has changed:

composition of emp

There has been little change over this period in the number of unpaid family workers (up 1,000) or in the number of people on government supported schemes (up 30,000) but there has been a very large rise in self-employment (+486,000) against a much smaller increase in the number of employees (+135,000).

In January 2008 13.1% of all workers were self-employed against 14.4% in the most recent data.

There has also been a big shift in full-time versus part-time working.


Since January 2008 the number of people working full-time has risen by 63,000 whilst the number working part-time has grown by 588,000.

The chart below shows the number of employees working full-time (what might be thought as the ‘typical’ working experience).

ft emp

Despite a wider recovery in the jobs market, there are still 141,000 fewer employees working full-time compared to early 2008.

Such positions represented 64.3% of all those in work in January 2008 and represent only 62.5% today.

Finally there has been a big change in the sectors in which people work. The chart below uses the workforce jobs measure to show change in employment by industry between Q1 2008 and Q3 2013 (this is the most recent data available).


Compared to pre-recession levels manufacturing employment has dropped by 325,000 whilst the number working in human health & social work activities has grown by 457,000.

Whilst there may be more jobs in the economy today than back in 2008, the composition of those jobs looks very different. I can’t help but think that this differential pattern is playing a pick role in dragging down the growth of average weekly earnings (more people in low paid industries = weaker AWE growth) and has having a┬ásubstantial impact on productivity.


6 Responses to The Changing Labour Market: 5 Charts

  1. Michael Folkerson
    Jan 23rd 2014, 4:48 pm

    Interesting article. Not at all to dispute your argument, but just to point out that while overall employees in manufacturing seem to have dropped precipitously, companies are banging their collective heads against the proverbial wall because they cannot actually find enough skilled labour.

    The result is that those who can tend to look for those skills outside the UK in the short-term, while hoping the long-term situation improves in regards to graduates from further education, vocational schools, apprenticeships, etc.

  2. John Rich
    Jan 24th 2014, 1:19 pm

    The reason they cannot obtain resident skilled labour is because of the cost of, and disinterest in, training.
    UK industry has always preferred poaching already trained labour in preference to training their own.

  3. oskarsdrum
    Jan 24th 2014, 4:10 pm

    Real Estate employees up by almost as much as Construction is down, brilliant!

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