19 Mar, 2012

Tougher squeeze on pay and hours

Dr John Philpott, Chief Economic Adviser at the Chartered Institute of Personnel and Development (CIPD) comments as follows on official labour market statistics for the period November 2011 – January 2012 published earlier today by the Office for National Statistics (ONS):

“Any rise in unemployment is a great regret but the latest jobs figures are at least mildly encouraging. The rate of increase in joblessness clearly slowed around the turn of the year, with private sector job creation just about managing to outpace public sector job cuts. There has also been a pick-up in job vacancies since last autumn. While it’s far too early to conclude that this signals a turning point in the labour market – a similar period of stability this time last year was followed by a renewed downturn – it demonstrates the ability of the UK economy to create jobs once a more robust recovery gets underway.

“However, the good news on jobs is tempered by the fact that the rise in employment is being driven primarily by growth in part-time jobs, leaving a record 1.3 million people who want full-time working having to scrape by on whatever income short hours provide. Combined with a very low rate of pay increases – which are still lagging far behind price inflation – the emergence of ‘part-time Britain’ shows that even though the rise in unemployment may be slowing there is an increasingly tight squeeze on most people’s standard of living.

“In terms of detail, although youth unemployment has increased further, this is almost entirely accounted for by young people in full-time education. Care should also be taken in interpreting the rise in female unemployment. It is true that the rise in female unemployment in the three months to January (up 22,000) was higher than that for men (up 6,000) but this was because an increase in the number of women entering the labour market  exceeded an increase in the number of women in employment. It was not the result of fewer women in work. On the contrary, it is men rather than women who have experienced a fall in employment over the past year. The current popular narrative suggesting that female employment is falling and unemployment rising relative to that of men because of the impact of fiscal austerity is therefore not supported by the available data.”

Credit: onrec.com

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