The labour market figures released by the Office for National Statistics on 18 May relating to the three-month period of January to March 2011 gave little comfort for jobseekers. In summary:
- Unemployment is 2.455 million, down 14,000 from last month's published figure, and the unemployment rate is 7.7% (down 0.1% from last month).
- The number of claimant unemployed is 1,468,600, up 12,400, and the claimant rate is 4.6% (up 0.1%).
- Youth unemployment (not including students) is 646,000, down 20,000 on last month's published figure, and down 45,000 in the quarter, 8.8% of the youth population (down 0.3%).
- Youth unemployment (including students) is 935,000, down 30,000 on the quarter and down 28,000 on last month's published figure.
- There are 5.1 unemployed people per vacancy (no change). Inclusion estimates that this will rise to 5.3 in next month's official figures.
- The employment rate is 70.7% (no change on last month's published figure and up 0.2% in the preferred quarterly measure).
The number of people in employment is 332,000 lower than the pre-recession peak of 29.57 million recorded for the three months to May 2008. The quarterly increase in employment was mainly driven by full-time employment which increased by 94,000 on the quarter to reach 21.30 million. The number of men in full-time employment increased by 40,000 to reach 13.63 million and the number of women in full-time employment increased by 54,000 to reach 7.67 million.[1]
The Centre for Economic and Social inclusion observes: "This poor picture is reinforced by our own analyses of flows into longer-term unemployment and of Jobcentre Plus vacancies. The problem is not just that lone parents are now joining Jobseeker's Allowance (JSA) in greater numbers, it is that people are not flowing off JSA as quickly once they start to claim. The disappointing vacancy figures suggest why."[2]
An 'anaemic' recovery
Nigel Meager, Director of the Institute for Employment Studies, commented on the latest figures:
"The latest official employment figures provide further confirmation that the recovery in the UK labour market is faltering and somewhat anaemic.
"It's now over three years since the start of the recession and we've yet to see a substantial fall in unemployment or sustained growth in employment. The UK is doing worse than many competitors in this respect: although we entered recession before most other countries, by early 2011[1] the UK unemployment total had fallen only 2% from its peak, compared with falls of 4% in France and Italy, 11% in the US and Japan, and 18% in Germany.
"The UK labour market showed considerable resilience in the early stages of the recent recession; despite the depth of the downturn, employment held up better than expected, and better than in previous recessions. Many businesses made efforts to retain staff during the downturn through pay freezes, short-time working and similar measures. There is, however, a sting in the tail, and we're now experiencing it. Because they didn't indulge in big layoffs, employers have plenty of staff capacity to cope with a moderate increase in business demand, without needing to recruit.
"So the employment bath is filling slowly, with only a trickle of new jobs, as the economy stutters back into growth. The worse news is that big public sector job cuts will shortly pull out the bath plug, and overall employment levels may well fall again. This is not a good moment to be taking demand out of the labour market. It is highly implausible, in the immediate future at least, that new private sector jobs will absorb the staff being thrown out from the public and voluntary sectors. The problem is exacerbated by the reluctance, confirmed in several recent surveys, of private employers to hire ex-public sector staff."
The Work Programme needs vacancies
Meager continues:
"The government is about to roll out its ambitious new welfare-to-work scheme (the Work Programme[3]) aiming to find sustainable jobs for large numbers of the long-term unemployed and people previously on disability benefits. The success of this initiative, as the Work and Pensions select committee noted earlier this month, depends crucially on the overall state of the labour market, and on sufficient vacancies becoming available which are suitable for Work Programme participants. Today's labour market data raise serious doubts on this front, suggesting that the new scheme is being launched into very choppy waters."
[1] www.statistics.gov.uk/pdfdir/lmsuk0511.pdf
[2] www.cesi.org.uk/statistics/previous_months/labour_market_statistics_may_2011
[3] See: www.apbusinesscontacts.com/the_people_bulletin-pb_5/fairplay.aspx