Don't be fooled by the employment increase

Total unemployment is the highest since 1994 -- under-25s and northerners are bearing the brunt.

No amount of spin can get around the fact that there was bad news yesterday from the Office for National Statistics on the labour market. This was not much of a surprise given that the data from several qualitative surveys has been less than stellar over the past few weeks. The KPMG/Rec Report on Jobs also showed that permanent placements fell for a third month running in December, while temporary billings were also down for the first time in 29 months. The British Chamber of Commerce's Quarterly Survey for Q4 2011 suggested that firms were once again shaking out workers.

Firms reported in the survey over the least few months had employment falling at a faster pace than previously in both manufacturing and services. Expectations for employment over the next few months fell in both sectors, and precipitously so in manufacturing.

The big news was the largely unexpected increase in the unemployment rate; up 0.3 per cent on the quarter and up 0.1 per cent on the month to 8.4 per cent -- the highest it has been since the end of 1996. The total number of unemployed now stands at 2,658,000; the highest it has been since the autumn of 1994. The number of unemployed looks set to hit the three million mark this year, as the economy heads back into recession.

In other news, employment on the quarter was up 18,000 but -- as can be seen from the table -- this was driven entirely by older folks aged 65 and over. The burden of rising unemployment and declinign employment is falling disproportionately on people under age 50.

 

The numbers of youngsters under age 25 who are unemployed now stands at 1,043,000 -- giving an appalling unemployment rate of 22.3 per cent. Forty four per cent of the increase in unemployment on the quarter was accounted for by youngsters.

Some coalition supporters tried to wriggle their way out of this bad news. On his blog, David Smith continued his theme that there isn't really a youth unemployment problem, arguing that:

The rise in youth unemployment looks to be mainly a full-time student phenomenon.

Excluding them, there was an increase of just 8,000 over the latsst (sic) three months. Including them, there was a rise of 52,000.

The numbers on the quarter are below. As in every country in the EU, the youth employment count includes full-time students in part-time jobs, while the youth unemployment count includes full-time students and unemployed searching for part-time jobs.

 

Smith conveniently failed to point out that the increase in employment among those in full-time education entirely explains the overall increase in employment but doesn't exclude them from the overall count. The decline in youth jobs is driven entirely by those who are not full-time students.

Excluding full-time students, there was an decline of just 48,000 over the latest three months. Including them, there was a decline of 28,000.

Sorry, good try David, but you can't have it both ways. Fiddling the figures doesn't work.

Other bad news on the labour market was that:

  1. The number of full-time jobs was down 57,000 on the quarter
  2. There are 590,000 people who have temporary jobs because they can't find permanent jobs
  3. There are a further 1.3 million who have a part-time job because they can't get a full time job
  4. Earnings rose by 2.1 per cent on the quarter and the month, so despite the drop in the CPI this month, workers are still receiving real wage cuts.
  5. Unemployment rates are now in double digits in the North East (12.0 per cent) and Yorkshire and the Humber (10.0 per cent).

In response to all this, Employment Minister Chris Grayling said yesterday:

The overall level of unemployment is, and will remain, a major concern for the government. The latest figures reflect the current challenging economic climate . . . Despite the exceptionally difficult economic circumstances, finding work for the unemployed will remain top of the government's agenda.

Top of the agenda? Doesn't exactly look that way does it, as unemployment heads inexorably upwards? I dread to think what is happening to policies further down the government's agenda!

It remains clear that the government is not finding work for the unemployed. Maybe it's time for a trip to the North East, Chris, to see how well your strategy isn't working?

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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Donald Trump vs Barack Obama: How the inauguration speeches compared

We compared the two presidents on trade, foreign affairs and climate change – so you (really, really) don't have to.

After watching Donald Trump's inaugural address, what better way to get rid of the last few dregs of hope than by comparing what he said with Barack Obama's address from 2009? 

Both thanked the previous President, with Trump calling the Obamas "magnificent", and pledged to reform Washington, but the comparison ended there. 

Here is what each of them said: 

On American jobs

Obama:

The state of our economy calls for action, bold and swift.  And we will act, not only to create new jobs, but to lay a new foundation for growth.  We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together.  We'll restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost.  We will harness the sun and the winds and the soil to fuel our cars and run our factories.  And we will transform our schools and colleges and universities to meet the demands of a new age.

Trump:

For many decades we've enriched foreign industry at the expense of American industry, subsidized the armies of other countries while allowing for the very sad depletion of our military.

One by one, the factories shuttered and left our shores with not even a thought about the millions and millions of American workers that were left behind.

Obama had a plan for growth. Trump just blames the rest of the world...

On global warming

Obama:

With old friends and former foes, we'll work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet.

Trump:

On the Middle East:

Obama:

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West, know that your people will judge you on what you can build, not what you destroy. 

Trump:

We will re-enforce old alliances and form new ones and unite the civilized world against radical Islamic terrorism, which we will eradicate completely from the face of the earth.

On “greatness”

Obama:

In reaffirming the greatness of our nation we understand that greatness is never a given. It must be earned.

Trump:

America will start winning again, winning like never before.

 

On trade

Obama:

This is the journey we continue today.  We remain the most prosperous, powerful nation on Earth.  Our workers are no less productive than when this crisis began.  Our minds are no less inventive, our goods and services no less needed than they were last week, or last month, or last year.  Our capacity remains undiminished.  

Trump:

We must protect our borders from the ravages of other countries making our product, stealing our companies and destroying our jobs.

Protection will lead to great prosperity and strength. I will fight for you with every breath in my body, and I will never ever let you down.

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland