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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Want to beat child poverty? End the freeze on working-age benefits

Freezing working-age benefits at a time of rising prices is both economically and morally unsound. 

We serve in politics to change lives. Yet for too long, many people and parts of Britain have felt ignored. Our response to Brexit must respond to their concerns and match their aspirations. By doing so, we can unite the country and build a fairer Britain.

Our future success as a country depends on making the most of all our talents. So we should begin with a simple goal – that child poverty must not be a feature of our country’s future.

The Institute for Fiscal Studies projects that relative child poverty will see the biggest increase in a generation in this Parliament. That is why it is so troubling that poverty has almost disappeared from the political agenda under David Cameron, and now Theresa May.

The last Labour Government’s record reminds us what can be achieved. Labour delivered the biggest improvement of any EU nation in lifting one million children out of poverty, transforming so many lives. Child poverty should scar our conscience as much as it does our children’s futures. So we have a duty to this generation to make progress once again.

In my Barnsley constituency, we have led a campaign bringing together Labour party members, community groups, and the local Labour Council to take action. My constituency party recently published its second child poverty report, which included contributions from across our community on addressing this challenge.

Ideas ranged from new requirements on developments for affordable housing, to expanding childcare, and the great example set by retired teachers lending their expertise to tutor local students. When more than 200 children in my constituency fall behind in language skills before they even start school, that local effort must be supported at the national level.

In order to build a consensus around renewed action, I will be introducing a private member’s bill in Parliament. It will set a new child poverty target, with requirements to regularly measure progress and report against the impact of policy choices.

I hope to work on a cross-party basis to share expertise and build pressure for action. In response, I hope that the Government will make this a priority in order to meet the Prime Minister’s commitment to make Britain a country that works for everyone.

The Autumn Statement in two months’ time is an opportunity to signal a new approach. Planned changes to tax and benefits over the next four years will take more than one pound in every ten pounds from the pockets of the poorest families. That is divisive and short-sighted, particularly with prices at the tills expected to rise.

Therefore the Chancellor should make a clear commitment to those who have been left behind by ending the freeze on working-age benefits. That would not only be morally right, but also sound economics.

It is estimated that one pound in every five pounds of public spending is associated with poverty. As well as redirecting public spending, poverty worsens the key economic challenges we face. It lowers productivity and limits spending power, which undermine the strong economy we need for the future.

Yet the human cost of child poverty is the greatest of all. When a Sure Start children’s centre is lost, it closes a door on opportunity. That is penny wise but pound foolish and it must end now.

The smarter approach is to recognise that a child’s earliest years are critical to their future life chances. The weight of expert opinion in favour of early intervention is overwhelming. So that must be our priority, because it is a smart investment for the future and it will change lives today.

This is the cause of our times. To end child poverty so that no-one is locked out of the opportunity for a better future. To stand in the way of a Government that seeks to pass by on the other side. Then to be in position to replace the Tories at the next election.

By doing so, we can answer that demand for change from people across our country. And we can provide security, opportunity, and hope to those who need it most.

That is how we can begin to build a fairer Britain.
 
 

Dan Jarvis is the Labour MP for Barnsley Central and a former Major in the Parachute Regiment.