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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Higher immigration is a success story, not a nightmare

Immigration is good news for Britain and for London. As Mayor, I'll defend it, promises Diane Abbott. 

David Cameron’s net migration target has been exposed as a stupid, reactionary and unworkable policy. And the furore over the failure to meet his own policy aim is entirely fake. It is classic scapegoating tactics, being used to distract people from the effects of government spending cuts, such as the crisis in the NHS and the increasing unaffordability of housing.

The new record of 330,000 people is a high for net migration. This is not a disaster, far from it. There is a benefit from migration in a series of areas; economically, socially and culturally. So, we should follow the German and Swedish models of welcoming migration as a key to our future prosperity.

As a candidate to be selected as Labour’s mayor for London, I welcome the growing population of London, as well as its increased energy and diversity. It’s one of the things that make London great. As the anti-austerity candidate in this race I also recognise that it is also necessary to fight for the homes, schools and NHS capacity we need to make it a great city for all.”

Instead there is an entirely fake clamour which has been generated over the inevitable failure of the Tories to meet their reactionary net migration target. All the Tories have to offer is cuts. Labour needs to offer an alternative.

Immigration helped to build London as the great city it is. I make this pledge now and if selected to be Labour’s candidate: I will reject all criticism of rising net migration and I welcome London’s growing population and diversity.

I hope all other candidates will do the same. We need to stand together and stand up to the Tory efforts to pin their own economic failures on immigrants who make a great contribution to our economy, our cultural diversity and the richness of our society. The immigration mugs of the last election were a disaster, and should never be repeated.

We need to counter the myths on migration. The majority of all international migration to Britain comes to London. Official data shows that the most recent year 201,000 international migrants came to London. Yet wages in London are the highest in Britain, about 50 per cent higher than the rest of the country. It is clearly a myth that immigration drives down wages. It is also estimated that migrants to Britain make an estimated £20bn annual contribution towards government finances.

This is in addition to the huge social and cultural contributions that immigrants have always made and continue to make.  When migrants come to Britain they are mainly coming to London. They help make it the great city it is. I will always defend and promote that. 

Diane Abbott is the shadow public health minister and the MP for Hackney North and Stoke Newington.