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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Like it or hate it, it doesn't matter: Brexit is happening, and we've got to make a success of it

It's time to stop complaining and start campaigning, says Stella Creasy.

A shortage of Marmite, arguments over exporting jam and angry Belgians. And that’s just this month.  As the Canadian trade deal stalls, and the government decides which cottage industry its will pick next as saviour for the nation, the British people are still no clearer getting an answer to what Brexit actually means. And they are also no clearer as to how they can have a say in how that question is answered.

To date there have been three stages to Brexit. The first was ideological: an ever-rising euroscepticism, rooted in a feeling that the costs the compromises working with others require were not comparable to the benefits. It oozed out, almost unnoticed, from its dormant home deep in the Labour left and the Tory right, stoked by Ukip to devastating effect.

The second stage was the campaign of that referendum itself: a focus on immigration over-riding a wider debate about free trade, and underpinned by the tempting and vague claim that, in an unstable, unfair world, control could be taken back. With any deal dependent on the agreement of twenty eight other countries, it has already proved a hollow victory.

For the last few months, these consequences of these two stages have dominated discussion, generating heat, but not light about what happens next. Neither has anything helped to bring back together those who feel their lives are increasingly at the mercy of a political and economic elite and those who fear Britain is retreating from being a world leader to a back water.

Little wonder the analogy most commonly and easily reached for by commentators has been that of a divorce. They speculate our coming separation from our EU partners is going to be messy, combative and rancorous. Trash talk from some - including those in charge of negotiating -  further feeds this perception. That’s why it is time for all sides to push onto Brexit part three: the practical stage. How and when is it actually going to happen?

A more constructive framework to use than marriage is one of a changing business, rather than a changing relationship. Whatever the solid economic benefits of EU membership, the British people decided the social and democratic costs had become too great. So now we must adapt.

Brexit should be as much about innovating in what we make and create as it is about seeking to renew our trading deals with the world. New products must be sought alongside new markets. This doesn’t have to mean cutting corners or cutting jobs, but it does mean being prepared to learn new skills and invest in helping those in industries that are struggling to make this leap to move on. The UK has an incredible and varied set of services and products to offer the world, but will need to focus on what we do well and uniquely here to thrive. This is easier said than done, but can also offer hope. Specialising and skilling up also means we can resist those who want us to jettison hard-won environmental and social protections as an alternative. 

Most accept such a transition will take time. But what is contested is that it will require openness. However, handing the public a done deal - however well mediated - will do little to address the division within our country. Ensuring the best deal in a way that can garner the public support it needs to work requires strong feedback channels. That is why transparency about the government's plans for Brexit is so important. Of course, a balance needs to be struck with the need to protect negotiating positions, but scrutiny by parliament- and by extension the public- will be vital. With so many differing factors at stake and choices to be made, MPs have to be able and willing to bring their constituents into the discussion not just about what Brexit actually entails, but also what kind of country Britain will be during and after the result - and their role in making it happen. 

Those who want to claim the engagement of parliament and the public undermines the referendum result are still in stages one and two of this debate, looking for someone to blame for past injustices, not building a better future for all. Our Marmite may be safe for the moment, but Brexit can’t remain a love it or hate it phenomenon. It’s time for everyone to get practical.