Don’t get carried away with headline fall in unemployment

Subtantial progress may not come until 2013

The drop in the latest unemployment figures is good news. It is the first time unemployment has fallen in ten months. But underneath the headline fall is bad news for women and some worrying trends that make substantial progress over the next year very unlikely.

Today’s fall in the overall jobless count masks a continuing rise in female unemployment, now higher than at any point since 1987. Since last month’s figures, there are an extra 8,000 women unemployed and 27,000 more women out of work for more than a year. In total, there are now more than a million women (1,136,000) unemployed, the highest since 1987 and a rise of 100,000 over the last year. Of those, over a quarter (29 per cent) of women (327,795) have been unemployed for more than a year.

Long term unemployment continues to rise, reaching its highest level since 1996. Overall, long term unemployment rose 26,000, the highest level since 1996, to a total of 882,821. While 1,000 men have left long-term unemployment, there are now 27,000 more women who have been out of work for more than a year. IPPR predicts there will be almost a million unemployed for more than a year by the end of 2012. There is a real risk that these people will struggle to take advantage of any upturn in the economy.

While youth unemployment has fallen by 9,000, there are still more than a million (1,033,440) young people (aged 16-24) unemployed, the second highest since comparable records began in 1992. Of those, 263,000 young people (aged 16-24) have been unemployed for more than a year. The Youth Contract has now begun, but it has a huge job to do.

Almost half a million (430,672) people over 50 are now unemployed, up 42,000 in the last year. More than 40 per cent of unemployed over fifties have been out of work for more than a year, up 13,000 over the last year to 189, 593. It’s going to be very tough indeed for over 50s out of work for more than a year to fund new jobs, even when the economy bounces back.

There has also been a rise in part-time work, which rose by 80,000 while the level of full-time employment fell by 27,000. There are now 1.4 million people working part-time because they say they cannot get longer hours.

Public sector employment contracted by 270,000 last year, while private sector employment increased by just 226,000. The resulting gap means rising unemployment. The economy is not being rebalanced by public sector job cuts because growth in the private sector continues to lag. There are actually 19,000 fewer vacancies in the economy than there were a year ago. Looking ahead, there is going to be a rise of 100,000 in unemployment this year, according to IPPR analysis of the latest forecast from the Office for Budgetary Responsibility.

This is already hitting the north of England hard. Over the last year, unemployment is up 22 per cent in the North West (an extra 57,000 out of work) and up 11 per cent in the North East (an extra 14,000 out of work). The chancellor is wasting the opportunity to boost national prosperity by ignoring the economic potential of the north.

The priority for the government must be to prevent long term unemployment, with a job guarantee, and to support women to get back to work, by prioritising childcare. There is light at the end of the tunnel, but that tunnel stretches well into 2013. Before it gets substantially better, it’s going to get worse.

Boarded up shops wait for redevelopment in the Hanley Shopping Centre in Stoke-On-Trent. Credit: Getty

Richard Darlington is Head of News at IPPR. Follow him on Twitter @RDarlo.

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George Osborne takes up job at BlackRock - but what does it mean for politics?

The former Chancellor insists he hasn't forgotten about the Northern Powerhouse.

George Osborne is to take up a part-time role at asset management giant BlackRock.

The former Chancellor is understood to have been hired by the chief executive of the world's biggest investor, Larry Fink. He will be working alongside his former economic adviser Rupert Harrison.

The appointment has been approved by the Independent Appointments Committee and Osborne intends to continue as a backbench MP.

He said: "I am excited to be working with the BlackRock Investment Institute as an adviser. BlackRock wants better outcomes for pensioners and savers - and I want to help them deliver that. It's a chance for me to work part-time with one of the world's most respected firms and a major employer in Britain. 

"The majority of my time will be devoted to being an MP, representing my constituents and promoting the Northern Powerhouse.  My goal is to go on learning, gaining new experience and get an even better understanding of the world."

Once tipped as a future Prime Minister, Osborne's career ambitions were stymied after he backed Remain in the EU referendum and was sacked in Theresa May's Cabinet reshuffle. Whether he will find the halls of fund managers more comfortable than the green back benches is yet to be seen, but for now he has been clear he intends to continue his constituency duties. 

He will work at the BlackRock Investment Institute, which researches geopolitical, technological and economic trends. 

He is expected to provide insights on European politics and policy, Chinese economic reform, and trends such as low yields and longevity and their impact on retirement planning. 

While the pay packet has not been officially confirmed, Sky News quoted a source saying it would be hundreds of thousands of pounds.

But the move will also place a pro-Remain former Chancellor at the heart of the City of London, just as his Tory front bench is losing its support over Brexit negotiations.

Speaking shortly after the EU referendum vote, BlackRock chief executive Fink said he "didn't get a lot of sleep" the night of Brexit, and that the decision had led to greater uncertainty. 

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.