Real wages down and unemployment stubbornly high, but could that be good news?

Unemployment's fall has stopped, but that could signal a recovery in productivity.

The ONS has released the latest labour market statistics, showing a 0.2 percentage point decline in the unemployment rate to 7.8 per cent in the last three months (2.51 million unemployed people, down by 57,000 people). The employment rate, however, was also down by 0.1 percentage points to 71.4 per cent over the same period (29.71 million employed people, up by 17,000 people).

Other headline stats show long term unemployment increasing by 15,000 to the highest level since 1996, youth unemployment decreasing by 0.2 percentage points to 20.9 per cent, and total pay increasing by 1.7 per cent, leading to a 1 per cent decrease in real wages.

As you can see from the first graph above, the quarter-on-quarter fall in unemployment is largely reversing the rise that was reported this spring. If you look at the month-on-month statistics, designated as "experimental" by the ONS due to their habit of fluctuating fairly wildly, we can see that unemployment was down by slightly over half a percentage point since April.

That's important, because it adds further support to the theory that the long-term improvement in the labour market has been replaced by stagnation. Economics reporters tend to focus on the fact that unemployment is down from a high of 8.4 per cent, even against a background of stagnant GDP. And indeed, for over a year, that decline was nearly constant. But the unemployment rate hit a low in December of last year, and since then it has been fluctuating in the high sevens.

That's bad news for Cameron and Osborne, because falling unemployment was frequently used as a fig leaf to cover the atrocious GDP growth. All the signs indicate that next week's GDP figures will be good, but they may not be good enough.

But it might paradoxically be good news for the country. The disconnect between employment and growth was due to productivity in Britain plummeting. In simple terms, a British worker doing an hour's work simply wasn't producing as much value after the recession as they were before. There's a lot of theories as to why, ranging from low morale and lazy workers to insipid investment and low demand, but regardless of why, they all point to the same conclusion: if GDP is to properly take off, productivity has to recover. The hope is that slowing decline in unemployment could be because the recovery is coming to productivity; and our catch-up growth might finally be around the corner.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Why I’m thinking of joining the Labour Party

There’s a lot to admire in the direction Jeremy Corbyn is taking the party – perhaps it’s time to get involved.

Why I'm leaving Labour”, as Owen Hatherley remarked a few days ago, appears to be the new “why I’m leaving London”. However, aside from a few high(ish) profile departures, the bigger story is the net increase in membership of 90,000 that Labour has enjoyed since Jeremy Corbyn became leader. Indeed, the last few weeks have got me seriously considering whether I should add to these impressive numbers and join the party myself.

For me, one of the most cheering pieces of news since Corbyn’s victory was the convening of an advisory committee to shadow chancellor John McDonnell, including policy and academic heavyweights such as Mariana Mazzucato, Ann Pettifor, Joseph Stiglitz and Thomas Piketty. It was a clear indication that some fresh and serious thought was going to be put into the creation of a plan for remaking and rejuvenating the British economy. The early signs are that Labour will be offering a dynamic, high-tech economy of the future, with good pay and job security at its heart, which will stand in sharp contrast to the miserable Randian dystopia George Osborne has been pushing the country into during his time at the Treasury.

Also refreshing has been Corbyn’s use of Prime Minister’s Questions to give a voice to those affected by austerity. Given that our media and political class is disproportionately populated by people from privileged backgrounds, it’s really important that an extra effort is made to ensure that we hear first-hand from those bearing the brunt of these policies. It’s right in principle, and it turns out to be good politics as well. Because apparently many Conservative MPs are too stupid to realise that responding to the concerns of working class people with loud, derisive braying merely provides the public with a neat and powerful illustration of whose side each party is on.

Corbyn has taken a lot of flak in the media, and from MPs on the Labour right, for his response to the Paris attacks. But as someone who researches, teaches and writes on British foreign policy, Middle East politics and security issues, my admiration for the Labour leader has only grown in recent days.  

In the atmosphere immediately after a terrorist atrocity, a discourse emerges where caring about the victims and being serious about dealing with the threat are taken to be synonymous with advocating military responses and clampdowns on civil liberties, irrespective of the fact that fourteen years of pursuing this approach under the “war on terror” has only served to make the problem far worse. At times like these it takes a great deal of courage to articulate a careful, cautious approach emphasising non-military forms of action that address root causes and whose effects may be less dramatic and immediate. Many people were simply not in the mood to hear this sort of thing from Corbyn, but his policies are objectively more likely to make us safer, and I admire him for not being intimidated into silence despite the gallons of vitriol that have been poured on him.

In general, on national security, there is something heavily gendered about the narrative that casts the alpha male Cameron keeping Britain safe versus the dithering milquetoast Corbyn who doesn't understand the harsh realities. We reached the nadir of this stone age machismo during the last election campaign when Very Serious Jeremy Paxman put it to Ed Miliband that he couldn’t have Vladimir Putin in a fight.  After the disasters of the last decade and a half, the time is right to articulate a more intelligent, sophisticated alternative to the expensive, counterproductive militarism of the Conservative Party and the Labour right wing.

The question of whether Corbyn can win an election is certainly one that preoccupies me. He will struggle to attract voters to his right just as Yvette Cooper, Andy Burnham or Liz Kendall would have struggled to win back votes Labour lost to the SNP and the Greens. Enthusing and rallying the perhaps 30 per cent of the electorate who are broadly on the left is one thing, but adding the other 6-7 per cent that you need to win an election is another challenge altogether. Corbyn and his team have been on a steep learning curve since their shock victory in September, and they urgently need to clarify their message and improve their media strategy. Almost all the corporate press are bound to remain hostile, but there are ways to provide them with as little ammunition as possible.

More importantly, Corbyn’s team need to find ways of connecting directly with the public and bring them actively into what he's trying to do. In the current anti-politics mood, an opposition party based on a genuine, engaged mass movement could be a formidable force. Initiatives like “Momentum” will need to make quick and substantial progress.

Fundamentally, Corbyn’s Labour has to do what everyone concerned with genuine social progress has had to do throughout history: articulate points of view that go against prevailing orthodoxy, and do so in as persuasive a way as possible. By definition, these are battles against the odds. But you can't win them if you don't fight them. And for me, and I think most people on Corbyn's part of the left, five years of austerity have taken us beyond the point where we can accept the least worst version of the status quo. That prospect has simply become too painful for too many people.

So will I join? I’m still unsure. Without doubt there will be times when the leadership needs constructive, even robust criticism, and as a writer and researcher I may feel more free to articulate that outside of the Labour tribe. But whatever choice I make, the point for me is that this isn’t really about Jeremy Corbyn so much as the wider movement he represents, demanding a real change of course on politics, economics and foreign policy. That collective effort is something I will certainly continue to play an active part in.

David Wearing researches UK-Saudi-Gulf relations at the School of Oriental and African Studies, where he teaches courses on Middle East politics and international political economy. He sits on the steering committee of Campaign Against Arms Trade.