There is no longer a "jobs puzzle": Britain's labour market improvement has stagnated

Unemployment has stalled – and other statistics are even worse.

A mesofact is a piece of knowledge which changes slowly. The term was coined by Samuel Arbesman, who describes it as lying somewhere between a fact which stays the same – like the height of Everest – and a fact which is constantly in flux – like the weather. The example Arbesman gives is of the population of the world; when I was a child, I learned it was 6 billion people. When my mother was a child, it was around half that. Yet it isn't a fact which changes fast enough that we bother rechecking every time we state it; and so the truth runs away from us.

It's a similar risk to the one I brought up in April, about the risks of imprecision. It may be easier to estimate things like the cost of welfare fraud to the economy as "small" or "large"; but if you present merely qualitative values, then the ability to continuously refine them if they change in small increments is lost. It's hard enough to keep track of the fact that the world's population increased by a billion in the last ten years; it would be that much harder to work out when it went from "large" to "very large".

I am reminded of this by yesterday's unemployment figures. It seems that there is a mesofact developing, which is that unemployment is falling quickly. It's been a puzzle in British economics for a while: there is job growth, but no economic growth. Why is that?

We've given various suggestions here, raging from productivity collapse to underemployment; and today, the BBC's Stephanie Flanders offers the possibility that it's due to falling wages.

But I worry that Britain's economic commentariat are struggling to explain a fact which just is no longer the case. Take a look at the unemployment rate since February 2008:

You can clearly see the steady decline which prompted the debate. Between Nov 2011 and Nov 2012, the unemployment rate fell nearly continuously, from 8.4 per cent to 7.7 per cent. Against the background of an economy which was stagnant, and sometimes actually contracting, that was a mystery.

But for the last six months, that fall has halted. Unemployment is actually sitting at 7.8 per cent in the latest release, for the three months to April, 0.1 per cent higher than its low. There is no mystery. Our economy is weak, and so is our labour market. Unemployment is stuck at over two per cent above its pre-crisis norm. That's a disaster.

There is one important statistic where the narrative of continued, slow, improvement does shine through; that's the vacancy rate, the number of people unemployed for every vacancy:

It stands at 4.9 people, the lowest since February 2009. That's good news; but talking about the vacancy rate exposes another flaw in government thinking. Whenever the rate is substantially higher than one, discussing unemployment as a personal failing is utterly nonsensical. If every job available was filled instantly, there would still be over 2 million people unemployed.

So why even bother with policies like the Work Programme, which aim to increase the employability of people without jobs? The vacancy rate shows that the most important thing to do is increase the supply of jobs, not increase the employability of unemployed people.

Speaking to Work Programme providers, they highlight a different aim of the scheme. Rather than targeting unemployment in general, the point of skills-based training is to get people in long-term unemployment back into work – even if that means they take a job which would otherwise have gone to someone who has been unemployed for a shorter length of time.

But that's where the worst news of all in yesterday's release comes in. Because since the government began its workfare blitz, the proportion of unemployed people out of work for over a year has gone up:

If you need a reminder of how scarring long-term unemployment is, just remember this paper from April:

The first thing employers look at is how long you've been out of work, and that's the only thing they look at if it's been six months or longer.

The labour market isn't getting better. And on the most important measure of all, it's getting much, much worse.

Stephen Hester, just the latest unemployed Briton. Photograph: Getty Images

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

Photo: Getty Images
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The Fire Brigades Union reaffiliates to Labour - what does it mean?

Any union rejoining Labour will be welcomed by most in the party - but the impact on the party's internal politics will be smaller than you think.

The Fire Brigades Union (FBU) has voted to reaffiliate to the Labour party, in what is seen as a boost to Jeremy Corbyn. What does it mean for Labour’s internal politics?

Firstly, technically, the FBU has never affliated before as they are notionally part of the civil service - however, following the firefighters' strike in 2004, they decisively broke with Labour.

The main impact will be felt on the floor of Labour party conference. Although the FBU’s membership – at around 38,000 – is too small to have a material effect on the outcome of votes themselves, it will change the tenor of the motions put before party conference.

The FBU’s leadership is not only to the left of most unions in the Trades Union Congress (TUC), it is more inclined to bring motions relating to foreign affairs than other unions with similar politics (it is more internationalist in focus than, say, the PCS, another union that may affiliate due to Corbyn’s leadership). Motions on Israel/Palestine, the nuclear deterrent, and other issues, will find more support from FBU delegates than it has from other affiliated trade unions.

In terms of the balance of power between the affiliated unions themselves, the FBU’s re-entry into Labour politics is unlikely to be much of a gamechanger. Trade union positions, elected by trade union delegates at conference, are unlikely to be moved leftwards by the reaffiliation of the FBU. Unite, the GMB, Unison and Usdaw are all large enough to all-but-guarantee themselves a seat around the NEC. Community, a small centrist union, has already lost its place on the NEC in favour of the bakers’ union, which is more aligned to Tom Watson than Jeremy Corbyn.

Matt Wrack, the FBU’s General Secretary, will be a genuine ally to Corbyn and John McDonnell. Len McCluskey and Dave Prentis were both bounced into endorsing Corbyn by their executives and did so less than wholeheartedly. Tim Roache, the newly-elected General Secretary of the GMB, has publicly supported Corbyn but is seen as a more moderate voice at the TUC. Only Dave Ward of the Communication Workers’ Union, who lent staff and resources to both Corbyn’s campaign team and to the parliamentary staff of Corbyn and McDonnell, is truly on side.

The impact of reaffiliation may be felt more keenly in local parties. The FBU’s membership looks small in real terms compared Unite and Unison have memberships of over a million, while the GMB and Usdaw are around the half-a-million mark, but is much more impressive when you consider that there are just 48,000 firefighters in Britain. This may make them more likely to participate in internal elections than other affiliated trade unionists, just 60,000 of whom voted in the Labour leadership election in 2015. However, it is worth noting that it is statistically unlikely most firefighters are Corbynites - those that are will mostly have already joined themselves. The affiliation, while a morale boost for many in the Labour party, is unlikely to prove as significant to the direction of the party as the outcome of Unison’s general secretary election or the struggle for power at the top of Unite in 2018. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.