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.

Ukip's Nigel Farage and Paul Nuttall. Photo: Getty
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Is the general election 2017 the end of Ukip?

Ukip led the way to Brexit, but now the party is on less than 10 per cent in the polls. 

Ukip could be finished. Ukip has only ever had two MPs, but it held an outside influence on politics: without it, we’d probably never have had the EU referendum. But Brexit has turned Ukip into a single-issue party without an issue. Ukip’s sole remaining MP, Douglas Carswell, left the party in March 2017, and told Sky News’ Adam Boulton that there was “no point” to the party anymore. 

Not everyone in Ukip has given up, though: Nigel Farage told Peston on Sunday that Ukip “will survive”, and current leader Paul Nuttall will be contesting a seat this year. But Ukip is standing in fewer constituencies than last time thanks to a shortage of both money and people. Who benefits if Ukip is finished? It’s likely to be the Tories. 

Is Ukip finished? 

What are Ukip's poll ratings?

Ukip’s poll ratings peaked in June 2016 at 16 per cent. Since the leave campaign’s success, that has steadily declined so that Ukip is going into the 2017 general election on 4 per cent, according to the latest polls. If the polls can be trusted, that’s a serious collapse.

Can Ukip get anymore MPs?

In the 2015 general election Ukip contested nearly every seat and got 13 per cent of the vote, making it the third biggest party (although is only returned one MP). Now Ukip is reportedly struggling to find candidates and could stand in as few as 100 seats. Ukip leader Paul Nuttall will stand in Boston and Skegness, but both ex-leader Nigel Farage and donor Arron Banks have ruled themselves out of running this time.

How many members does Ukip have?

Ukip’s membership declined from 45,994 at the 2015 general election to 39,000 in 2016. That’s a worrying sign for any political party, which relies on grassroots memberships to put in the campaigning legwork.

What does Ukip's decline mean for Labour and the Conservatives? 

The rise of Ukip took votes from both the Conservatives and Labour, with a nationalist message that appealed to disaffected voters from both right and left. But the decline of Ukip only seems to be helping the Conservatives. Stephen Bush has written about how in Wales voting Ukip seems to have been a gateway drug for traditional Labour voters who are now backing the mainstream right; so the voters Ukip took from the Conservatives are reverting to the Conservatives, and the ones they took from Labour are transferring to the Conservatives too.

Ukip might be finished as an electoral force, but its influence on the rest of British politics will be felt for many years yet. 

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