January labour market figures show 450,000 more people in employment, 172,000 fewer unemployed people, 75,000 fewer economically inactive people aged from 16 to 64 and government hailing a ‘jobs boost’.
Of course, any real assessment of the health of the labour market needs to examine the sort of employment that’s being created –the ONS statistics showing only 137 000 of 500 000 new jobs between September 2012 and 2013 being ‘professional scientific and technical’ and the TUC also estimating that since the end of the recession, 4 of 5 new jobs have been in low paid sectors (www.tuc.org.uk/economic-issues/labour-market/four-five-jobs-created-june-2010-have-been-low-paid-industries). So much for the ‘knowledge economy’.
Also, the earlier hysteria over the number of zero hour contracts (zero hours workers are included as ’employed’) seems to have been conveniently forgotten -ONS are due to publish an update on numbers sometime in the spring –while pay continues to lag behind inflation levels and growth rates and there’s been no real increase in productivity during recent months, confirming the significant of low paid, labour intensive jobs at the lower end of the service sector, but also a chronic under investment as business and banks hoard much of the cash created by ‘quantitative easing’ or help inflate London property prices further.
Official youth unemployment has fallen slightly. Down 38 000 for 16-24 year olds and down 34 000 for 18-24 year olds not in full-time employment, the reductions are significant but should not be overestimated. 76 000 more young people are working, although this includes 21 000 more full-time students. Official youth unemployment is still at 29%.
The continued fragility of the labour market is demonstrated by Mark Carney’s assurances that interest rates won’t be raised when unemployment reaches 7% -it’s now 7.1 %. Carney has got himself out of jail as a result of falling inflation, but as the investment starved economy reaches its maximum level of capacity, this can’t continue.