UK unemployment continues to fall, it’s now at 4.4%, down from 4.9 % a year ago. Yet much more significant is the greater increase in the size of the workforce. For example, the most recent monthly ONS data shows a fall in unemployment of just under 160,000 over the year, but a 340 000 increase in those working.  The increased availability of part-time work with irregular hours continues to attract some of those previously ‘economically inactive’ – not in work, but not looking for it, the ONS figures show a 90 000 fall of people in this category, but the data also shows a 126, 000 increases in non-UK nationals from the EU working in the UK (bringing the total to 2.37 million). So, while unemployment may be the lowest since 1975, the UK labour market isn’t ‘tightening’ – a recent survey shows employers received an average of 24 applicants for unskilled vacancies and 19 for medium skilled. 

Karl Marx used the term ‘reserve army’ to describe the pool of semi-employed or unemployed workers who were the consequence of ‘overproduction’ and the rising organic composition of capital (the replacement of labour by machines).  Even if the concept might be a useful one, the nature of this modern reserve is now rather different. Rather than being part of Marx’s impoverished ‘lumpen’ workforce for example, research shows that migrant workers are likely to be overqualified (compared with UK nationals, a greater proportion have degrees) for the jobs they are recruited.

With new jobs as likely to be low-skilled as highly skilled (around 5 million people in total, reporting they are ‘over qualified’ for the jobs they currently hold) then the existence of large reserve army will severely limit increases in wages – as inflation rises, ‘real wages’ are now starting to fall again and predicted to fall further. Wages are also being dragged down by changes in employment status. The ONS data shows nearly 900,000 people on zero-hours contracts, despite a growing campaign against them, with 15% of people now declaring themselves ‘self-employed’ a category synonymous with low-pay.