Record Employment: but the NEETs are still here

thONS figures published last week show a record number of people working – 32.7 million or 76.1% of the population. At 3.9%, unemployment has hit its lowest level since 1975 while the number of those ‘economically inactive’ – people not looking, or not able to work has also never been lower.

But if ‘full-employment’ in post-war Britain was considered a sign of prosperity – it’s certainly not the case now – even if, as the labour market tightens, real wages are beginning to edge upwards. Like others  across Europe, the UK economy is barely growing  and  productivity rates continue to be abysmal.

Some economists are arguing that the Brexit chaos has meant firms are relying on additional labour to maintain output levels rather than invest in the new technology necessary to raise productivity. This isn’t really true. The UK has been a low skilled and low-pay economy for years, while the manufacturing sector – where benefits of automation (sometimes described as a ‘Second Machine Age’) are most apparent, now provides a small fraction of the employment that it once did.

A significant part of the growth in employment over recent years has been fuelled by the increase in self-employment, particularly part-time self-employment.  But part-time self-employed workers are also amongst the lowest paid. It’s also the case, as European immigration begins to level off, that rather than having to recruit from the dole queue employers are benefitting from other groups increasingly making themselves available to work.  One example of this is the increase in older people (especially older women) re entering the workforce, in many cases because they can’t afford to live on pensions, or are having to wait longer for them, as a much as a desire to work.

Many of these new recruits will go into low paid employment. The Resolution Foundation has estimated that 6.2 million, or 23 per cent of all employees earned less than the ‘Living Wage’, the voluntary measurement that aims to provide a minimum acceptable standard of living. Average pay may be going up, but increases are not being distributed evenly.

One of the groups still remaining marginalised from the labour market however, is young people. The unemployment rate for those under 24 is at just under 12% , three times that for the population as a whole, but more significantly (youth unemployment figures include full-time students looking for part-time work) between October to December 2018, there were 788,000 young people (11.3% of those aged 16 to 24 years) in the UK identified as  NEET,  (Not in Education, Employment or Training ) – this number increased by 31,000 from July to September 2018.  Only 40% of NEETs are recorded as being officially ‘unemployed’.

Other government analysis shows that young people aged 16 to 24 years represent nearly three quarters of 3.6 million adults in the UK, who have never had a paid job. Even excluding those in full-time study, more than half of people who have never carried out paid work are aged under 30 years.

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