This month’s labour market statistics continue to confound many. It’s clearly a case of ‘jobs, jobs, jobs’ though it’s probably still too early to properly assess the affects of the end of furlough and the number of ‘zombie jobs’ – the statistics cover the three month period before. Nevertheless unemployment is now at 4.3%, falling sharply towards pre-crisis levels and employment increasing. Nearly 2.2 million people have started new jobs in the summer (July to September), even though a significant amount of this is ‘churning’ -people moving out of one job and into another.
But figures also show lower labour market participation compared to before the pandemic – with a fall of nearly a million people. Around half of this is explained by fewer older people in the labour market and an increase in the number of young people remaining in full-time education. But there are also thousands of workers European workers who have left relatively low paid employment to return home. As a result the total level of employment still remains below pre-pandemic levels.
In view of the reduction in the ‘reserve army’ of labour ( unemployment probably can’t fall that much lower than 4%) it’s surprising that wages are not rising faster. On the contrary significant increases in shortage areas distort overall increases, meaning that most people aren’t earning anymore at all (and with inflation at 5% are considerably worse off). This would reflect the continued decline of ‘core’ employment backed by union representation and the increase in ‘precariat’ work at the bottom of the service sector or in the ‘gig’ economy. We’ll have to wait a bit longer for more detailed data on this though.
The data for the 18-24 age age group is more complex. Unemployment for this group has fallen (from 10.8% to 10.4%) but most of this is the result of more full-time students who’ve been looking for work, now being able to find something. Unemployment for those ‘in full-time education’ fell from 14.4 to 12.7% (it was 17.2% a year ago). Economic inactivity amongst young people continues to rise. 15.1% of those ‘not in full-time education’ are recorded as being ‘economically inactivity’. With 10% also officially ‘unemployed’ this means 1 in 4 of this group are not in the labour market.