Wednesday, 14 August 2013
Unemployment figures reveal some grim truths
The unemployment figures, as they are popularly known (or Labour Market Statistics as they are officially known), reveal some insights into the state of the 'UK recovery'.
No jobs recovery in sight
Unemployment has bumped around 2.5 million now for four years. At 2.514 million, UK unemployment is at an almost identical level to two years ago - and 2,000 higher than in the first quarter of 2010, just before the 2010 election which brought the Coalition to power.
The small drop of 4,000 unemployed means at this rate it would take over 16 years for the Bank of England's target of 7% unemployment to be reached.
Furthermore, a new record was reached for the number of people working part-time who want full-time work - with 1.433 million looking for more hours. Overall, unemployment on the wider US-style U6 measure stands at over 6.8 million people (with only half a million vacancies in the economy).
Welfare policy is failing
The controversial Work Programme - the coalition's flagship privatised back to work schemes - are failing badly. Despite the tens of millions of pounds channelled to private providers such as A4e, long-term unemployment continues to grow - now reaching its highest level for over 17 years: 909, 250.
Likewise the £1 billion Youth Contract scheme seems to be having little effect (other than lining the pockets of unscrupulous employers), as youth unemployment is today 45,000 higher than when the Coalition came to power - and rose 15,000 in the last 3 months. Youth unemployment now stands at 978,000.
Worse still, the government figures include 164,000 people as 'employed' on government supported training and employment programmes - many of which are the failing workfare schemes. The numbers on the schemes rose 17,000 in the last 3 months.
Living standards continue to fall
As pointed out last month (Is the UK economy on the up?), the current recovery is particularly precarious as the recovery seems to be supported by a falling savings ratio and escalating personal debt. And the ONS stats today again highlight the enduring squeeze on wages, with regular pay rising just 1.1% in the last year.
This comes in the same week that we learned inflation is at 3.1%, rail fares will rise by 4.1% in January 2014, and that food price inflation currently stands at 4.4%.
Any sustained recovery needs to be accompanied by a sustained recovery in household incomes, but that seems as far away as ever.