Making learning and work count
Labour market LIVE from Learning and Work Institute
15 June 2016
Unemployment is 1,671,000, down 22,000 from last month’s published figure (quarterly headline down 20,000) and the unemployment rate is 5%, down 0.1 percentage points on last month and down 0.1 percentage points on last quarter.
The number of claimant unemployed is 746,100, down 400 on last month, and the claimant rate is 2.2%.
The number of workless young people (not in employment, full-time education or training) is 1,030,000, down 6,000 on the quarter, representing 14.3% of the youth population (no change on last quarter.
Youth unemployment (including students) is 621,000, down 11,000 on the quarter.
There are 2.2 unemployed people per vacancy. Learning and Work Institute estimates this figure may rise next month.
The employment rate is 74.2% (no change on last month’s published figure and up 0.1 percentage points in the preferred quarterly measure).
Learning and Work Institute comment
The labour market figures published on 15 June suggest that the labour market remains resilient, but with more action needed to tackle long-term unemployment.
Stephen Evans, Deputy Chief Executive of Learning and Work Institute, commented:
The jobs market continues to sail on relatively serenely despite choppier waters in the global economy and ongoing uncertainty surrounding the forthcoming EU referendum.
The employment rate, at 74.2%, is the joint highest since comparable records began in 1971. Employment is up 461,000 on the year, putting the Government on track to meet its manifesto commitment to 2 million new jobs over the Parliament. The unemployment rate is 5% the lowest since 2005. And economic inactivity, while flat in recent months, is down on the year as more people enter the labour force to work and look for jobs.
Average earnings also grew, albeit relatively modestly, by 2% (2.3% excluding bonuses) in the last year. This may in part reflect the introduction of the National Living Wage in April (these figures are the first to include April), giving a welcome boost to earnings for the lowest paid.
Underpinning challenges
Digging below these headlines, there are a couple of areas where the picture is a bit more mixed. The first is employment across the UK. The employment rate grew fastest in Wales and the South East, but fell quite sharply in Scotland and a little in the East of England.
The second is long-term unemployment, where falls in recent years now seem to have levelled off. Indeed, since the turn of the year there are some signs that people may be staying longer on Jobseeker’s Allowance. The proportion of JSA claimants leaving the benefit is also a little below 2014 and 2015 levels. It is not clear why this would be, but they are indicators to keep an eye on – long-term unemployment has a particularly damaging impact on people’s job, pay and career prospects.
Relevant to the EU debate, the proportion of workers that are non-UK nationals rose from 3.5% in 1997 to 10.6% in 2016, which the ONS says is primarily the result of the expansion of the EU. It is important to be clear, however, that most studies show little or no impact on the employment opportunities of UK nationals (although studies on the effect on pay are a little more mixed). There is not a fixed number of jobs in the economy and the best way to increase employment, whatever the levels of migration, is to ensure the economy grows and increase the number of people looking for work and ready for work.
Trouble ahead?
Looking ahead, the two biggest uncertainties for the labour market are the EU Referendum and slowdowns in the UK and global economies. Since 2008, employment has been strong and real earnings growth weak. There is little to suggest that this pattern will change as a result of any downturn or shock in the economy.
However, if the Government is to deliver its manifesto commitment to increase employment and halve the disability employment gap, further action is needed. On current trends it would take almost 200 years to achieve this goal: we need better employment support for disabled people and more people to access employment support. It is important the Government’s proposed Green Paper in the Autumn delivers this.
At present, the jobs market is a case of ‘keep calm and carry on’, but if we are to avoid trouble ahead we need more action to help those who’ve been out of work longest to look for and find work. That’s true regardless of who wins next week’s referendum.
Employment rose by 55,000 between November 2015 to January 2016 and February to April 2016. In the last 12 months employment has grown by 461,000.
Unemployment fell by 20,000 between November 2015 to January 2016 and February to April 2016 and the unemployment rate fell to 5.0% in the quarter the lowest level for 10 years.
The fall in the claimant count takes account of normal seasonal effects but adjusted figures are not published for local areas. The actual number of claimants, nationally, fell by 20,000 between April and May, compared to the adjusted fall of 400. Therefore, it should not be surprising that figures for local areas will show larger falls compared to the national picture.
The proportion of people leaving the claimant count (or the ‘leavers rate’) has risen. At 18.3%, it is now well below the level in early 2015 of 20.7%. The number of new claims has fallen as new claims are increasingly for Universal Credit. Jobseeker’s Allowance off-flow rates for JSA claimants of most durations reduced. Off-flow rates remain at historically high levels.
Youth unemployment is showing a quarterly fall. There are still 621,000 unemployed young people, and 405,000(5.6% of the youth population) who are unemployed and not in full-time education.
The proportion of unemployed young people (not counting students) who are not claiming Jobseeker’s Allowance or UC and therefore are not receiving official help with job search is now 50.2%.
A total of 98,000 were counted as in employment while on ‘government employment and training programmes’, where the Office for National Statistics continues to count Work Programme (etc.) participants as ‘in employment’ by default. This number fell 1,000 this quarter. Self-employment rose 42,000 this quarter and remains at a historically high proportion of employment. Employee numbers rose 4,000 in the quarter. Involuntary part-time employment fell this quarter by 21,000 to 1.2 million, 14.3% of all part-time workers.The proportion remains around double that in 2004.
