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Cath Everett

Sift Media

Freelance journalist and former editor of HRZone

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Analysis: Increasingly fragile UK jobs market set to get “much worse”

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The latest official figures paint a picture of “increasing fragility” in the UK jobs market, which is set to get “much worse” over the year ahead.

According to the Office for National Statistics, unemployment rose by 118,000 in the three months to November, accounting for 2.69 million or 8.4% of the total workforce, up from 8.3% in the prior quarter – the highest level experienced since January 1996.
 
Although there was a slight increase of 18,000 in the total number of people in work (29.12 million), the levels of those who were ‘under-employed’ – working part-time because they are unable to find full-time work – jumped by 44,000 to reach 1.31 million – the highest figure since records began in 1992.
 
On the plus side, the number of workers claiming Jobseeker’s Allowance in December grew by a lower than expected 1,200 to hit 1.6 million, while there was also a small 10,000 drop in long-term unemployment taking the figure to 857,000. Moreover, 101,000 more people became self-employed to reach a total of 4.14 million, although such growth largely consisted of part-time ‘odd-jobbers’ who would have taken paid work from an employer if they could.
 
On the downside, however, joblessness rates among young people jumped by 52,000 to an astronomical 22.3%, taking the number of 16 to 24 year olds without work to 1.04 million. The figure included 313,000 youths in full-time education who wanted a job – the highest since comparable records began in 1992.
 
Total pay, including bonuses, meanwhile, rose by 1.9% compared with a year earlier, but was down 0.2% on the three months to October 2011. November’s public sector strike over pensions also saw the equivalent of 988,000 working days lost to industrial action, the highest level since 1989 when Margaret Thatcher was in power.
 
The Employment Minister, Chris Grayling, acknowledged that today’s ONS figures were worrying. “The overall level of unemployment is, and will remain, a major concern for the Government. Despite the exceptionally difficult economic circumstances, finding work for the unemployed will remain top of the Government’s agenda,” he told the BBC.
 
John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development, was equally downbeat. He pointed to a “mixed picture” in which overall employment grew “only because there were more unpaid family workers and more people employed on government schemes. In total, full-time employment has fallen, while part-time employment has increased”.
 
Rising numbers of ‘odd jobbers’
 
But with total unemployment levels, which included youth worklessness, still on the up, subdued growth in average earnings and regions such as the North East of England seeing worklessness rates of a shocking 12%, “it’s clear that the UK jobs market is in a very sorry state”, Philpott said.
 
In fact, he added: “There is nothing in these latest jobs figures that makes us feel any more optimistic about our forecast for this year, which points to 2.85 million (8.8%) by the end of 2012.”
 
A report released by the CIPD today to coincide with the publication of the ONS figures also provided cold comfort to a Coalition Government that professes itself keen to promote an entrepreneurial culture in the UK.
 
The study entitled ‘The rise in self-employment’ revealed that, by autumn 2011, the number of people who were self-employed had hit a record 1.14 million, or 14.2% of the entire workforce, compared with 0.3 million or 8% in spring 2008. To offset these figures, there was also a corresponding fall of 0.7 million, or -3%, in the number of individuals in paid work.
 
Interestingly, however, although well over two thirds of self-employed people are men, women have accounted for a huge 60% (184,000) of the net rise in self-employment since the start of the recession. While skilled tradespeople, typified by ‘white van man’, form the single largest group of self-employed at nearly 30%, they made up less than 1% of the net increase.
 
Instead unskilled workers accounted for a further 20% plus of the net rise, while the proportion of employees in administrative, secretarial and personal services-based industries also grew significantly.
 
Philpott said: “The typical self-employed person in Britain today remains a skilled tradesman, manager or professional working long hours on the job. But since the start of the recession, the ranks of the self-employed have been swelled by people from a much wider array of backgrounds and occupations, including many ‘handy men’ without skills, picking up whatever bits and pieces of work are available.”
 
While it was positive that these “odd jobbers” were helping to keep a lid on unemployment in a “very weak labour market”, their emergence hardly suggested a “surge in genuine entrepreneurial zeal”, he added.
 
“While some of these newly self-employed may make a long-term commitment to being their own boss, or at least gain the necessary experience to do so, it’s likely that most would take a job with an employer if only they could find one,” Philpott said.
 
 
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Cath Everett

Freelance journalist and former editor of HRZone

Read more from Cath Everett
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