The national unemployment rate was a cause for concern during the recession, as retail chains succumbing to administration began to lay staff off in earnest following multiple store closures. However, unusually, the recession did not seem to cause stable businesses to cut staffing numbers – on the contrary, many firms chose to “stockpile” staff for the time when the economic difficulties came to an end, thus surprising experts who forecast queues outside job centres harking back to the financial crash of the 1980s.
The number of people searching for employment has dropped
Yet while the employment rate seemed pleasantly buoyant, this hid several concerning trends. The number of workers taking part time jobs soared due to businesses cutting back on opening hours and permanent full time positions, while many employees nationwide claimed their workplace was not giving them enough tasks or hours to keep them occupied during the day; leading to a phenomenon known as underemployment. Furthermore, pay freezes and high inflation meant that, even for those who acquired full time positions, earning a proper living wage was incredibly difficult.
However, with the end of the recession came large scale improvement in the eyes of the British workforce. Inflation dropped rapidly in the two months to December, while the retail industry began to move forward again thanks to an increase in consumer confidence during the run up to Christmas.
Now, the Office of National Statistics has revealed a further nugget of good news – between August and October the number of people searching for employment dropped by 82,000 to 2.51 million. This makes this period the largest quarterly drop in the unemployment rate since 2001, putting Britain firmly on the path to economic recovery.
Meanwhile, the increase of 40,000 workers put the total number of employees in the UK up to 29.6 million; another record, as this is the highest number of national workers since 1971 when the records began.
Minister for work and pensions, Mark Hoban, said; “We see more people looking for work and actually finding work, so I think there’s a really strong labour market there.
“I think there’s more flexibility in the labour market, although this month we’ve seen a big increase in full time jobs and no movement at all in the number of part time jobs.”
The growing number of workers in part time employment became a real concern several months ago, as the lack of work in the UK forced ever increasing numbers to take positions with fewer hours than they would have liked. This meant, obviously, that earning a living wage was out of the question so many households were forced to slash budgets and rely on state benefits to make up the deficit in their pay packets.
Unfortunately, it seems that while pay is at least climbing year upon year, the rate of growth is stagnant to say the least. And with the cost of essentials such as gas and transport due to increase in 2013, families will still have to keep a close eye on their budgets to avoid falling into debt.
James Knightley of ING believes that this week’s results will give consumers a boost in confidence, with the lack of pay growth being the only downside.
He says; “The main disappointment was the fact that despite the gains in employment, there is no pick up in wage growth, which remains at 1.8 per cent year on year.
“The fact that UK employment is rising, consumer confidence is up and anecdotal evidence of retail sales haven’t been too bad, offers some hope that the domestic situation in the UK is stabilising.”
However Liam Byrne, the shadow minister for work and pensions, claims that the Government should be doing more to help families struggling to pay for essentials and that the unemployment rate is not falling fast enough.
He says; “Pay packets are under intense pressure as the pace of jobs growth slows down – wages are now growing at only half the rate of prices.
“Families are under real pressure right now and what today’s figures show is that the Department for Work and Pensions’ big back to work programmes are frankly delivering nothing.”
Is the falling rate of unemployment truly a sign that the UK economy is recovering or is it masking underlying problems such as underemployment and a lack of disposable income in the average household? Will unemployment rise again in the New Year as seasonal workers are laid-off? Share your thoughts with us below.
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