One major benefit of the economic recovery has been the consistent drop in unemployment figures, which today reached their lowest level since late 2008. According to the Office for National Statistics (ONS), this is largely due to the past year yielding the largest annual fall in unemployment since records began.
Since January 2014, the number of people without steady work in the country fell by 538,000 to reach just 1.97 million by the end of August. This has seen the unemployment rate drop to 6 per cent, a strong indicator that the country is well on its way to achieving long term economic stability following the longest recession in living memory.
The fall in unemployment during the three months to the end of August amounted to 0.2 per cent, surprising City analysts who had predicted a 0.1 per cent slide. Thanks to the global difficulties facing companies within the manufacturing and industrial sectors they had expected to see a significant reigning back in hiring processes, but the opposite turned out to be true with the manufacturing industry taking on more workers than many others within the economy.
Employment minister Esther McVey welcomed the findings by the ONS, saying; “Today’s record figures show that the government’s long term economic plan to help businesses create jobs and get people working again is proving successful.”
This sentiment was echoed by chief secretary to the Treasury, Danny Alexander, who added; “Britain is fast becoming the job creation capital of the Western economies.
“Because our recovery plan is working, so is the country and in record numbers.”
As unemployment has now reached a near-record low, employment figures have risen correspondingly. A record 30.76 people in the UK are now classed as full, part time or self-employed, with part time positions rising fastest to reach a record high of 6.8 million.
Unfortunately, not all aspects of the ONS’s report were as resoundingly positive as the employment figures, as low wage growth remains the key issue for the majority of British workers. Average weekly earnings excluding bonuses in the past quarter rose by just 0.9 per cent when compared to the same period in 2013, meaning that wage growth is continuing to lag well behind the official rate of inflation at 1.2 per cent.
This prompted shadow work and pensions secretary, Rachel Reeves, to claim that the “pay squeeze on working people continues”, which in turn has created fears that low wage growth will have repercussions upon the economic recovery if further prolonged.
Although consumers are now more confident about spending, and big ticket items remain in high demand, the retail industry is by no means secure enough to confidently sail through another dip in consumer spending.
With businesses increasingly signing up to pay the Living Wage and employment at an all-time high, it is hoped that wages will soon catch up with advancements made elsewhere in the economy. If not, Government intervention may be required to ensure recovery remains on track.
