There is still a long way to go before we return to the pre-crisis world
While GDP data suggest fragilities, labour market figures continue to show robust growth in employment and the strongest earnings growth figure for four years.
But the labour market that has evolved since the crisis is a very different place , and a much tougher one.
While overall employment rates are at record levels, underemployment is still severely elevated and there has been a major shift to part-time and self-employment work.
A brief period of real earnings gains does not make up for six years of losses.
Over the past year or so the gains in the labour market have been in full-time employee posts, with the latest annual growth figure at 2.4 per cent, the third quarter of above 2 per cent annual growth.
Rates in this territory were last seen in 1997 and 2004. But taken as a share of the 16+ population, there is still a way to go before full-time employees return to rates that were the norm for the decade ahead of the crisis.
Full time employees as a share of the (16+) population, per cent
(click to enlarge)
On earnings, both total and regular (i.e. excluding bonuses) pay figures show earnings growth of 2.7 per cent on the year. As widely reported, these are the highest rates for four years, though they are still way below long-standing norms for earnings growth of around 4 per cent.
But with inflation now close to zero, real earnings rates are now approaching three per cent, above historic norms. Still these are far from normal conditions, reliant on exceptional inflation outcomes about which there is still much uncertainty on both the outlook and interpretation.
Moreover, on the longer-standing view, real earnings remain greatly below pre-crisis outcomes.
Real earnings, index 2008=100
(click to enlarge)
It is difficult to be exact about the timing and extent of the fall, but very roughly earnings declined for six years by close to 10per cent (the figure used by the governor of the Bank of England in his speech to Congress in September 2014).
Even if real earnings continued to rise at three per cent a year (a very tall order given planned cuts) it would still take until around the end of this parliament to restore pre-crisis peaks: a decade lost to ideologically-motivated cuts.
Geoff Tily is a senior economist at the TUC
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