Today’s labour market figures show that although a fragile labour market recovery may be starting, the fact that many are still facing unemployment and persistent long-term worklessness remains a significant risk.
Today’s labour market figures show that although a fragile labour market recovery may be starting, the fact that many are still facing unemployment and persistent long-term worklessness remains a significant risk. While headlines have focused on the 23,000 quarterly increase in unemployment – the change from October-December 2009 to February-April 2010 – the change on the month is more positive, with a fall of 38,000 in the number of people unemployed on the ILO measure between February and March.
Employment levels, which showed a 5,000 increase on the quarter, have also been rising for the last two months, by 5,000 between January-February and by a positive 36,000 between February and March. This could be a sign that a labour market recovery is starting. However, the data also show how fragile this progress is.
Total employment in the public sector fell on the quarter, for the first time since the recession started, although falls in parts of the public sector have been evident for some time, and across education and health – sectors that have maintained jobs growth during the downturn – employment levels are now stagnating, falling by 3,000 and increasing by 5,000 respectively.
While private sector employment has now started to increase (12,000 on the quarter), business confidence remains low: vacancies have only shown a small quarterly rise (7,000), redundancies are also going up (6,000 on the quarter) and the ratio of vacancies to jobs remains extremely poor – there are more than five unemployed people for every job, and in parts of the country this ratio is far worse; for example in Hackney there are 24 jobseekers for each post.
For those with jobs, there still isn’t enough work to do: more than half a million temporary workers would now rather be in permemant work – up sharply by 37,000 on the quarter – and 1,081,000 part-time workers would prefer full-time employment, also up, by 45,000.
Long-term unemployment (of more than 12 months) is up 85,000 on the quarter, with 772,000 people now having spent more than a year out of work. With 187,000 people in this group aged 18-24 it is a real concern that the Future Jobs Fund, a programme targeted at preventing long-term youth unemployment, has had 94,000 positions cut from it and that no new strategy for preventing youth worklessness has yet appeared.
Evidence also suggests that more unemployed people are entering economic inactivity – either through ill health or early enforced retirement – but that increasing numbers want a job; 2,324,000 economically inactive people now say that they want to be in employment.
While the rate of job loss has slowed, enough new positions are simply not being created to enable unemployed people to move into work. The Coalition Government has yet to announce any new support for those facing long-term unemployment or for helping unemployed young people into jobs. And while existing labour market programmes are cut back, larger cuts in public expenditure dominate the political agenda – a strategy for promoting economic growth has not yet appeared.
Given the fragility of the labour market recovery, the large numbers of people still out of work and the personal and economic tragedy of long-term unemployment, the risks of making deep cuts in public expenditure now should be clear: reduced growth, lower tax revenues, increased unemployment and poorer public finances in the longer-term. Cutting now will be all pain and no gain – those who lost their jobs during the downturn deserve better.
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