The TUC’s Richard Exell analyses today’s unemployment figures, explaining how they are directly connected to this coalition government’s current economic policy.
It’s hard to be clever about this month’s labour market statistics (pdf) – just listing the items in this avalanche of misery is going to take time.
Let’s start with the headlines:
• In the three months from June to August unemployment reached 2,566,000. This is 114,000 than in the three months from March to May – the biggest increase since the recession;
• The unemployment rate rose 0.4 points to 8.1 per cent, also the biggest increase since the recession;
• The last time the unemployment rate was higher was May-July 1996, the last time the level was higher was Aug-Oct 1994.
Employment fell 178,000 to 29.1 million and the employment rate fell 0.3 points to 70.4 per cent. Women’s unemployment rose to 1.069 million, 7.3 per cent; this is the highest female unemployment rate since Apr-Jun 1994 and the highest level since the current series of records began in 1992.
David Cameron claimed at PM’s Question that there are more women in work than “at the time of the election”. As Nicola Smith has pointed out, this is true, but only because there are nearly 200,000 more adult women in the population – the working age female employment rate has fallen slightly, from 65.5 to 65.4 per cent.
There had been some speculation that youth unemployment might pass the million mark. In the event, this didn’t happen.
Nonetheless, combining the results for those aged 16-17 and 18–24 we see:
• The lowest youth employment level since 1992 (3.67 million);
• The lowest youth employment rate since 1992 (50.2 per cent);
• The highest youth unemployment level since 1992 (991,000);
• The highest youth unemployment rate since 1992 (21.3 per cent).
The male youth unemployment rate (23.6 per cent) is also the highest since 1992. There are now 257,000 young people who have been unemployed for over a year, the highest figure since Dec-Feb 1994. Overall, 867,000 people have been unemployed over a year and 423,000 for more than two years.
As Graph 1 shows, the claimant count measure of unemployment also rose, by seventeen thousand, to 1.597 million in September – this measure has now been rising steadily since the spring:
Graph 1
The number of redundancies is up six thousand to 150,000 and job vacancies are stagnating – a 1,000 rise to 462,000 is neither here nor there and the number of unemployed people per vacancy is unchanged from last month, at 5.6. The blackspots in this month’s figures include Haringey, with 25 unemployed people for each vacancy and Blaenau Gwent and Middlesbrough, both with more than 18 (my colleague Anjum Klair has listed the ten worst around the country.)
As Graph 2 shows, there has been a large reduction in the number of people working in part time and temporary jobs – falls of 173,000 and 79,000 respectively. This reverses a trend that had become well-established since the start of the recession:
Graph 2:
Of course, the usual warnings about over-interpreting one month’s figures must apply here.
If this becomes a trend, it could be worrying – it might be a sign of the end of the ‘labour hoarding’ that characterised the recession. Businesses held on to valued workers because they were concerned that they might be held back by staff shortages in the recovery; if corporate Britain has decided that the recovery has come to an end before it began they may revisit that decision.
One further hint that this could be happening lies in the most recent productivity figures, which up till now have been very depressed: output per hour rose 1.3 per cent in the second quarter of 2011, the biggest rise since before the recession.
That is one of the possible drivers of today’s terrible results. Other views are available; apparently, Chris Grayling thinks it’s all the fault of foreigners:
“It’s no doubt that these figures are a significant step in the wrong direction. I think they are a consequence of what’s happening in the eurozone, we are beginning to see the impact of the financial uncertainty on our labour market.”
This is a strange response. Today’s figures are for the period from June to August and the labour market is famously a “lagging indicator”, so it simply isn’t possible for these results to have been caused by the recent troubles in the eurozone.
The current uncertainty will have an effect on jobs, especially in manufacturing and other exporting industries, but there hasn’t been time yet for it to show up. The simplest – and most likely – explanation for today’s figures is that we are seeing the impact of more than a year of stuttering demand.
See also:
• Devolved nations call on Whitehall to create jobs – Ed Jacobs, October 12th 2011
• Unemployment hits 17-year high – record number of young people out of work – Shamik Das, October 12th 2011
• Reducing job security won’t decrease unemployment – Sara Ibrahim, October 4th 2011
• Gideon’s grotesque attempt to blame workers’ rights for unemployment – Richard Exell, October 3rd 2011
• How likely is 10% unemployment? – Cormac Hollingsworth, August 23rd 2011
26 Responses to “Forget Grayling’s excuses: Record joblessness is solely the fault of this government”
Phil McDuff
Link: Forget Grayling’s excuses: Record joblessness is solely the fault of this government | Left Foot Forward http://t.co/myPaAQQt
Dave Citizen
If they’ve started blaming “foreigners” then it won’t be long before the young people themselves get the blame – “they’re just too lazy and need to get on their bike like I did when I was cleaning chimneys to support myself through Eton and Oxford.”
Dave Citizen
@sweetness – my main worry about all this monetary / fiscal analysis is that it may cause us to miss a bigger point: our prosperity currently rests on flawed foundations.
Having a smart plan to get money flowing better and growth ignited is only meaningful if the foundations of real social prosperity are in place to make use of it. Otherwise, the efforts will be wasted on those who are best placed to feed on such financial initiatives – and there are plenty of them out there.
We need to simultaneously look at the affordability of land and property to labour and business as well as how to increase production of food, skilled labour and the expensive end of manufactured goods. If we don’t do this then we can kiss mass prosperity good-bye and embrace neo-feudalism.
Awake!
@ sweetness
ure basically saying print money and give it to the banks- That’s what u’ve said in long way.
Didn’t follow here;
‘ At the point when the economy has recovered the private banks will be creating enough lending to allow the money supply to widen at its normal rate. Dumping an additional £200-500 billion of liquidity out on the market at this point will cause rampant inflation. Once and if the money supply is widening again naturally, dumping out extra money will cause inflation.’
surely if AFP was seeling out the gilts the reverse would be happening, the goct would be taking liquidity out of the economy, WITHOUT having to raise rates…. I’m not making value judgement, just trying to work thru your logic, certainly more interesting than the rubbish on other sites lol.
There’s a risk of trggering a currency crisis this way agreed- i mean it is simply printing and handing it over to banks- If u followed this thru then everytime the govt neede to borrow it would issue gilts, then sell them TO ITSELF and scrap the lot… how many toimes could we get away with this? Maybe that’s what we’ll have to do anyway….hahahahaah
Awake!
spain 21% unemployment
Spain youth unemployment–48%
unemployment higher accross almost all of europe
Lets keep some perspective before we detonate completely and get italian levels of unemployment