In the last two years, the number in employment in London has gone up by 312,000 – much higher than any other region.
In the last two years, the number in employment in London has gone up by 312,000 – much higher than any other region
The employment recovery is still going strong. Today’s figures show employment up 345,000 and the 72.9 per cent employment rate is the highest since Mar – May 2008, right at the start of the recession.
This really is a high employment rate – it is 0.2 points higher than last month’s figure and if it rises the same amount next month it will equal the 2005 high point of the pre-recession period. Women’s employment rate – 67.9 per cent – is already the highest since the current series began in 1992.
Some other figures are not so brilliant. There are still 791,000 people who have been unemployed for over a year – the typical pre-recession level was about 400,000 less than this. Youth unemployment came down again, but at 853,000 it is also well above pre-recession levels of about 700,000.
However things are moving in the right direction. Take my favourite labour market indicator: the number of unemployed people per job vacancy. At the height of the recession this was about 6 : 1. In the past year it has come down from 4.9 to 3.4.
There’s still a way to go before it reaches the typical pre-recession ratio of about 2.5 : 1, but it isn’t hard to see that being achieved within the next year or so.
So what explains these very good figures?
Although ‘atypical work’ (self-employment and part-time and temporary jobs) still accounts for a disproportionate share of employment growth, this is not the main explanation. Indeed, 441,000 of the 780,000 increase in employment over the past year is in employees working full-time.
But we do seem to be shifting to lower paid jobs: average weekly earnings over the 12 months to April increased by just 0.7 points (total pay). The excited claims of a couple of months ago, that earnings were now catching up with inflation look decidedly premature.
The story is also illustrated by what has been happening in London. London is a good place to start looking at regional changes – it’s the largest in the country and has been something of a success story in recent years.
It’s worth bearing in mind the fact that employment in London is still doing a little worse than in the rest of Britain. London’s employment rate is 72.3 per cent, slightly below the GB average of 73.0 per cent and the unemployment rate is 7.5 per cent, slightly above the 6.6 per cent GB average. But London’s performance used to be substantially worse; these figures represent massive catching up.
Nonetheless, London has benefitted more than most of the rest of the country from the recovery of the past couple of years. According to the latest regional figures, in the last quarter, the number of people over 16 in employment grew by 1.8 per cent in London, above the 1.3 per cent average for England.
Indeed, if you look at the last two years, the number in employment in London has gone up by 312,000 – an increase of 8.3 per cent, much higher than any other region.
It’s a similar story when it comes to the unemployment figures. In the last quarter unemployment in fell by 7.5 per cent, which is the same as the average for England generally. But over the past two years, the number of unemployed adults in London has fallen 17.7 per cent, three and a half points more than the average for England.
Explaining why London has been doing better than some other regions in the past two years is not easy. Later this month the TUC will be publishing research looking at regional variations in employment performance in some detail, but part of the answer may lie in the latest Workforce Jobs figures, also published today.
This gives us an idea of which industries have been growing in the past couple of years: between March 2012 and March 2014 we’ve seen particularly strong employment growth in ‘professional, scientific and technical activities’ (300,000 jobs), ‘administrative and support service activities’ (222,000 jobs) and ‘human health and social work activities’ (166,000 jobs).
These are all industries where we might expect London to have some advantage, but interestingly, finance is not one of the successes – employment in finance is down 19,000 in the past two years (and down 64,000 since the start of the crisis in 2008).
If one story of recent years is the shift in employment to lower earnings, another is the changing industrial composition of the labour market, which may have advantaged the capital.
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