Labour market: Young people are the furthest from benefiting from this recovery

And getting back to pre-recession wages is going to take an awfully long time

 

Today’s employment figures show that the overall picture hasn’t changed a great deal:

  • Employment is still rising, with another record employment level. The employment rate of 73.2 per cent was briefly equalled in 2005, but has not been surpassed since these records began in 1971.
  • Unemployment fell again, with the rate and level falling to their lowest since 2008.
  • There are a record number of vacancies, and the number of unemployed people per vacancy – 2.6 – is now roughly where it was before the recession.

Until 2013, the highest women’s employment rate was 67.1 per cent, which had been achieved a few times. Women’s employment rate has been over that for a year and currently stands at 68.5 per cent. Men’s unemployment rate has fallen 1.6 percentage points in the past year; if it falls 1.1 it will reach its lowest ever.

Once again, young people are the furthest from benefiting from this recovery. There were 740,000 unemployed 16 – 24 year olds in October – December, up slightly from 737,000 in July – September. Long-term youth unemployment has fallen significantly in the last year, but we have a way to go before we get back to pre-recession levels and the picture is somewhat worse the longer the period of unemployment we consider:

Long-term 16 – 24 unemployment (000s), Oct – Dec quarters

  6 months plus 12 months plus 24 months plus
2008 253 118 37
2013 428 260 115
2014 313 201 85

 

Although earnings are finally rising in real terms, there is a huge gap to make up. December was the first month since 2009 in which average weekly earnings (including bonuses) rose at a faster annual rate than the Retail Price Index, which is the measure of inflation usually used for pay negotiations. This means that, in our real pay chart, real pay increases – the green columns – are finally positive:

Average weekly earnings, RPI inflation and real pay increases

Real pay

So pay didn’t go down in real terms (hurrah!) but the increase was only about 0.5 per cent. Just getting back to the real wages we had before the recession will take an awfully long time at this rate – at the TUC we’ve projected forwards real earnings at the current monthly rate of growth (using the CPI measure of inflation, which is less favourable to our case) and we calculate that it will still take until the end of the next Parliament to achieve this.

And returning to the pre-recession real value of wages would not be a mark of success. Before the recession, real wages grew at an annual rate of 1 to 1.5 per cent, depending on where you start and finish your measurements. If we had maintained that rate of growth, average weekly earnings would be £80 to £100 higher than the current figure of £489.

Richard Exell is senior policy officer at the TUC. Follow him on Twitter

As you’re here, we have something to ask you. What we do here to deliver real news is more important than ever. But there’s a problem: we need readers like you to chip in to help us survive. We deliver progressive, independent media, that challenges the right’s hateful rhetoric. Together we can find the stories that get lost.

We’re not bankrolled by billionaire donors, but rely on readers chipping in whatever they can afford to protect our independence. What we do isn’t free, and we run on a shoestring. Can you help by chipping in as little as £1 a week to help us survive? Whatever you can donate, we’re so grateful - and we will ensure your money goes as far as possible to deliver hard-hitting news.

8 Responses to “Labour market: Young people are the furthest from benefiting from this recovery”

  1. steroflex

    Employment figures do not actually mean much. Who is paying the wages means more. If this is an appeal for us taxpayers to fund employment with non jobs and pseudo education, then please count me out. I am sure that I speak for a lot of people who have excellent accountants too and for those who can afford to “outsource”.
    Real employment, not government funded is what we ought to be looking at. And, of course, a big reform of our comprehensive system and examination system and our independent schools as well.

  2. Leon Wolfeson

    And of course people’s earnings in their early to mid 20’s strongly affect lifetime income.
    So you’re probably being optimistic.

    Moreover, we’re in a city-driven bubble which is wobbling.

  3. Guest

    Facts don’t mean much. As you demand less education and fewer jobs, as you talk about how you hate the concept of society and tax.

    You keep talking about how you do your best to hurt Britain, as you “outsource” your “work” to others, lazing on their backs and consuming your corporate welfare.

    “Real” jobs – so workfare and terrible conditions for the peopns, of course, as you talk about denying most people education entirely and excluding them from exams…as your rich get public funds for their schools.

    You always were outside the bounds of normal morality.

  4. steroflex

    Leon allow me to tell you a little about myself. Surprisingly I am not at all rich. I am an OAP on a tiny pension, but with a small legacy from my father in law and my own father both of whom were professional people. I live in a new estate (1976) in a minor town in north Cambridgeshire.
    Secondly I take an interest in local education. I was a governor at the comprehensive until it went into special measures. I teach immigrants English for free and do a bit of coaching.
    My concern is actually for the country in which I was brought up. I remember it when it was rich, powerful and successful and when people believed in it and produced children in families. I am very sad to see it in debt, with all those excellent workmen and women on the rock’n’roll, on drugs, living lonely unfulfilled lives, controlled by people who speak the language but who really prefer their own careers.
    I have seen the damage that false education brings, I have supervised people in work which they have no intention of doing properly, I have stood by and watched as money is poured into the wrong channels while we are left high and dry.

  5. John

    There is a difference between being ‘unemployed’ and ’employed’. Being ‘unemployed’ is ‘claiming JSA’ essentially. ‘Employed’ is more flexible; it can include or exclude self-employed, retired people working, volunteers and zero-hour workers.

    So yes, Employment figures are open to debate. But ALL government statistics should be treated with a measure of caution. However, if you look at the types of jobs which have fuelled this drop, it’s self-employment & low-income jobs. Not the sort to grow our GDP in a way that benefits the average Joe.

Comments are closed.