Tagged: ONS

Firms Flouting The Minimum Wage Not Prosecuted In The Past Year

This article  was written by Daniel Boffey, for The Observer on Saturday 22nd November 2014 20.28 UTC

The coalition’s record on low pay has come under attack as new figures revealed that not a single company has been prosecuted in the past year for paying less than the national minimum wage. Despite ministers’ claims that the government is getting tough on under-payers, the last successful criminal prosecution was in February 2013.

That was one of only two prosecutions during the government’s entire term of office to date, according to figures given to parliament. The cases involved the imposition of fines to the value of £3,696 on an opticians in Manchester and £1,000 on a security company in London.

The Annual Survey of Hours and Earnings for the Office for National Statistics recently found that about 287,000 workers were paid at less than the minimum wage in 2012, although the TUC puts the figure closer to 350,000.

Chris Mould, chairman of the Trussell Trust, the charity that runs 400 emergency food banks, said that the increasing numbers of people attending its facilities was clear evidence that ministers needed to do more to protect people who were living “on the edge”.

The number of people helped by Trussell Trust food banks in the first half of the 2014-15 financial year is 38% higher than in the same period last year. The trust reported this weekend that 492,641 people were given three days’ food and support, including 176,565 children, between April and September. That compared with 355,982 during the same period in the previous year.

Problems with the social security system continued to be the biggest overall trigger for food bank use (45%), of which “benefit delays” accounted for 30% of referrals, and “benefit changes” 15%, according to the charity.

However, an emerging trend, according to the charity, is that 22% of those helped were referred because of “low income” compared with 16% of referrals in the same period last year – meaning 51,000 more people were referred to a food bank due to low income.

Mould said:

“It is up to the democratically elected parliament to make some decisions and one route is to make it less easy for people to be exploited at the bottom of the labour market. We see people forced to cycle in and out of poverty and they are so close to the edge that it is easy for them to slip under.”

HM Revenue and Customs (HMRC) said that it prosecutes the most serious breaches of the national minimum wage “and where there is clear evidence to do so”. A spokesman said the average cost of a successful prosecution was around £50,000 and that HMRC believed it was preferable to recoup wages for workers through civil penalty powers. In 2013-14, HMRC conducted 1,455 investigations and issued 652 financial penalties.

But the shadow business secretary, Chuka Umunna MP, said that the coalition was not taking the action needed to enforce the minimum wage. Failing to pay the minimum wage was made a criminal offence in 2007. Under Labour, seven organisations were prosecuted, including Torbay council.

Ummuna said:

“The national minimum wage is one of Labour’s proudest achievements in government and it has made a huge contribution to making work pay, boosting living standards and tackling in-work poverty.

“It is clear that the Tory-led government is not going to take the action needed to properly enforce the minimum wage – so that is why Labour is clear that we need to see higher penalties for rogue companies who don’t pay employees the minimum wage and far more effective enforcement, including by giving local authorities new powers.“

An HMRC spokesman said that the number of staff enforcing the minimum wage now stood at 194 – 40 more than in 2009-10. He said:

“Paying less than the minimum wage is illegal and, as HMRC’s record shows, if employers break the law they will face tough consequences. We conducted 1,455 investigations in 2013-14, securing over £4.6m in wage arrears for over 22,000 workers.

“The vast majority of national minimum wage cases are dealt with using civil penalty powers, as this route is usually the most appropriate, ensures workers receive the wages they’re due, and provides the most cost-effective resolution for taxpayers. However, in more severe cases, HMRC will take criminal action and seek a prosecution.”

Source –  Welfare Weekly,  22 Nov 2014

http://www.welfareweekly.com/firms-flouting-minimum-wage-not-prosecuted-past-year/

Council slammed for ‘importing’ 22,000 people, while 22,000 remain jobless

A council has been criticised for planning to “import” 22,000 extra people by 2030 – the same number of people currently out of work in its area.

Durham County Council hopes to attract 57,000 more residents by 2030 – well above the 35,000 growth predicted by the Office for National Statistics (ONS).

At a public inquiry into its 15-year masterplan the County Durham Plan (CDP), John Blundell, from the Campaign to Protect Rural England (CPRE),  said there was “no need to import” these extra people, when there are 22,000 people unemployed in the county already.

Mr Blundell’s colleague, John Urquhart, piled on the pressure by saying the county’s indigenous population had suffered “for a generation” from job losses.

However, the council also faced criticism from the other direction, with developers saying its plans for 31,400 new homes were too conservative.

Simon Macklin, for the Church Commissioners, said the figure should be higher to achieve the “necessary supply of labour”, while Matthew Good, from the Home Builders Federation, said the number was “perhaps too low”.

Planning inspector Harold Stephens is leading a six-week examination in public of the CDP, which aims to create 30,000 new jobs by 2030 and increase the county’s employment rate from 66 to 73 per cent.

David Usher, for the council, said the CDP was realistic but aspirational, planning not for decline but a positive future for County Durham.

John Ashby, from the Friends of Durham Green Belt – which has drawn up an alternative vision for “moderate growth”, said the CDP was based “not on how many jobs there might be (by 2030) but how many jobs you (the council) wish there might be”.

Mr Usher said the so-called moderate growth strategy would in fact be “taking forward stagnation in the economy”.

The council’s use of statistics was repeatedly challenged, but officers insisted their figures were robust.

The CPRE, which led the criticism, called for the inquiry to be adjourned for the council to do further work, but this call was rejected by Ian Ponter, the authority’s barrister.

Source –  Northern Echo,  03 Oct 2014

Unemployment Figures Include Sanctioned Jobseekers, Say ONS – But Not Universal Credit Claimants

Welfare News Service asked the Office for National Statistics (ONS):

Could you please verify as to whether ‘sanctioned’ Jobseekers in receipt of Jobseeker’s Allowance (both income and contributory based) are included in official government statistics/datasets submitted to the Office for National Statistics (ONS) in relation to UK unemployment. Could you also further clarify as to whether this remains the case in relation to Universal Credit?

 Furthermore, could you also inform me as to whether sick and disabled UK residents in the Work Related Activity Group (WRAG) of Employment and Support Allowance (ESA) are included in official government unemployment data/statistics submitted to the ONS, and whether this data is included in published ONS figures.

Does this extend to ‘sanctioned’ ESA WRAG recipients?

 

ONS response:

Thank you for your recent request under the Freedom of Information Act regarding the effect of sanctions on UK unemployment statistics.

Unemployment in the UK is measured using the Labour Force Survey (LFS), consistent with the International Labour Organisation (ILO) definition. The LFS is a sample survey of people living in private households. The survey asks a series of questions about respondents’ personal circumstances and their activity in the labour market.

Through these questions every respondent is classified as in employment, unemployed or economically inactive, consistent with ILO definitions. The LFS and ILO defines an individual as unemployed if they are without work, available for work and seeking work. The UK applies this as ‘anybody who is not in employment and has actively sought work in the last 4 weeks and is available to start work in the next 2 weeks, or has found a job and is waiting to start in the next 2 weeks’, is considered to be unemployed.

As this data is gathered from a survey, the LFS, it is independent of whether or not the individual is claiming benefits, and therefore is not affected by sanctions.

If an individual who is in the Work Related Activity Group of Employment and Support Allowance is meeting the above criteria they would also be counted as unemployed irrespective of whether they are being sanctioned or not. The same would also be true of any claimants of Universal Credit who meet this criteria.

ONS also publishes the Claimant Count, which is the number of people claiming Jobseeker’s Allowance (JSA). People who are sanctioned are those who have an underlying entitlement to JSA, but have not followed the rules of the benefit scheme. People who are sanctioned do not automatically have their claim closed by DWP, but will not receive payment of JSA during the period of the sanction. Any live sanctioned claim, where the individual continues to sign on, would continue to be included within the Claimant Count. However, if they choose not to sign-on during their sanction period, their claim will be closed, as would be the case generally if a claimant fails to sign on – and as such would not be included in the Claimant Count.

Currently the Claimant Count estimates do not include any claimants of Universal Credit. ONS will include jobseeker Universal Credit claims in the Claimant Count statistics as soon as possible. The absence of Universal Credit claimants currently has a small effect on the Claimant Count for the UK.

 

You can find our FOI request and the ONS response here

We’re still waiting for the DWP to respond to our FOI.

Source – Welfare News Service, 09 Sept 2014

http://welfarenewsservice.com/unemployment-figures-include-sanctioned-jobseekers-say-ons-universal-credit-claimants/

Concerns Grow Over Poor Wage Growth As Self Employment Soars

A rise in employment and sharp drop in the number of people out of work has had little effect on the scandal of low wages, the latest figures show.

Figures released by the Office for National Statistics (ONS) on Wednesday show that the UK unemployment rate has fallen sharply by 132,000 between April and June to 6.4%, the lowest since 2008, with a total of 2.08 million unemployed people in the UK. The figure does not include the 8.68 million people who are regarded as being ‘economically inactive’, or unavailable/unable to work. The economic inactivity rate now stands at 21.9% and is unchanged compared with January to March 2014.

ONS figures also show that there were 30.6 million people in work between April and June 2014, 167,000 more than January to March 2014 and 820,000 more than a year ago.
However, the welcome rise in employment has been overshadowed by the lowest wage growth in thirteen years. Wages have risen by a meagre 0.6% over the last year – a real-terms fall when inflation and living costs are taken into account.

The lower than expected wage growth figures come at the same time as other figures show that the UK is now the self employment capital of western Europe. Figures from the think tank IPPR show that the number of self-employed people in the UK has grown by more than 1.5 million over the last thirteen years, growing at its fastest rate during the first quarters of 2013 and 2014. Self employed people now represent more than 15% of the workforce. Around two-fifths of all jobs created since 2010 have been in self-employment.

Unions have expressed concerns that self-employment can often be insecure and low-paid, and may not always include the employment rights other workers are accustomed to.

Unite general secretary Len McCluskey said: “The British economy is in a Jekyll and Hyde situation.

“While the fall in the jobless total of 132,000 is welcome, we have to ask what sort of jobs have those people entered? The situation is compounded by the fact that more and more people are being driven into so-called self-employment in a desperate bid to get off benefits and find work.

“Self-employment is not the economic panacea that ministers crow about; it forces workers into a state without rights and with wage insecurity, and we are increasingly encountering people forced into `self-employment’ by employers who want to swerve their responsibilities.

“At the same time, the wage siege continues. If you strip out bonuses, wage rises are struggling along the bottom at a record low of 0.6 per cent which is hobbling the recovery in the UK economy. If self-employment earnings figures were included it would look even worse as the Resolution Foundation has shown.

“With George Osborne borrowing way beyond what he promised the nation, his mindless austerity policies are costing this nation and its people dear. This is no longer about reducing the deficit; it is about the systematic lowering of the living standards of ordinary people.

“Millions of people feel insecure in their jobs. Hundreds of thousands of our young people are languishing on the dole or press-ganged into workfare.

“Inflation is still running at 1.9 per cent – more than three times the rate of earnings. The case is clear that Britain’s workers need a pay rise – and this can be well-afforded by the companies which are sitting on a cash mountain of reserves.

“This government’s claims of economic competency are laughable. A government serious about job creation would not be borrowing to keep people in benefits, but would be investing to create work and skilled, decent jobs, through a mass house-building programme, rebalancing the economy away from its increasing dependency on the low-wages service sector, and tackling the chronic housing need in this country.”

TUC General Secretary Frances O’Grady said:

“The combination of rising employment and falling pay growth suggests the economy is very good at creating low-paid jobs, but struggling to create the better-paid work we need for a fair and sustainable recovery.

“Self-employment has been responsible for almost half of the rise in employment over the last year. The fact that self-employed workers generally earn less than employees means our pay crisis is even deeper than previously thought, as their pay is not recorded in official figures.

“Falling unemployment is always welcome – particularly for young people who are finally starting to find work – but unless the quality of job creation increases Britain’s living standards crisis will continue and people will be locked out of the benefits of recovery.”

Unison general secretary Dave Prentis said: “Any fall in unemployment is welcome but the rise of the number self-employed is a worrying trend. They are likely to earn less than those in full time jobs as well as being less secure.

“Underemployment is now a bitter reality for millions of struggling families across the UK. And many have no option but to work part-time because they cannot find a full-time job.

“Too many people are stuck in minimum wage jobs, on zero hours contracts and part time work when they are desperate to go full time. Desperate because they need regular, secure employment to feed their families without having to resort to foodbanks, pay their bills without falling into the grip of pay day lenders and decent pay to rebuild consumer confidence and grow the economy.”

The Citizens Advice Bureau (CAB) has described today’s unemployment figures as a “double-edged sword”. The charity says that falling unemployment coupled with low wages and an increase in self employment ‘will lead to instability for working households’.

Citizens Advice Chief Executive, Gillian Guy, said:

With employment up but wages down, today’s economic figures are a mixed blessing for working families. The rising number of people in work is extremely welcome, but emerging trends in the economy bring a double-edged sword of more jobs but more instability and lower wages.

“The Government has undoubtedly made good progress on jobs and growth but increased self-employment, flexible-hour jobs and Zero Hour Contracts mean insecurity for many working people. Those people who work for themselves are just as likely to seek debt advice as any other working group. Self-employed people in debt helped by Citizens Advice are more likely to face bankruptcy than people in debt who are employed or out of work.

“On Zero Hour Contracts, we’ve had welcome announcements from the Coalition about banning exclusivity clauses but with this type of job a growing part of our economy, people with such a contract should also be guaranteed basic rights like maternity pay and annual leave.”

The Bank of England has responded to today’s news about poor wage growth by cutting its forecast in half. Bank of England governor Mark Carney said that he now expects salaries to rise by 1.25% this year. The figure represents the slowest pace in wage growth since 2001.

Responding to the announcement from the Bank of England, TUC General Secretary Frances O’Grady said:

It is hugely concerning to hear that the Bank has cut its forecast for wage growth in half. The economy’s getting bigger but not better with Britain’s pay squeeze now set to continue even longer.

“It’s not just wage stagnation that’s pushing down incomes, living standards are falling because so many of the new jobs being created are low-skilled, don’t have enough hours, or are in low paid self-employment.

“It deeply worrying that the Bank says ‘average household real incomes have yet to stage a meaningful recovery’. If people don’t have money in their pay packets to spend on goods and services it’s hard to see how we can return to sustainable growth. Consumer spending is holding up for now despite people’s real pay falling, but the danger here is people running down savings or increasing their debts.

“That’s why Britain needs a pay rise, because a recovery built on stronger household incomes will be a recovery built to last.”

Citizens Advice Chief Executive, Gillian Guy, said: “As the economy continues to grow, ministers must not lose sight of the more than two million people stuck in the shadow of growth, and out of work. The legacy of recession is wages which remain far lower than prices, and with the Bank of England halving its wage growth forecast, many families will find that meeting household bills is even harder.

“Ministers need to make sure good policies, like financial support for childcare, reflect the new realities in the labour market. People taking up the growing number of flexible-hour and low income jobs are likely to struggle to get decent childcare, whilst 41 per cent of Citizens Advice clients say that finding a childminder or babysitter is a barrier to them taking on work.”

Source – Welfare News Service,  13 Aug 2014

http://welfarenewsservice.com/concerns-grow-poor-wage-growth-self-employment-soars/

North East has lowest healthy life expectancy in country

Men and women in the North-East have the lowest healthy life expectancy in the country, according to official new figures.

A statistical bulletin produced by the Office for National Statistics highlights the continuing North-South divide in health life expectancy.

Men born in the North-East had a life expectancy of 77.8 years, slightly higher than the North-West, but the lowest healthy life expectancy of 59.5 years.

Women from the North-East also finished at the bottom of the pile for life expectancy – 81.6 years – and last among the English regions for healthy life expectancy – 60.1 years.

The two areas where men and women could expect to have the longest expectancy of healthy living were in Richmond upon Thames and Wokingham in the affluent South-East of England.

Men born in Richmond upon Thames could expect to enjoy a healthy living expectancy of 70 years while women born in Wokingham could expect to live healthily for 71 years.

Within the North-East Darlington men had the longest healthy life expectancy of 64 years with Northumberland just behind with 62.7.

The shortest healthy life expectancy within the region for men was in Sunderland where average healthy life expectancy is 55 years.

 Women born in Darlington also had the longest healthy life expectancy in the region – 63 years – while women from Sunderland had the shortest healthy life expectancy in the region – 58.4 years.
Source –  Northern Echo, 20 July 2014

Cut Child Benefit For Larger Families, Says Think Tank

Child Benefit should be limited to no more than four children per family to help cut welfare spending, say Policy Exchange.

A report by the centre-right think tank  has recommended limiting child benefit for larger families. The move could save around £1 billion over the course of a parliament, say Policy Exchange.

Policy Exchange is said to have close ties with the Conservative Party and was founded by a group that included Michael Gove, Francis Maude and Nick Boles. Many of the past recommendations made by the think tank have been adopted into tory manifestos.

If this new policy is adopted, it would see child benefit progressively cut for each child born into a family, and rise by no more than 1% each year over the five-year course of a parliament.

Parents would initially receive £21.50 a week for their first child, £14.85 for the second child, £14.30 for the third and £13.70 for the fourth. Payments would be limited to no more than four children per family. Supporters of the policy claim it would help deter immigrant from coming to the UK to claim benefits for their children.

Policy Exchange said that a YouGov poll, commissioned by the think tank, found that 67% of voters would support cutting child benefit for larger families. 20% were opposed to the move.

According to the results of the poll, the proposal is supported by 83% of Conservative voters, 63% of Liberal Democrat voters and 55% of Labour voters.

The Conservatives have previously considered a similar proposal put forward by Nadim Zahawi to limit child benefit to just two children, but decided against the policy out of fear it would cost the party votes.

The author of the report, Steve Hughes, said:

The chancellor has suggested that annual welfare savings of £12bn will have to be found to avoid further and faster cuts to departmental budgets.

“Choosing where this money comes from is not easy, but with such high levels of public support, capping child benefit at four children and redesigning payment levels offers a very real opportunity to generate some much needed savings in the fairest way possible.”

A spokesperson for the right-wing pressure group, Taxpayers Alliance, told the Daily Express:

No one should be immune from having to make the sometimes hard choices associated with having a family and people have to realise that there is not a bottomless pit of money.”

Opponents argue that the tory-led coalition government has consistently targeted Britain’s poorest households with draconian welfare cuts, while continuing to allow multinational companies to escape paying their ‘fair share’ in tax and handing tax cuts to the highest earners, who could afford to pay more.

They also say that there has been far too much focus on cutting state benefits, rather than introducing a living wage to help parents cover the cost of living and raise their own children, instead of having to rely on benefits to top-up stagnating wages.

Figures released by the Office for National Statistics (ONS) yesterday (17 June) appear to support such an argument. ONS figures show that average pay has increased by only 0.7% on this time last year, or just 0.3% excluding bonuses – well below inflation which currently stands at 1.9%.

A Survation poll for the union Unite, found that over a third (34%) of low wage earners cannot afford to shop where they work and nearly sixty percent of workers earning £6.50 or below (58%) feel trapped in low waged work. 79% of respondents said that they want work to pay and want to earn a living wage instead of depending on benefit top ups.

Welfare News Service requested a comment from the Child Poverty Action Group (CPAG) on how limiting child benefit would impact upon child poverty figures. Unfortunately they did not respond in time for publication.

Source –  Welfare News Service,  17 July 2014

http://welfarenewsservice.com/cut-child-benefit-larger-families-says-think-tank/

North East Unemployment figure rises by 5,000

Unemployment in the North East has increased by 5,000 in the quarter to May, official figures have revealed.

 According to the Office for National Statistics (ONS), a total of 129,000 people were unemployed in the region between March and May.

The region’s unemployment rate was 9.6% and saw a rise of 4.0% during the period.

Nationwide, the new Cabinet was given good news with the latest figures showing record employment and another huge fall in the numbers out of work.

> Except in the North East…

More than 30 million people are in work, an increase of almost one million over the past year, the best figures since records began in 1971. Unemployment fell by 121,000 in the quarter to May, to 2.12 million, the lowest since the end of 2009.

> Except in the North East…

The number of people claiming jobseeker’s allowance fell by 36,300 in June to 1.04 million, the 20th consecutive monthly fall and the lowest total since 2008.

Economic inactivity, covering those looking after a relative, on long-term sick leave, or no longer looking for work, was 67,000 lower at just under 8.8 million, the lowest figure for more than a decade.

Just over 78% of men and 68% of women are in work, giving an employment rate of 73.1%.

Other figures from the ONS showed that more than 4.5 million people were self-employed, the highest since records began in 1992, after an increase of 404,000 over the past year.

Average earnings increased by 0.3% in the year to May, 0.5% down on the previous month, giving average weekly pay of £478. The 0.3% rise was the lowest since 2009, while excluding bonuses, the figure was 0.7%, the lowest since records began in 2001.

Long-term and youth unemployment have both continued to fall. The number of jobless 16-to-24-year-olds fell by 64,000 over the latest quarter to 817,000, including 283,000 full-time students looking for part-time work.

There was also a drop in the number of people in a part-time job wanting full-time work – down by 61,000 to 1.3 million.

Job vacancies were up by 30,000 to 648,000, an increase of more than 100,000 on a year ago, but 48,000 fewer than the pre-recession peak at the start of 2008.

Employment Minister Esther McVey said: “An important milestone has been reached in our country’s recovery. With one of the highest employment rates ever, it’s clear that the Government’s long-term economic plan to help businesses create jobs and get people working again is the right one.

> Except in the North East…

“With an employment rate which has never been higher, record women in work and more young people in jobs, the resilience of the country during the downturn is being rewarded. We know there is more to do, and the best way to do so is to go on delivering a plan that’s creating growth and jobs.”

> Except in the North East…

Prime Minister David Cameron said: “Today’s figures show more people have the security of a job than ever before. Full employment is a key aim of our long-term economic plan.”

> Except in the North East…

Deputy Prime Minister Nick Clegg said: “More people up and down the country are finding jobs as we build a stronger, more balanced economy. And today we have the highest employment rate on record, which shows that this Government has created the right conditions for growth.

> Except in the North East…

We have made the tough decisions to reduce our deficit – lifting around three million people out of tax so they keep more of what they earn, healing the scar of the north-south divide through the Regional Growth Fund, and giving young people a helping hand by boosting apprenticeships.”

> Except in the North East…

Paul Kenny, general secretary of the GMB union, said: “The fall in unemployment is welcome. However, it is time to drill down into the details of what types of jobs are being created and where.

“This is because large swathes of the country and a great number of workers have seen little or no benefit from this recovery.

“Much of the growth is due to demographic factors, and the increase in population means GDP per head is still well below 2007 levels. This is the root cause of average earnings being down 13.8% in real terms since then.”

Source –  Hartlepool Mail, 16 July 2014

UK jobs figures and why they’re useless…

It is very hard to work out what is going on in the UK labour market because the quality of the statistics is basically junk – garbage in, garbage out describes the lack of quality of the data well. I really am not exaggerating.

Bad Labour Market Data Part 1 is that every other major country, including the euro area as a whole, is able to produce timely estimates, but not the UK.

Currently unemployment rates for February 2014 are available for Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, the Czech Republic, Denmark, Finland, France, Germany, Hungary, Iceland, Ireland, Israel, Italy, Japan, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United States. Data for April 2014 were released by the United States on Friday.

The UK stands out as the only country out of 31 that has no data available for February, March or April 2014.

Pathetic. The national statistic that pretends to be for January is actually an average of December of 2013 and January and February of 2014. The reason for this is simply because the sample sizes are too small to generate accurate monthly estimates.

The Office for National Statistics does in fact publish a single-month estimate of the unemployment rate but that jumps around all over the place.

Let me illustrate the problem. The ONS makes the supporting micro data on individuals available for researchers like me to examine. They take out identifiers so we can’t work out who anyone is. The latest micro data we have is for the three-month period October to December 2013.

In total over these three months 77,657 people between ages 16-98 were interviewed. Of these, 39,761 were employed 6,995 were self-employed and 3,347 were unemployed. The overall unemployment rate, once the data have been weighted and seasonally adjusted is 7.2 per cent, but the relatively small sample size means this estimate is measured with lots of error.

For the technically minded, the 95 per cent confidence interval for the monthly national change is ± 0.3 per cent, which means that any monthly difference smaller than that is not statistically significantly different from zero.

The unemployment rates that were calculated, for example, for East Anglia (5.7 per cent), East Midlands (6.4 per cent), Scotland (7.1 per cent), Wales (7.1 per cent), Northern Ireland (7.4 per cent) as reported by the ONS for October-December were based on ridiculously small samples of 114, 246, 281, 153 and 142 unemployed people respectively. Given the very small sizes the result is that the regional unemployment rates are measured with even more error than the national rate and bounce around like a rubber ball from month to month.

The reason why the ONS struggles to report unemployment rates by month becomes obvious rather quickly.

So the single-month estimate for December of 7.2 per cent that it reports is only based on a sample of 1,198 unemployed people, of whom 632 were male and 452 were under the age of 25.

The number of unemployed people in each of the five regions identified above in December is East Anglia (34), East Midlands (91), Scotland (105), Wales (51), Northern Ireland (55), hence why no single-month disaggregated estimates can be produced.

Bad Labour Market Data Part 2. The government has claimed recently that based on earnings growth of the national statistic called Average Weekly Earnings (AWE) for the whole economy of 1.9 per cent in February 2014 and the fact that the Consumer Price Index has been steadily falling, this means that real wages are set to rise.

If only that was true. But sadly it seems most unlikely given the fact that the Monthly Wages and Salaries Survey (MWSS) on which the estimate is derived has two major sample exclusions whose wages are likely to be growing much more slowly than that, if at all.

First, the ONS has no earnings data, as in none, on the 4.5 million self-employed workers, including large numbers who have set up in business recently. The only earnings data we have available from HMRC are over two years old.

What we do know is that the typical self-employed person earns less than the typical employee and some have zero earnings or even losses; there is every prospect earnings growth of the self-employed will be low.

Second, it also turns out that the MWSS doesn’t sample workers employed in firms with fewer than 20 employees that are the least likely to have strong earnings growth given the difficulty small firms have had in raising capital. The ONS simply makes an adjustment based on the Annual Survey of Hours and Earnings (ASHE), which was last available in April 2013 and which itself excludes the lowest earners below the National Insurance threshold.

The ONS computes an average over the previous three years that it imposes on the AWE monthly data. So the ONS just guesses that what happened in the past applies now. But maybe it doesn’t.

The ONS admitted to me that “ideally, we would sample businesses with fewer than 20 employees in the MWSS. However, we do have to pay close attention to minimising the burden on respondents, and we believe that using the adjustment factor from the ASHE strikes an appropriate balance between this and accuracy of the estimates.”

Really? So making it up as you go along is OK? It turns out that this amounts to approximately 20 per cent of all employees, or another 5.2 million workers whose wages we know zippo about.

So the national wage measure excludes 10 million out of the UK’s 30 million workers and my working assumption, for the sake of argument, is that their average pay rise over the past year is zero (it’s a maybe not-so-wild guess that the ONS can’t disprove)!

There is supporting contradictory evidence of strong earnings growth from the latest UK Job Market Report from Adzuna.co.uk, showing that average advertised salaries have slipped £1,800 in the past year down to £31,818 in March 2014, 0.6 per cent lower than in February, and 5.3 per cent lower than in March 2013.

A survey carried out by the Federation of Small Businesses at the end of 2013 reported that “after several years of wage restraint, it is encouraging that the vast majority of small firms are beginning to raise wages again”. They found that 29 per cent of firm owners said that over the next year they would raise wages for all staff, 35 per cent for some staff, 8 per cent for those on the minimum wage. 22 per cent said they would freeze wages, 2 per cent said they would lower them and the rest didn’t answer.

So the AWE is an upward-biased estimate of wage growth. Garbage in, garbage out. The UK’s labour market data are not fit for purpose.

Source – Independent,  08 May 2014

North East average pay drops behind Wales

Alarm bells should sound for the region’s economy as the North East drops behind Wales for average pay.

For the first time in years people in Tyneside, Northumberland and County Durham are taking home a lower average salary than those in Wales.

The drop in pay is proof that the region needs a dedicated economic steering group, argues policy experts from the Trade Union Congress.

“The figures are significant because Wales is better equipped as a region economically. I do worry about the North East with what’s going on in Scotland in that we will be left with no real tools to make the level of difference that we need and that people in this region deserve,” said Neil Foster, policy and campaigns officer for the TUC Northern Region.

Figures from the Office of National Statistics (ONS) show that the North East was the worst paid region in the UK in 2013 with an average salary of £24,084. In London pay is £35,238 a year, and the UK average is £27,017.

Average pay in Wales is just £100 more a year on average at £24,182, however the country has regularly been used as an economic indicator to judge the North East’s progress.

Mr Foster said: “There’s lots of similarities between the North East and Wales so the fact that we have gone behind them should ring alarm bells.

“The fact that we have slipped behind Wales is significant because they have got an assembly with the economic powers to stimulate the economy and provide good quality jobs in the most productive sectors.

“The fact that we don’t have a Regional Development Agency means we should be saying to Whitehall that they must devolve economic powers to our regions. If you are given the tools you can create economic prosperity.”

The TUC said the latest pay figures show a rise on paper, however inflation meant a real terms cut.

The statistics show that in the North East the average wage was £17,430 in the year 2000, rising to £24,084 last year. This 38.1% increase in wages was the slowest percentage increase anywhere in the UK.

In 2000 a North East resident earned £1,418 less than the national average, but by 2013 this had grown to £2,933, demonstrating a cut people’s spending power.

Pay in London has continued to rise faster than almost anywhere in England, however Scotland has risen the fastest with their average annual wage up 46.8% from £18,029 in 2000 to £26, 472 in 2013.

Reintroducing a regional economic governance body is the only way to put the North East back on track, Mr Foster argues.

“I don’t think it’s inevitable the North East has to be the lowest paid region but unless there is change, it will be very difficult to predict with any confidence that things will be getting better soon,” he said.

Earlier this week TUC Northern Secretary Beth Farhat said ONS figures also revealed a worrying trend for women in the North East as there has been a 20% rise in female unemployment in the last 12 months – from 49,000 up to 59,000.

Source – Newcastle Journal,  28 Feb 2014

Cameron’s ‘mission’ is morally bankrupt

Mike Sivier's blog

140117democracy

When David Cameron stands up in all his hypocrisy and tells you that tearing apart the basic safety net that guaranteed people would not be left in hunger or destitution is part of his “moral mission”, even die-hard Tories should agree that the country has taken a turn for the worse.

When he defends an administration that has become so punitive that applicants who don’t get it right have to wait without food for months at a time, by claiming he is doing “what is right”, even die-hard Tories should agree that the man who claims he is Prime Minister has diverged from reality.

That is precisely what he has done, and you can bet that the Tory diehards will quietly go along with it because they think it is far better for other people to lose their lives than it is for their government to lose face.

Cameron has…

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