The number of jobseekers per advertised job vacancy has reached a record post-recession low of 0.89, researchers claim.
According to the latest UK Job Market report from Adzuna – a search engine for job advertisements – the number of advertised job vacancies reached 949,778 in November 2014, the largest number of jobs since the recession and up 23.6% on November 2013.
Adzuna say there has been ten consecutive months in which competition for jobs has fallen and there are now more advertised vacancies than jobseekers.
Andrew Hunter, co-founder of Adzuna, said:
“The job market has seen significant revival over the past year. The most recent figures provide a solid base for optimism as we head into 2015.”
However, Mr Hunter urged caution, saying temporary jobs for the Christmas period may be partly responsible for a 1.4% increase in advertised vacancies between October to November 2014:
“This peak in advertised vacancies at the close of the year may owe as much to seasonal work as it does to the resurgent core of the jobs market”, he said.
He added: “Some uptick in advertised vacancies during the lead-up to the festive period was expected.”
Mr Hunter said the “cost of living crisis” was starting to ease, “leaving more people with more money in the New Year – injecting a feel-good factor into a traditionally glum time of year.”
This claim will be impossible to accept for the several thousands of jobseekers still struggling to find work and who may have been made redundant during the biggest recession in decades.
And the supposed economic recovery is yet to be felt by families struggling to pay bills, or forced to turn to food banks to feed themselves and their children.
There are also wide variations in the number of available jobs in different towns and cities across the UK. For example, there were 23.54 jobseeker’s for every job vacancy in Salford and 18.54 in the Wirral. This compares to just 0.17 in Cambridge and 0.20 in Guildford.
Research published by the TUC earlier this month (December) reveals that just one in every forty new jobs added to the economy between 2008 and 2014 has been a full-time employee job.
TUC General Secretary Frances O’Grady said:
“While more people are in work there are still far too few full-time employee jobs for everyone who wants one.
“It means many working families are on substantially lower incomes as they can only find reduced hours jobs or low-paid self-employment.”
“The Chancellor has said he wants full employment, but that should mean full-time jobs for everyone who wants them. At the moment the economy is still not creating enough full-time employee jobs to meet demand.”
Analysis also shows a significant rise in the number of people trapped on controversial low-paid and insecure Zero Hours contracts. TUC says most workers on zero-hours contracts earn less than the living wage.
According to Adzuna, average advertised salaries grew to £34,549 in November 2014 – a 5.8% increase compared to £32,651 a year ago.
The Consumer Price Index (CPI) – one measure used to calculate the cost of living – grew by just 1% in the year to November 2014. According to the research, this means that average annual salary increases continue to outpace CPI inflation and shows real wage growth.
Consumer service jobs saw the largest annual increase in average advertised salaries of 16.5% over the year to November to reach £21,353, say Adzuna.
Andrew Hunter said:
“The customer services sector has evolved in response to the changing landscape of business engagement.
Adding: “This increase in their average salary reflects companies’ desire to attract the best talent for this crucial sector.”
Average advertised salaries for jobs in Hospitality & Catering took the largest annual plunge to £24,148, which represents a decrease of 2.11% since November last year.
Andrew Hunter said:
“A decrease in average advertised salaries at the close of the year for Hospitality & Catering might seem counter-intuitive, but it’s actually a regular seasonal occurrence.
“Many businesses take on extra seasonal staff for low-wage work in order to cope with the extra footfall during this time of year.”
Manufacturing jobs experienced a yearly salary increase to £30,678 in November, representing a 14.5% yearly increase. This increase was followed closely by a 10.4% annual salary boost in Trade & Construction, with an average advertised salary of £38,704.
Mr Hunter said companies in these sectors “are not simply offering higher salaries because they’re feeling flush with cash”, but because “they’re struggling to attract the talent they need to expand”.
“They need to fill the existing skills gap before we can expect other sectors to feel the benefits”, said Mr Hunter.
Scotland is the only region of the UK to experience a year-on-year salary decrease. With average advertised salaries growing by just 0.53% over 2014 it leaves Scotland trailing behind the rest of the UK. According to the research, this was caused by the ‘instability resulting from the referendum’.
At the same time, North East England (11.60%), Yorkshire and The Humber (10.76%) and North West England (8.78%) have jostled Wales (8.44%) out of the pole position it had been enjoying thanks to the Jobs Growth Wales initiative.
Average Northern salaries remain lower than in the South, but at the current rates of change this may not remain the case for long – expect the North to surge forward in 2015, say Adzuna.
Andrew Hunter said:
“A manufacturing boom has buoyed the Northern jobs market this year. The traditional home of manufacturing in the UK is seeing a new demand for highly-skilled labour, which is reflected in healthy annual wage growth.
> Really ? All I see in my local job searches are cleaning jobs at 16 hours/week or less, or zero hours hospitality-type jobs. Jobs at 30+ hours a week seem to be very rare.
“There is a more complicated picture for Scotland, another region where average salaries are tightly tied to a dominant job sector – waning salaries in Energy, Oil and Gas have been compounded across the region by recent political instability.
“However, advertised salaries still managed to grow on average in 2014. The margin of growth was undeniably lower than the increases enjoyed by the rest of the UK.
“Nevertheless, average growth despite the unique setbacks faced by the Scottish jobs market speaks volumes of the market’s resilience – there is every reason to hope Scottish salaries and employment will bounce back into the coming year.”
Source – Welfare Weekly, 31 Dec 2014
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