Trade Union Congress (TUC) Media Release:
Unemployment rates and levels of joblessness are higher today than before the recession in every region and nation of the UK and across all working age groups – suggesting that the economy is still less healthy than it was before the recession, the TUC warns today (Monday) ahead of the publication of the latest jobs figures later this week.
Northern Ireland has the biggest gap between its current and pre-recession unemployment rates. Across Northern Ireland unemployment is currently running at 6.9 per cent, 68 per higher today than six years ago, when it was 4.1 per cent. The unemployment rates in Scotland and Yorkshire and the Humber are 50 per cent higher today than before the recession.
The biggest unemployment gap by age group is among young people, with the number of unemployed 16-24 year olds 167,000 higher than six years ago. In the West Midlands for example, there are currently 20,000 more young people out of work than there were six years ago.
In most parts of the UK the jobs gaps for young people are higher than for any other age group. Unemployment levels are only lower now than six years ago amongst 16-24 year olds in the East Midlands and 35-49 year olds in Wales.
Much of the debate around unemployment has been about the rate falling below seven per cent – the trigger set by the Bank of England for possible interest rate rises. However, with over two million people still out of work – half a million higher than before the recession – and many more under-employed it remains far too early for the Bank of England to be considering an interest rate rise, says the TUC.
The number of unemployed people across the UK is still far in excess of pre-recession levels, in spite of the recent upturn in the jobs market, says the TUC. While the size of the economy is likely to return to pre-recession levels soon, unemployment levels are recovering much more slowly and the analysis shows that more needs to be done to get people back into work.
TUC General Secretary Frances O’Grady said: “The recent upturn in the economy has prompted lots of speculation about an increase in interest rates. Those hawks that are keen for interest rates to rise have forgotten that unemployment is still over two million.
“In some parts of the UK, unemployment is 50 per cent higher than it was before the recession. The talk in the City and around Westminster may be about a fast growing economy but the recovery still feels a good way off for millions of people still desperate for work across the rest of the country.
“The government should be doing more to get unemployment down in every part of the UK. High levels of youth joblessness are particularly concerning. The growing talk of an interest rise is a worrying distraction from this far bigger economic and social problem.”
Source – Welfare News Service, 14 July 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
Two North-East towns have the highest youth unemployment in the country, a report claims.
Middlesbrough and Stockton were ranked top of a youth unemployment table prepared by The Work Foundation.
The Lancaster University-based organisation’s report, The Geography Of Youth Unemployment – A Route Map For Change, claims that unemployment rates for 16 to 24-year-olds in the two towns is more than 25 per cent.
In contrast, York was found to have the second lowest youth unemployment in the country at less than 13 per cent.
The study recommends that town and cities reduce their rates by ensuring that local services work together more effectively.
The paper argues that without effective, targeted action from national and local government, businesses, and educators, a generation of young people in these cities will face a bleak future in the labour market.
Commenting on the paper, Lizzie Crowley, head of youth unemployment programmes at The Work Foundation, said: “Urgent action is needed to ensure young people get the right support to either continue in school, further training or with getting a job.”
Commenting on the report, Stockton Council leader Councillor Bob Cook said it was a “nonsense that the youth unemployment rate in Stockton was the highest in the country”.
“That said, we know that the current economic climate has made it tough for young people to get a foothold on the career ladder.
“We are determined to help which is why our children and young people select committee is in the final stages of an in depth scrutiny review looking at how education and business can work together to make sure that learning provision matches local industry need.”
Source – Northern Echo 08 April 2014
George Osborne (also known as Natalie Rowe’s ‘gimp bitch’) made a speech at Tilbury Port in which he stated one of his aims is to achieve full employment in the UK (or whatever remains of it after Scotland decides it’s future).
Osborne said “Today I’m making a new commitment, a commitment to fight for full employment in Britain – making jobs a central goal of our economic plan.
“There is no reason why Britain shouldn’t aim to have the highest employment rate of any of the world’s leading economies, to have more people working than any of the other countries in the G7 group.
“That’s my ambition: the best place in the world to create a job, to get a job, to keep a job, to…
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Old Tory policies die hard – or perhaps they (like Labour, LibDems, UKIP, etc) just dont have the depth of imagination to think up new innovative ones.
Whatever, another Thatcherite policy rears its ugly head again. All the way from the days when they seriously considered cutting cities like Liverpoool adrift to die, comes a reprise of Norman Tebbit’s “on yer bike” advice.
An article in The Economist titled Some towns cannot be preserved. Save their inhabitants instead informs us that –
“Middlesbrough, Burnley, Hartlepool, Hull and many others were in trouble even before the financial crisis. These days their unemployment rates are roughly double the national average, and talented young people are draining away. Their high streets are thick with betting shops and payday lenders, if they are not empty.
“Under the last Labour government these towns were propped up on piles of public money. Some built museums and arts centres in an attempt to draw tourists, though this rarely worked. All became dependent on welfare.
“But there is little money for grand projects these days. And cuts to welfare, enacted by the Conservative-led coalition government in an attempt to balance the books, are falling brutally there. In Hartlepool the cuts amount to £712 for every working-age person. In Guildford, a middle-class commuter town south of London, they add up to just £263.”
So, nothing we didn’t already know. Can you guess what the remedy is going to be ?
“Governments should not try to rescue failing towns. Instead, they should support the people who live in them.
That means helping them to commute or move to places where there are jobs—and giving them the skills to get those jobs.”
Ok, right – so that means we all have to uproot and head for the South East ? And, if/when we manage to scrabble to the top of the heap and win the coveted prize of a minimum wage service industry job, where are we going to live ? Some London boroughs are already enacting what amounts to economic cleansing of the poor when it comes to housing.
Still, perhaps we’ll see the esthablishment of squatter camps outside the city limits, from where those with jobs can be bussed in every day to labour for their pennies.
Actually, the article may have been thinking along similar lines – “…new communities can be created in growing suburbs fringing successful cities. It has happened before.”
It certainly has. But that doesn’t mean it’s a good thing. Finally, I’d like to quote one of the comments published in response to the article, which I think succinctly sums up the problems that the piece’s author evidently failed to forsee –
“The obvious consequence of this article is that you support the people by moving them from “dead” areas to “live” areas like, er, London and the Greater South East. Obviously in leaving a dead area you will get very little for your house (after all it is being effectively abandoned), so you will have to be subsidised in the South – or live on the streets – something I don’t think the locals in London like.
Then of course the problem is London
– The motorways are clogged (despite having more lanes than anywhere else in the country),
– the railways are apparently a hell hole (despite having better rolling stock than the rail-buses we still have where I live and despite getting the Crossrail investment and tube extensions),
– the airports are apparently even worse (despite or possibly because of a hogging of international connections)
– Housing is a nightmare – made worse apparently by immigrants (you wait until the Northerners arrive!)
– Key workers are not available (probably because they cannot afford to live in central London and cannot afford to travel into London)
– There are water shortages (which will probably get worse when the people from Hartlepool, Burnley, Hull Middlesbrough et al arrive)
Actually being unemployed and living on the Durham coast sounds like quite a good life in comparison – and will probably cost the exchequer less than solving all the additional problems London would have if you moved hundreds of thousands, if not millions of people from “dead” areas to London.”
Economist, 12 Oct 2013 http://www.economist.com/news/leaders/21587790-city-sicker