In common with some of you reading this blog, I spent much of yesterday at a seminar organised by the Office for National Statistics (ONS) listening to assembled economists and number crunchers puzzling over why Britain’s stagnant economy is somehow creating jobs by the bucket load albeit at the cost of a slump in labour productivity.
As is often the case at such events, most participants agreed there is a puzzle to solve but no one was fully convinced by any of the suggested explanations, though the ONS was at pains to stress there is nothing dodgy about the numbers it churns out. I therefore left feeling rather like one of those bemused coppers in television’s Silent Witness who can’t understand why after hours of picking over a horribly mutilated corpse the expert pathologists are unable to tell him how, let alone why, the victim died.
I’m no less bemused this morning having sifted through the latest ONS labour market statistics. There’s no doubting the headline news is good – a quarterly June to August rise of 212,000 in the number of people in work and 50,000 fewer unemployed. August in particular appears to have been an amazingly strong month of almost Olympian proportions in the jobs market, the ONS monthly estimate suggesting that total unemployment may have dropped by more than 190,000 in that single month alone.
Best of all 18-24 year olds account for almost a quarter of the rise in employment, helping to cut total youth unemployment to below 1 million. And better still, these jobs have gone to NEETs, jobless young people not in education or training, rather than students looking for jobs to support them through college.
Yet not everything in the garden is rosy. 1 in 3 new jobs created in the latest quarter are ‘mini-jobs’ providing fewer than 15 hours paid work per week while more than half (54%) provide fewer than 30 hours. Moreover, the annual rate of growth in average earnings was just 1.7%, much slower than the corresponding rise in the Consumer Prices Index.
For millions of people in work the downside of generating jobs in a stagnant economy is therefore low hours at low pay and with little prospect of getting a pay rise big enough to keep pace with price inflation. A surge in low paid mini jobs may be better than no jobs at all but this is not a sign that the economy is experiencing anything like a proper recovery.