Slowdown in unemployment falls as young people find job problems

Wed, 21/01/2015 - 13:33 -- nick

The unemployment figures for the last three months have shown a worsening of conditions even as salary pressures ease.

Between September and November 2014, the Office for National Statistics (ONS) said the number out of work went down by 58,000 to 1.91 million, the smallest fall for a year.

The number in work saw a similar issue, with only 37,000 more to sit at 30.8 million, the smallest rise for a year and a half.

The main issue behind these reverses was a rise in the number of young people out of work, up 30,000 as they are in danger of being forgotten again by any recovery.

The ONS has finally begun trying to incorporate Universal Credit claimants into their estimates, although these are only 'experimental' at this stage as there is no reliable method for doing this.

These new figures show a claimant count of 886,200, down 26,800 from the previous month, a slightly bigger fall, and it must be hoped that the ONS can start to make their overall count more reliable by incorporating UC fully.

There was better news for those in work who saw their wages rise by 1.7% on average, finally outstripping inflation after years of falling living standards.

To some extent this change is expected; there comes a point in every economy where wages are forced up because firms are chasing workers with skills that aren't plentiful, and need to pay more to get them.

There is still a problem with the way wages are calculated by the ONS; they do not include the earnings of more than four million self-employed people who earn less on average than a full-time minimum wage employee.

Our current historic low inflation rate has been reached almost entirely due to plummeting petrol prices, and these are likely to remain volatile, meaning future prices - and inflation - could easily outstrip wages again soon.

The number claiming out-of-work benefits fell by 24,200 in December, but that is only around half of November's fall.

The continuing issue of the economically inactive - those who are not in the workplace because they care for others, look after a home full time, are students, are disabled or long term sick - saw further troubles, with a 66,000 rise.

It has been suggested that one of the main issues here has been the withdrawal of Atos from the government contract to assess disabled and sick people, meaning fewer are being moved from those benefits into unemployment.

This welcome development won't last; a new firm, Maximus, has now started delivering on the contract and more are likely to be found fit for work soon.

The fall in overall unemployment is welcome, as is the rise in wages, but it will take many years before the damage to the labour market and living standards is undone.