Unemployment falls by 24,000 but wages down again - with UnemployedNet comment

Wed, 11/09/2013 - 13:39 -- nick

Unemployment in the UK fell by 24,000 between May and July to stand at 2.49 million people.

The rate fell marginally from 7.8% to 7.7%, while the number claiming Jobseeker's Allowance also went down by 32,600 to 1.4 million.

There was an increase of 80,000 people in work over the same period according to the Office for National Statistics (ONS).

While there are now 275,000 more people in work than a year ago, population growth means the number of unemployed has only gone down by 105,000 since then.

The number of economically inactive people continued to decrease - by 52,000 - and this may be linked to the government's work cabability assessment of disabled people which is finding large numbers fit for work even where they are suffering terminal illnesses or life-dominating conditions.

Wages continued their poor performance, going up only 1% over the last year when inflation is at 2.9%, meaning regular wages continue to lose real value.

It has been suggested that working people getting poorer is a reason why anti-benefits opinions have been hardening, with workers less keen to pay tax to support welfare as the value of their wages goes down.

The poor performance of wages is likely to be a key reason for the better-than-expected unemployment rate, with more employees getting less money.

The decline in the total value of incomes in the UK is likely to be hurting the economy, and growth will remain subdued until wages start rising.

The quality of employment has been called into question again; since 2008, there are 328,000 more people in employment, but opportunities are mostly part-time, with the number in full-time jobs actually going down by 233,000 in the same period.

The ONS points out that the number of people working part-time because they cannot get full-time work is more than double its 2008 rate at 1.45 million people.

At Prime Minister's question time David Cameron said there was "no complacency" in the government and that it recognised it had "a long way to go", while Shadow Leader Ed Miliband accused Chancellor George Osborne of complacently calling the end of the recession prematurely.

Miliband also pointed out that the average wage was £1,500 lower now in real terms than when the coalition came to power.

UnemployedNet says:

The headline figures for employment and unemployment look reasonable, but dig behind them and the picture is not so bright.

Unemployment falls are likely to be linked to sanctions; figures released in June and reported by Disabled People Against Cuts show that the number having benefits removed has rocketed from around 130,000 each year in 2006 to 110,000 in a single month more recently.

The fact that more people left Jobseeker's Allowance than found work suggests sanctions are likely to be playing a part.

Behind all joblessness lie personal stories of suffering, both material and spiritual, but behind sanctions are stories of real deprivation.

Imagine having all of your income withdrawn, having no savings and no access to borrowing, and trying to live on no money simply because you didn't sign up to the Universal Jobmatch website, or an adviser believed you weren't looking for work hard enough, or you missed one meeting with your adviser.

Those who are sanctioned are likely to form an underclass forced to turn to crime simply to feed themselves; only the most short-sighted government would believe that this was better than having to justify higher unemployment figures.

The constant erosion of the value of wages, a major issue under this government, gives workless people another set of problems.

First, they often cannot afford to take entry-level work, and decreasing the value of benefits at the same rate as wages is no answer to this.

Second, the economy cannot recover - and provide enough jobs for all - until people have enough money to spend in our shops and on our services.

And third, rightly angry working people are looking for reasons why they are getting poorer, and - with encouragement from papers and politicians - are looking at unemployed people as the source of their problems.

But perhaps the biggest scandal is the story of youth unemployment.

After some successes, and the government trumpeting its youth contract which was supposed to guarantee all young people a job, training place, work experience or apprenticeship, problems for young people are growing.

There was a huge drop of 77,000 under-25s in work last quarter, and while only 9,000 were reported as being unemployed, 53,000 more were economically inactive, meaning they were not being productive with their lives.

It is vital that young people are gven a good start to their lives, and suitable opportunities provided to them to ensure they learn how to be part of a workforce and gain much needed experience.

The youth contract has fallen hugely short of its targets, reporting in July that only 4,700 were in work after six months when it was supposed to help more than ten times that number.

The headlines hide some damaging truths.

Main Stories: