Unemployment rises again as number in work falls

Wed, 12/08/2015 - 12:37 -- nick

There was a shock rise in the number of jobless people in the last three months, confirming that the last figures weren't the blip some people claimed.

25,000 more people were out of work, and this is the first time in two years that unemployment has risen two months in a row, suggesting the British economy has hit a real problem.

At the same time the growth in the number in work turned negative with 63,000 fewer people in the workforce, and the number of job vacancies went down by 9,000 from its recent high, ending four years of consistent growth.

This suggests partly that those out of work do not always have the skills the modern job market needs, and more training funding needs to be provided by the new government to help them into new industries and roles. Jobcentres are focused on getting the workless off the benefit register as quickly as possible, and will rarely allow them to take time or provide the funding to get longer-term training even where this is highly likely to lead to sustained work, hurting their ability to get the kind of jobs which allow a decent standard of living and help them contribute to the economy in the long term.

The fight for skilled staff explains why wages have begun rising - up 2.4% in the last year - but also suggests a two-speed jobs market, with those who have sought-after experience able to command higher pay while those operating at the unskilled level, where many unemployed people are trying to enter, still struggle at or around the minimum wage.

We can expect this twin-track market to continue, and entry level wages are likely to stay low for a long time.

Unemployed people have not shared in any pay prosperity, with the Chancellor confirming last month that benefits would be frozen for the next four years. The increase in wages also takes the Conservative government further and further away from its 'moral' stance that the benefit cap relates to maximum pay levels.

As we warned over the last years, self-employment disguises unemployment for too many, particularly those who have been encouraged to register by their jobcentres or work programme providers with little prospect of winning any business.

The fall of 95,000 in the number of self-employed people in the last year may be linked to this; eventually those without an income will have to either sign on or get an employee job.

Behind these overall figures must be an economic 'recovery' that isn't as well established as the government wanted to believe. A lack of public investment and a lack of direct support for job creation means the UK is at the mercy of the market, and this goes up and down depending on conditions in the world around us.

Threats from the Greek economic situation, too much private debt and other issues have affected Britain, and only state action and investment can help the job market ride out these problems.