UK Economy: For the unemployed, it is like a game of musical chairs   

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To listen to the Prime Minister and the Tory faithful at Prime Minister’s Questions today, you’d think Britain was a land of jobs a plenty, little poverty and charting a course to prosperity.

The baying mob on the government benches were reacting to the latest Office for National Statistics (ONS) report on the state of the labour market.

On the surface, the situation looks promising and appears to show a partial recovery.

According to the official statistics, 30.64 million people are in work, 254,000 more than for December 2013 to February 2014 and 929,000 more than a year earlier.

The employment rate continued to rise, reaching 73.1% for March to May 2014.

It last reached 73.1% in December 2004 to February 2005 and, since records began in 1971, it has never been higher.

And there are 2.12 million unemployed people, 121,000 fewer than for December 2013 to February 2014 and 383,000 fewer than a year earlier with the unemployment falling to 6.5% for March to May 2014, the lowest since October to December 2008.

So what’s the problem, I hear you ask?

The problem is the low pay, skill and insecure and part time nature of the jobs.

TUC leader Frances O’Grady points out: “If all the recovery can deliver is low-paid, low-productivity jobs – many of which don’t offer enough hours to get by – then it will pass most working people by and Britain’s long-term economic prospects will be seriously diminished.”

Wages have fallen behind price and inflation rises too.

Average pay including bonuses only rose by 0.3pc in the three months to May, down from 0.7pc growth in the months to April.

This equates to a real wage cut of 1.2pc, since Consumer Price Index (CPI) inflation in the year to May was 1.5pc.

It is even higher if you measure inflation by the Retail Price Index (RPI.)

Economic expert Professor Roger Seifert insists that it is no good to merely rely on statistics but to look for the reality behind them.

He said: Today’s figures, when unpacked, reveal a sorry story of stagnation, uneven economic trends, and no evidence of a sustainable recovery since the 2008 crash.

 

“Those deemed to be in work include a vast army of part-timers, some on the infamous zero-hours contracts, and others who are full-time but insecure.

 

“It also fails to measure the waste of skills and energy with large numbers of workers unable to develop their full potential in their current work.”

There is another group of people who are often overlooked – the “economically inactive.” This category includes the long term sick, students, unpaid carers and people who retired before 64 years old.

They are people without a job who have not actively sought work in the last four weeks and/or are not available to start work in the next two weeks

The TUC calculated that if you count those who want to and are able to work but do not fit the government’s criteria of “actively seeking work” then the true unemployment and underemployment rate stands at 6.1 million.

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https://fullfact.org/blog/true_unemployment_measure_TUC-3314

 

Professor Seifert concludes: “Overall the government’s policies have failed to set up a recovery, have failed to develop investment, have failed to improve productivity, and have failed to even out the regional and sectional imbalances in the social and economic life of the nation.

 

“This is all made worse by dismissal figures on earnings and particularly of the earnings of young workers.

 

“The Labour leadership, along with the TUC, need to explain how and when they will change this and drive up earnings as the start up for a sustainable, just, and planned recovery.”

 

Even if you accept the current unemployment figures of 2.12 million, then are only 648,000 vacancies for would-be workers to fill.

The UK economy for the unemployed is rather like a game of musical chairs; when the music stops, there will always be someone who goes without.

 

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