The full cohort of Labour Market statistics came out today from ONS, summarised in their usual helpful Statistical Bulletin. As part of our assessment of the UK economy over the life of the present government, we thought it would be interesting to compare the current figures with those of the summer of 2010, to see what significant changes have taken place. Here you can see some percentage changes over 3 years. Note in particular how far the increase in GDP over 3 years is below the increase in employment and hours worked.
changes in emp and GDP 2010-2013
Blue = 2010 (100%), red = 2013. The chart’s employment and population statistics, from ONS, compare June-August 2010 with May-July 2013. GDP compares Q3 2010 with Q2 2013
From this we see that the total number of of those over 16 has grown by 2.14%, (1,066,000) and the economically active by 2.34% (740,000). Employment (full or part time, employed and self-employed) has risen by 2.43%, or 792,000, while unemployment has also risen, but by 1.3% (34,000). In its own terms, this could all be categorized as some (but not stellar) improvement, given the shock the economy had faced in 2008-09, and is certainly better than many Eurozone countries. The growth of jobs has just about kept up with the increase in population, but not enough to make a real dent in the unemployment number (2.5m). And it masks other major weaknesses, as we show.
Very significant – and this lies at the heart of the alleged “productivity puzzle” – are the changes in hours worked, measured against the changes in economic activity as measured by GDP. The average number of hours worked per week has risen by 4.14%, whilst GDP has risen (Q3 2010 to Q2 2013) by a meagre 1.81%, or about 0.6% per year. This is about the same as the total population increase over the period, meaning that GDP per head of population has been stagnant whilst productivity has fallen.
For the record, we have also looked at the picture for those between 16 and 64 years. The pattern is very similar, though the overall total population has increased less.
The next chart looks at percentage changes in full-time and part-time employment over 3 years. The absolute numbers are of course far greater for those in employment than for the self-employed.
full and part time corr
2 responses
But presumably the average salary increase of 3.8% will also be inflated by larger rises going to the already well paid?
“Alongside this, the biggest percentage increase is in the self-employed, and the part-time self-employed are growing faster than any other sector.”
This is what explains the modest increase in average weekly earnings. Full-time earnings are up 4.1%. AWE is calculated on total salaries divided by total employment so is susceptible to changes in employment structure. It doesn’t mean that individuals in work are receiving below inflation increases (actually a 3.8% rise between 2011 and 2012 according to ASHE)- rather it is that the new jobs being added to the economy are on average lower paid either due to being in low earning occupations or in part-time employment.