UK-US Jobs Similarity
Twin US/UK employer surveys highlight similarity of jobs downturn on both sides of Atlantic
As Prime Minister Gordon Brown prepares for his first official meeting with President Obama in Washington today, a new comparison of surveys of US and UK employers finds a marked similarity in the scale and nature of recent job losses in both countries.
The comparison of Labour Market Outlook surveys conducted in the UK by the Chartered Institute of Personnel and Development (CIPD) and in the US by the Society of Human Resource Management (SHRM) reports recession-related job cuts of a similar magnitude in both countries, although the UK economy is experiencing its jobs downturn around one calendar quarter later than the US.
The SHRM LMO survey reports that 1 in 3 US employers cut jobs in the final quarter of 2008, similar to the proportion of UK employers planning job cuts in the first quarter of 2009 according to the CIPD. However, the SHRM survey suggests slightly fewer first quarter US job cuts with 1 in 5 employers planning to cut jobs which, if the similarity of experience continues, might indicate that the worst of the current UK jobs cull could be over by Easter.
Both LMO surveys show that the manufacturing sector is shedding staff at a higher rate than the rest of the economy, followed by private sector services. Both surveys also indicate that managers and professionals are being relatively hard hit.
Gerwyn Davies, CIPD Public Policy Adviser comments, Our comparison of the US and UK studies highlights a marked degree of transatlantic trauma affecting the jobs market. In proportionate terms the 2.6 million jobs lost to the US economy in 2008 is in line with the CIPDs expectation that the UK economy will shed at least 600,000 in 2009. And judging by the similarity of experience in both countries there is clearly some way to go before the jobs fallout from the recession comes to an end in either country.
The first quarterly comparison of UK and US LMOs also includes a look at official jobs statistics for both countries. In keeping with the employer survey findings, official figures show the UK and US jobs markets being affected in similar fashion but with the UK outcome trailing what happens in the US. This can be seen in the way UK has followed the rise in unemployment (see Figure 1), but also in a growing gap between male and female unemployment (see Figure 2), Other similarities include a sharp drop in the number of people employed in the manufacturing sector and a slight increase in the numbers employed in health, education and public administration since the onset of recession.
Davies continues, All eyes will now be on Gordon Brown and Barack Obama as they meet this week to help both countries overcome their shared economic challenges. However, it seems a foregone conclusion that the news on jobs will get worse before it gets better.