UK employment at record high, but wages don’t match
The UK has its highest ever employment rate of 74%, with a record 31.4 million people in work.
Over the past year, the number of people in work has risen 588,000, with nearly 75% of the rise in employment in the past year being full-time.
Today’s official figures show that over the last year more than half-a-million more people are now in work, bringing employment to a new record high of 31.4 million. This growth has been driven by a rise in full-time jobs and the number of vacancies has reached more than 750,000.
Unemployment now stands at 5.1% – the lowest since early 2006 – and long-term unemployment has fallen by 25% over the year to 488,000, the lowest in six years.
Wages have grown slowly, however, rising 2% over the last year.
Employment minister, Priti Patel, said, “This is a record-breaking set of figures – and has got 2016 off to a fantastic start.
“There are now more people in work than ever before and wages are growing – a credit to hardworking Brits and businesses alike. And in a further demonstration of the strength of the UK labour market, today’s figures show there are a record three quarters of a million vacancies.
“As a One Nation Government we will build on this throughout the coming year – doubling childcare for working parents and introducing the new National Living Wage – ensuring that everyone has increased financial security and the opportunity to get on and succeed in life.”
The set of figures have also shown that the number of women in work is up over a million since 2010 to new record high of 14.66 million.
The proportion of young people who have left full-time education and are out of work has fallen to a record low of 14.1%. The employment rate for young people who have left full-time education continues to rise – up to 74.6%, which remains the highest in over a decade.
Mark Beatson, chief economist at the CIPD, said, “Today’s figures show that jobs growth in the UK has recovered, with the employment rate at its highest level since at least 1971. Demand for labour is still high, as seen by record numbers of unfilled vacancies, and it’s positive to see the supply is still there to fill these jobs. Some of that supply is coming from other parts of the EU, but still the UK unemployment rate continues to fall nevertheless, now standing just above 5%.
“It’s encouraging to see unemployment falling fastest among the 18-24 age group, but important to note that unemployment has not fallen over the past year among the over-50s. This is partly because of increasing numbers of people in this age group, but it is also a reminder that older workers can find it especially difficult to find another job if they become unemployed. As the working population ages, it’s important that employers change their approach to workforce planning and open up their recruitment systems to much more diverse talent pools, as groups such as the over-50s can often bring as many unique skills and experience as those under 25. If we are to balance out employment at either end of the age spectrum, we need to see much greater efforts from government to ensure that those who want to keep working over the age of 50 have every chance to do so.
“Average earnings growth has also fallen to 2%, which is close to the underlying rate of pay growth that we’ve seen over the last few years. This is not surprising because the fundamental conditions required for a step change in pay growth are simply not there. Most employers still believe there are enough competent applicants out there to fill their vacancies, and, furthermore, productivity growth remains relatively weak. Conditions remain good for firms to invest in training and development and upgrading the skill content of jobs."
Matthew Fell, CBI chief of staff, said, “The labour market continues to be a bright spot for the UK economy, reflecting strong domestic demand and the importance of maintaining flexibility. However, global risks are ramping up, so there’s no room for complacency.
“While employment has continued to rise strongly, with the largest increase for almost 18 months, private sector pay growth has continued to slow, underlining the need for a sustained recovery in productivity.”
Doug Monro, co-founder of Adzuna, commented, “We have reached an important milestone with employment levels at their highest on record, but new challenges are starting to emerge for many workers. This week’s announcement on the closure of more jobs in the steel industry is a prime example of the trials facing workers in 2016 – the need to adapt to suit the new skills we need, by retraining now redundant workers.
“The UK jobs landscape is changing. Strong sterling is already severely dampening our ability to manufacture and sell goods overseas. Scotland’s oil industry has been hit hard by falling prices. Meanwhile, the IT and Technology sectors are booming with new vacancies opening faster than we can fill them. As the number of jobseekers still available to fill new openings decreases, upskilling workers will become a crucial component of fixing the skills shortage.
“Improving wages are a bright spot on the horizon for workers. Our last Jobs Report reported the first monthly rise in advertised salaries in eight months in November – meaning new jobseekers are starting to see increased salary packages. Meanwhile, pay for those in work is also rising.”