Our writer argues that only jobs that pay the Real Living Wage should count when we celebrate high UK employment.
Employment figures came out this month and, on the surface at least, they were impressive.
The data was published by the Office for National Statistics and showed that the country’s unemployment rate had dropped to just 4%.
Even better sounding were the more specific reasons to celebrate; youth unemployment was down by more than 45% compared to 2010, the Department for Work and Pensions rejoiced, and more older people were in work than ever before.
Minister of state for employment Alok Sharma was pretty clear this was a good news story, adding: “We’ve backed businesses to create jobs and reformed welfare to make work pay, and thanks to the Government’s policies and employers’ confidence in the British economy we have seen over 3.3 million more people employed in our country since 2010.
“Over 75% of these people are employed in permanent jobs and full-time jobs and over 70% in higher-level occupations which pay higher wages.”
High wages, high employment, it all sounds very impressive. But I think we’re missing a key measure.
Now read: ‘We need to tell students the truth about debt’
Low paid, insecure
While the majority of people may be benefitting from permanent work, I think when you dig a little deeper the numbers are not as great as they may seem.
Joblessness may be at the lowest since 1975 but pay growth in the UK has slowed to its weakest level in almost 12 months.
Real pay – i.e. average weekly earnings adjusted for inflation – grew by just 0.4% excluding bonuses, compared to a year earlier.
So it’s my hunch that there’s more to our employment story than these figures can reveal. If we’ve lost many EU workers and employment is high but wages are still not climbing substantially as employers compete for workers then something isn’t right.
But something concerns me even more than this and that’s whether these numbers can show the reality of life for the country’s lowest page workers.
3 best ways to guarantee your income
Zero-hour contracts
Yes, the number of people in zero-hour contracts fell between April and June, fell by 104,000, but that still leaves 780,000 people working this way.
For some, that’s a choice but for many, it leaves them struggling to manage their childcare or pay for groceries. The figures revealed that 66% of workers on these contracts had been employed this way for more than a year.
And the TUC says that when it has spoken to workers, many say it is simply the only kind of work available.
Two-thirds of workers pilled by the union would rather have guaranteed hours and only one in four prefer working on a zero-hour contract.
Those kinds of contracts are just part of the issue. When you factor in the gig economy as well, TUC figures show that one in nine workers are trapped in insecure work.
That’s almost 3.8 million.
Now read: Are loveMONEY readers abandoning Amazon?
It doesn’t make sense to me that we should count those towards employment in the same way we’d count a full-time, permanent role.
Clearly, they are not unemployed but I don’t think those jobs should count towards our ‘lowest unemployment level in more than 40 years’ official statistics.
It helps the official unemployment numbers look too rosy and that does not reflect what’s happening on the ground.
In-work poverty
More people may be in work, but is that really a good news story if they remain trapped in poverty?
Analysis released in March by the Joseph Rowntree Foundation showed that two-thirds of children and working-age adults who live in poverty belong to working households.
Yes, their data is a few months older than the most recent employment figures but nothing suggests poverty has been solved since March.
Campbell Robb, chief executive of the JRF, said then: “It’s totally unacceptable that so many working households are still locked in poverty. Families with children are continuing to struggle to make ends meet, and more households are at risk of being pulled in to poverty.
“Beyond the statistics, poverty restricts people’s choices meaning that families are having to make impossible decisions such as whether to heat their homes or pay their rent.
“We share a moral responsibility to make sure that everyone has the opportunity to build a better life. The Government must act to right the wrong of in-work poverty.”
Now read: Let’s talk about legalising and taxing cannabis
When employers pay below a real living wage, those salaries must be topped up by public funds and cuts to welfare mean that those benefits are not as much protection as they have been in the past.
True picture
I don’t believe that we should trumpet low unemployment without better reflecting the inadequacies of some of the jobs people work in – jobs that don’t pay enough or do not provide enough hours or stability for workers.
More people may be in work than have been for decades but that is really only a good news story if work is paying for those people and providing a decent standard of living for both them and their families.
This is not a criticism of the current government. We have never measured unemployment in terms of job security or living wage – such data is found deep within the Office for National Statistics’ analysis and not reflected by the headline figure.
However, in a changing jobs market and with more political and business upheaval on the horizon in the form of Brexit, I think it’s become essential to abandon the headline figure of high employment.
Now read: A decade of misery for train commuters but more price hikes to come
I want politicians to have to spell out how employment is looking in terms of security of hours and security of pay, not this simple bums-on-seats measure of whether everyone is working.
Because that will be a true measure of our country’s employment health.
What do you think? Should politicians stop talking about low unemployment and instead discuss the kinds of employment, or do we need a headline figure like this? Have your say using the comments below.