UK’s Low Unemployment Is Turning The Eyes On Jobs Scenario

  • Feb 02, 2019 GMT
  • Team Kalkine
UK’s Low Unemployment Is Turning The Eyes On Jobs Scenario

The Office for National Statistics in the United Kingdom released its latest inferences from the Labour Force Survey conducted for households & businesses during September-November 2018 quarter, portraying an exemplary growth in the UK jobs market. Despite the global slowdown and political uncertainty, the government may celebrate resilience in this domain. South Yorkshire and Merseyside, that were previously underperforming, have witnessed a huge upswing and thus leading from the front.

According to the figures posted, the number of people at work rose to a high of 32.53 million, adding 141,000 over the previous quarter and 328,000 over the previous year. The economic activity for population in the 16-64 years of age bracket also increased with the economic inactivity rate estimated at 21%, depicting a year-on-year fall, thus pushing the employment rate to an impressive 75.8%, the highest since comparable estimates first began in 1971. The number of unemployed people changed only slightly and yet the unemployment rate has been estimated at a low level of 4%.  Specifically, for women aged 16-64 years, the 71% employment rate stems from the ongoing changes around State Pension age for women, resulting in lesser women retiring before 65.

Moving on to the wages, the survey also reports a rise of 3.3% in the average weekly earnings for employees in the UK in nominal terms excluding bonuses and 3.4% including bonuses relative to the previous year.

However, few research think-tanks and critics believe that the estimates paint a rosy picture camouflaging certain discrepancy at the grass root level in the UK labour market.  For instance, there has been a year on year drop with regards to employment in the public sector by about 120,000 in September. This was at the back of transfers of housing associations in England, Scotland and Wales to private sector. However, this was balanced but there is an increase in the number of people working for the National Health Service by 51,000 to 1.66 million, which accounts significantly in terms of the public sector employments. Meanwhile, the employment in the public sector education has remained relatively flat.

For the same quarter, the average weekly earnings in real terms increased only by 1.1% excluding bonuses and 1.2% including bonuses, which represents an inverse relation between earnings and prices.

Moreover, the main recipients of the boom remain the unprivileged lot at the bottom of the income spectrum. In addition, there is also an increased job insecurity associated with rising involuntary part time or agency work with a majority of people engaged in such situations. Thus, despite the reassuring estimates, precarious job opportunities, falling productivity, underemployment and sluggish wage growth pose noteworthy challenges for the UK economy, failing to provide quality jobs with financial stability.

Yet, it is interesting to note that the UK firms and businesses have continued to hire people amidst chaos caused by other developments. Moving forward, it is hard to predict if the trend in the UK labour market will continue in the months to come with businesses and government reorganising all aspects ahead of the Brexit day.

With Bank of England reducing the interest rates to a historic low level, the spotlight is back on diverse investment opportunities. 

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