1st July 2013 Where are we at ?

I seems like I haven’t posted a blog entry here for a while.

Negligence ?

No, the UK labour market is intriguing at the moment.

Claims and Facts ?

The Chancellor of the Exchequer has claimed that the economy is off life support and in recovery.  He has set out plans for what the Government will do beyond the next election.  As the next election has, obviously, not happened yet and as the Chancellor will not be required after May 2015 to conform to plans announced in 2013 this amounts only to posturing and electioneering.

The UK seems to have a two speed economy at the moment.  Using house prices as a barometer of confidence; in the ‘core’ of London and the South East house prices are up 5% on pre-crunch values, while across the rest of the UK  house prices are down 9%.

Allegedly since this Government took over in 2010 over a million private sector jobs have been created, perhaps the claim is 1.5 million now ?

I have interrogated the NOMIS database (the Office for National Statistics database) seeking evidence for this claim and so far I haven’t found it.  I wonder on what the Chancellor bases his claims. 

I may of course be a contributor to this statistic, for having been made redundant from a full time public sector post I am now employed on a ‘freelance’ basis by two employers.  Although together these amount to less than full time work, and at times no work at all, I do wonder if I account for two of the million jobs claimed ?

Should I find additional part time irregular work with additional employers will I account for more jobs in the economy ?

If I do three hours a week for each of five different employers (okay an extreme example) would that count as five jobs or one part-time job ?   

I would like to know on what data the Government bases its claims.  Transparency please, Mr Osborne.  Perhaps I shall ask my MP to ask the Chancellor ?

The Labour Market

Certainly the number of benefits claimants has been in decline, but this decline is not necessarily a result of increased employment:

§  The Government is re-shaping the benefits system; part of this is ‘amended entitlement’

§  Journalists have found evidence that more people are working as members of what the press has labelled the ‘precipterate’; self-employed or employed as freelance

In a labour market where job seekers significantly outnumber vacancies and advertised vacancies can attract hundreds or thousands of applicants employers are applying rigorous and often automated methods to de-select applicants.  In this labour market experience is everything, the applicant may have considerable potential, but if their experience does not match they will not be among the handful selected for interview out of the 100 – 500 that typically apply.  For in the information age it is easy to apply and the replication of a vacancy across many platforms (recruitment sites) cost effectively markets vacancies to a host of job seekers.

There are those that say that the UK economy would be stimulated by further de-regulation of the labour market.  The UK labour market is already one of the most de-regulated among developed economies; close to the ‘hire and fire’ labour market of the US.  But we are told that the strength of the UK, the basis of its ability to ‘punch above its weight’ is creativity and innovation.  An old slogan of Sweden’s Social Democratic Party comes to mind “Secure People Dare”.

Demographics and the Labour Market

Around 1 million of the UK’s job seekers are 25 or under.  At the same time around 1 million of the UK’s pension age population are still working.  Part of this reflects a skill and experience mis-match as employers are choosing to employ older people rather than the young.  This suggests dysfunction in the UK labour market, benefits system and education systems; will current Government policies address these issues or are they ‘ideological indulgence’ ?

I fear, too often, they tend to look like the latter.

And alongside high unemployment we have hard to fill vacancies.  Government focus is on helping the unemployed into what are all too often low prospect, low security, low pay employment, rather than finding ways to develop the high skill, high value adding workforce that an advanced economy needs.

The Export Led Recovery

There was talk three years ago of an export led recovery.  There seems scant evidence of this and some evidence that the BRIC economies, to which we were, it was hoped, going to export, have begun to develop their own economic problems; credit crunch in China and social discord in Brazil.  The other EU states remain the UK’s main trade partners but doubt has been generated over the future of the UK’s political relationship with the EU.