Friday, 19 August 2011

Why the unemployment stats are baloney

The monthly unemployment stats were released this week.  Unemployment has gone up and the economy seems to be stagnating. 

One thing gets my goat about these figures. I read a lot of lazy journalism with such a shallow understanding of the employment situation in this country that it is meaningless.  The unemployment figures are therefore just a load of old baloney and commentaries are pants.

Then I read a great New Statesman post on Wednesday that explains what the situation is and quantifies it.  It is perfectly understandable and not over long - read it here.

The key points are these:
  • Unemployment in the UK is 2.49m or 7.9%

  • There are also 1.26m involuntary part-time workers.  These are part-time workers who want/need a full time jobs but cannot find one.  They represent 16% of the UK's 7.9m part-time workers. The number of involuntary part-timers has increased by 17% over 12 months. 

  • There are 601k temporary workers who could not find a permanent job (as opposed to those who did not want one) This is an increase of 5.8 % over 12 months. They represent 37 % of the UK's 1.6m temporary workers. category.
    Also women and young people are being particularly badly affected by unemployment at the moment.

    Female unemployment is 1.05m.  Youth unemployment is 949k.

    Women make up 65 % of the public sector workforce, so are being hit hardest just now by public sector cuts.  Women bore the brunt of redundancies with 69,000 made redundant over the last three months, this is up 41.5 % over 12 months.  (Though presumably men bore a heavier burden during the first part of the recession in 2008 onwards when the private sector was hit hardest)

    There is a real crisis of youth unemployment.  The unemployment rate for 16-24 year olds not in full-time education is 18.8 %.  There is a risk that it will rise further as Scottish Higher and A-level students enter the labour market for the first time - and many fail to get into university as many are oversubscribed in the rush to gain places ahead of the introduction of fees in England and Wales.

    To understand unemployment in a time of stagnation you also need to understand under employment - ie all the people doing part time work or temporary contracts because full time work is not there.

    If you take these together this means 4.351m people are unemployed or under employed at the moment.  And this is without taking account of anyone who has replaced a well paid job with a much lower paid job.

    (ie Middle managers or professionals who now find themselves working in a supermarket, doing a much smaller and lower paid job for a small company or have started up as self employed after losing a job and are not earning much.)  This category is difficult to quantify but if we could it would probably take the unemployed and underemployed category over 5 million!!!

    This is the true size of unemployment.

    And the crisis in youth unemployment and the challenges for many women are the key themes.

    This is without addressing the issues of the long term unemployed, regional variations around the UK or any disproportionate affects on particular industries. 

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