New jobs record... but wages can’t keep pace
UNEMPLOYMENT has dipped 10- year low, official figures show.
There are 31.4 million people in work, which is 521,000 more than this time last year. At 74.1 per cent of the working- age population, this is the highest rate since comparable records began in 1971.
But UK wages continue to rise slowly. Average earnings before bonuses rose by 1.9 per cent in the year to December.
This was the slowest growth for a year – 0.2 per cent down on November’s annual figure and below the rate before the financial crash in 2008.
The jobless total fell by another 60,000 in the last three months of 2015 to 1.69 million, or 5.1 per cent of the workforce – the lowest since the end of 2005.
The number of people claiming unemployment benefit also fell, by 14,800 last month to 760,200 – the lowest figure for 40 years. There were a record 776,000 job vacancies.
The proportion of young people in jobs after leaving full- time education – 74.7 per cent – is the highest for 10 years.
Chancellor George Osborne said: “With a record number of people in work, and unemployment reaching 10- year lows, this is further evidence of
to
a the need to stick to the Government’s long- term plan to deliver economic security against the cocktail of risks affecting the world.”
However, experts warned that slow growth in wages and productivity remain a concern. Neil Carberry, of the CBI, said: “While it’s encouraging that employment continues to rise strongly, lacklustre pay growth underlines the need for a pick- up in productivity before wages can rise faster.”
James Sproule, chief economist at the Institute of Directors, said the modest wage growth could be linked to “impressive increases” in the number of young people with jobs. But he warned that billions of pounds of extra burdens would land on companies this year.
He said: “Cumulatively, they could lead to low- skilled workers being priced out of the job market.”
Gerwyn Davies, of the personnel body CIPD, said half the welcome rise in workers was explained by self- employment. With wage growth still way off its expected three per cent, employers needed to boost productivity and skills to help to fund the growing workforce.
TUC general secretary Frances O’Grady said: “It’s good news that employment is rising, but more needs to be done to ensure these jobs are of decent quality. Wage growth remains in the slow lane. Putting money back into people’s pockets is essential to securing a strong recovery, and avoiding the debt- fuelled spending boom that caused the last financial crisis.”
Shadow work secretary Owen Smith said: “At this rate, after 10 years of the Tories, the pay of working families will have risen at its lowest level in nearly 100 years.”
Economic think- tank the Resolution Foundation expects pay growth to stay flat, with the next year- on- year increase likely to be 1.8 or 1.9 per cent.