Labour market statistics “nothing to be complacent about,” says IEA expert
IEA Editorial and Research Fellow Professor Len Shackleton responded to the latest ONS labour market statistics
“The ONS labour market figures do not, on the face of it, look too bad. The unemployment rate is up a bit to 4.5%, the employment rate is down a bit but still at 75.6%. Redundancies are up, but not at levels we saw after the financial crash.
“However the figures are misleading. We are looking backwards: the data cover June to August, when the economy was beginning to recover from lockdown and hours worked were rising sharply. In parts of the country economic activity is rapidly shrinking again as government restrictions kick in once more.
“Moreover, the standard definitions of employment and unemployment are questionable when applied to the economy during the summer. The millions of people on furlough during the June to August period are counted as employed, but it must be doubtful whether all of these really had jobs to go back to. As the Coronavirus Job Retention Scheme runs down, and new government assistance is much less generous, we can expect unemployment to rise sharply in the coming months.
“There are some trends discernible even in these lagging data which are very worrying – a disproportionate decline in employment of young people; a collapse of part-time work in many sectors (as retailing, hotels, bars and restaurants were still working well under capacity during the summer); and a vertiginous fall in self-employment. And the September Claimant Count figures, published on a different basis, show a further increase in those claiming work-related benefits.
“So there is certainly nothing here at all to be complacent about. We are in for a very rocky time this winter. It makes it imperative that we scrutinise carefully plans for further lockdowns, and we prepare for eventual recovery by making it easier for new jobs to be created through reassessing unnecessary regulation in both product markets and the labour market.”
The IEA’s new briefing paper on creating new jobs once this crisis has passed, authored by Professor Len Shackleton, can be found here.
Latest News from
Adam Smith Inst - UK Free Speech Under Threat24/11/2020 13:35:00
Government should introduce a United Kingdom Free Speech Act modelled on the First Amendment of the USA
Civitas - Think-tank report warns of dangers that campus relations at universities are becoming ‘racialised’ – as sector seeks to address disparities through ethnic grouping24/11/2020 12:35:00
“There is a real danger that campus relations at universities will become racialised”, says Dr Ruth Mieschbuehler, in this new report for Civitas.
Public sector pay freeze “appropriate” at this time, says IEA expert24/11/2020 11:35:00
Professor Len Shackleton, Editorial and Research Fellow at the free-market think tank the Institute of Economic Affairs, responded to reports that the Treasury will announce a public sector pay freeze in this week’s Spending Review
IFS - Minimum unit pricing works better if implemented alongside reformed alcohol taxes24/11/2020 10:35:00
The UK government has put out a call for evidence, seeking views on how well the alcohol duty system currently works and how it could be reformed. In new IFS research – funded by the European Research Council and the Economic and Social Research Council and published last week- we show that minimum unit prices for alcohol are reasonably well targeted at heavy drinkers, but come at the cost of hindering competition and reducing tax revenues. A minimum unit price, combined with a more coherent set of taxes on alcohol, would be just as well targeted at heavy drinkers and would limit the fall in revenue for the exchequer.
£164 billion stimulus needed to stave off permanently shrunken UK economy, IPPR warns Chancellor24/11/2020 09:35:00
The UK economy needs an ambitious cash injection of £164 billion in the year 2021-22, according to new analysis by IPPR, to restart it fully after the Covid crisis and set it on course for a fair, strong and green recovery.
IFS - Lack of job opportunities helps drive record rise in solo self-employment19/11/2020 11:40:00
Self-employment has risen dramatically in the UK. This rise has been entirely driven by ‘solo’ self-employment – sole traders and owner-managers with no employees. By the end of 2019, there were nearly 4 million solo self-employed workers, up from 2.3 million in 2000. The level and growth of solo self-employment in the UK are among the highest in OECD countries.
IPPR - Winter Covid debt warning: young people, ethnic minorities, and renters at most financial risk19/11/2020 10:35:00
Think tank reveals 10 per cent were behind on bills before pandemic hit and people expect a one in seven chance of falling behind on bills
IEA responds to the Prime Minister’s plan for a green industrial revolution19/11/2020 09:35:00
Mark Littlewood, Director General of the free-market think tank the Institute of Economic Affairs, responded to the government’s 10-point plan for a green industrial revolution
JRF - 2.5 million households worried about paying rent over winter, with 700,000 already in arrears and 350,000 at risk of eviction17/11/2020 10:35:00
Protections put in place at the start of the pandemic are not working for large numbers of renters. Renters on lower incomes are being hit hardest, and many are using up their limited savings, cutting back on essentials and borrowing money to stay afloat.