UK Employment Growth 2014 – Is this Good News for the Economy?
What has happened to UK employment in recent months?
According to the Office of National Statistics (as cited in BBC news article http://www.bbc.co.uk/news/business-26644758), at the start of the year, the number of people out of work in the UK fell by 62,000 to 2.33 million. Most of this can be accounted for by those finding jobs, but there was also an increase in the number of people becoming self-employed. For young people in particular, things are looking up – unemployment in 16-24 year olds is now at its lowest level since 2011.
How is this changing the UK economy?
It’s not just about more people being in work – the structure of the UK economy and its’ labour market is changing. There has been a large increase in start-up businesses and entrepreneurship – many of those no longer unemployed have actually started their own business – cottage industries and online businesses have grown in a way that has not been seen before in the UK. There are also more apprenticeship schemes and jobs with training for young people than we have seen for a long time.
Is this good news?
The increase in independent businesses and self-employment is great news for the British high street as well as for innovation and change in the way that the UK does business. After a dismal few years, our young people finally have a wide range of opportunities to get on the career ladder and university is now just one of many options for those leaving further education. As a result, our skills profile should see a huge benefit in terms of those entering the labour market. More people working, also means less money being spent on unemployment-related benefits, and more money raised in taxes.
However, it is worth noting that even though unemployment figures are down, a lot of that drop is accounted for by people looking for full-time work but ending up in part-time posts. Consequently, whilst hourly wages many have shown a slight increase recently, annual salaries have actually decreased leaving many people still struggling to make ends meet, ultimately affecting our housing market as mortgage deals remain out of reach. In addition, some apprenticeships pay far below the minimum wage and ‘zero-hours contracts’ are increasing in popularity.
So on the face of it, the picture seems positive, but as with all statistics, it does tend to hide those who make the figures look impressive but may actually be facing significant financial difficulty.