Archive for November 2012

Is underemployment the new normal?

Giselle Cory

This post originally appeared on the Huffington Post

Today’s ONS release confirms the scale of the rise in underemployment. More than one in ten workers are now underemployed, working fewer hours than they would like to – a million more than in 2008. Recently, this increase has run hand in hand with a flat-lining of overall unemployment, as the chart below shows. In this downturn, more than others before it, pressure on employers is feeding through more into reduced hours than reduced overall numbers of staff.

Matthew Whittaker

Today’s important JRF report on poverty and social exclusion highlights the changing nature of poverty in recent years, finding that more than half of those children and working‑age adults who are reported to be in poverty live in a working household. This trend pre-dates the recession and, as our work has shown, is particularly concentrated among families in which just one parent in a couple works.

Alex Hurrell

The ONS 2012 Annual Survey of Hours and Earnings release that came out this morning highlights that median real wages have fallen between 2010-11 and 2011-12. Median gross annual earnings for full-time employees were £26,500 for the tax year ending 5 April 2012, an increase of 1.4 percent from the previous year. But over the same period prices rose 4.8 percent according to the ONS’s Retail Price Index (RPI) measure. That implies that the earnings of a typical employee have actually fallen 3.2 percent in real terms. In fact, after accounting for inflation the median wage for full-time employees is now lower than it was in 1999-2000 (£26,900).

Giselle Cory

A glance at the labour market statistics will tell you that there’s a lot of involuntary underemployment. The number of people in this position –working few hours or in lower-skilled jobs for lack of finding something more suitable – is worryingly high and has been for some time. At the start of 2008, 1 million people were working in part-time or temporary jobs because they couldn’t find full-time or permanent work. This figure now stands at over 2 million. Thankfully this growth has now slowed. However many people remain trapped in underemployment.

There has been a question about where this underemployment has come from in the labour market. Over the last few years, we have seen a rise in part-time and temporary jobs. But as the chart below shows, this growth has occurred across the labour market.

James Plunkett

This post originally appeared on the Huffington Post

The coalition recognised long ago it has a major problem with women. This morning's speech from the deputy prime pinister was one of the first major attempts to address this challenge through policy. The speech, drawing heavily on the Resolution Foundation report The Missing Million, looked at how to raise female employment through smarter support for families. To Nick Clegg's credit, it's not an easy time to be making these arguments. But despite sensible moves to give parents more flexibility, the coalition still has a long way to go to prioritise women's work.

In the DPM's favour, the speech contained two promising moves on flexibility. First, the right to request flexible working will be extended to all employees, having previously been reserved for parents of dependent children and some carers. This follows through on a previous promise and is good news, encouraging flexible work to become the norm, rather than a flag that marks out people with caring responsibilities.

Matthew Whittaker

Look away from events in the US for a moment and you’ll find an interesting new release from the ONS highlighting trends in UK wage growth over the past 25 years. The headline points to average post-inflation hourly wage increases of 62 per cent since 1986, which looks fairly impressive and goes to the heart of our expectation that wages in the modern economy should be growing year after year.

The authors break the overall trend into a range of periods, centred around the recessions of the early-1990s and late-2000s. This enables them to show that wages behaved very differently during the most recent downturn: falling in real terms rather than merely slowing down as they did between 1989 and 1993. It’s a phenomenon we’ve looked at before and appears to owe much to a shift in the relationship between unemployment and real wage growth that took place over the last decade.

Matthew Pennycook

This post originally appeared on the New Statesman blog

Tomorrow marks the start of the first Living Wage week. It is tangible proof that, 11 years after a small broad-based East London community alliance revived an idea first forged in the industrial heartlands of 1870s Britain, momentum for increased living wage coverage continues to gather pace.

Alex Hurrell

The final report of the Commission on Living Standards, a broad group of leading employers, trade unionists, economists and heads of parents’ groups brought together by the independent think-tank the Resolution Foundation, was launched on Wednesday.

A key recommendation put forward in the report was to extend the Early Years Entitlement (EYE) of 15 free hours of childcare for all three and four year olds to 25 hours a week, and from 38 to 47 weeks per year. Hours 16 to 25 would be charged for, but at a nominal rate of just £1 per hour. This would mean 25 hours of childcare would cost just £10 a week. This change would make it easier for second earners in couple households, predominantly mothers, to take up a part-time employment.