Low Pay Is Fast Becoming a Defining Challenge of Our Age
James Plunkett
This post originally appeared on the Huffington Post
You can tell a lot about a downturn by the image that comes to define it. From queues outside job centres in the 1970s and early 1980s to the poll tax riots that preceded the early 1990s recession, the pictures that stick in the mind have a habit of reflecting the key economic and political challenge of the time. So what will be the iconic image this time around? Images of last summers' riots will undoubtedly endure. But the more representative picture of the squeeze so far would be much less dramatic: a low paid, part-time worker, struggling in to work each day, bringing home a wage that barely pays the bills.
Today's new figures from the ONS confirm what's been suspected for some time: low pay is fast becoming one of the defining economic challenges of our age.
The impact of unemployment reaches beyond the out-of-work
Matthew Whittaker
It’s a fairly obvious point that pay rises are connected to unemployment levels: the more people there are ready to step into work, the less scope employees have to push for higher wages. Of course the connection is not quite so straightforward in practice, and pay trends are affected by many more factors than unemployment alone. But data drawn over time and across countries points to a clear relationship.
Perhaps unsurprisingly, the impact is more marked at the lower end of the earnings distribution than in the top half. This reflects the fact that the unemployed are more often drawn from the less skilled, meaning that they are closer substitutes for lower paid workers.
Looking under the lid of employment figures
Giselle Cory
Employment has gone up and unemployment has gone down. This is good news. But it should not be taken at face value. A closer look at today’s data shows an increase in the number of people involuntarily working in part-time or temporary jobs. As the chart below shows, there has been a sustained rise in the number of people who are in temporary work because they could not find a permanent job. Around 650,000 people are in this position, up from around 400,000 in the mid-2000s.
Beneath the unemployment stats, our jobs market is changing
Giselle Cory
Unemployment is up. That’s the latest from the Office of National Statistics. Their stats released this morning show 48,000 people fell out of work in the last quarter, with the unemployment rate rising to 8.4 percent. For ministers looking for a positive spin, the good news is that employment’s also up, and there has been a slight decrease in economic inactivity.
Yet these headline measures mask significant changes in working patterns. The number of people working part-time or on a temporary basis has risen, while the number of full-timers has dropped. Self-employment, though it has fallen very slightly, has been creeping year-on-year much beyond expected trends. It is now near its highest levels since records began.
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