Scotland closes its ‘jobs gap’ as employment rate returns to pre-crisis high

Welcome news comes 15 months after England’s jobs growth recovered

Scotland today closed its ‘jobs gap’ as the employment rate surpassed its mid-2008 level for the first time to hit 74.9 per cent, the Resolution Foundation said today (Wednesday) in response to the latest ONS labour market statistics.

While welcome, the closure of Scotland’s ‘jobs gap’ comes 15 months after England returned to its pre-crisis employment rate. Scotland had been one of just three other parts of the UK still running a jobs gap, with Northern Ireland and the South East of England now the only parts remaining.

Despite performing less well on employment over the course of the downturn, Scotland has endured a shallower pay squeeze than England. Coming on top of stronger pre-crisis growth, this acted to lift typical pay in the country above the English level last year for the first time since records began. However, the Foundation warns that this new-found pay advantage is under threat unless Scotland builds on today’s impressive employment gains.

 It notes that the Scottish unemployment rate stands at 5.4 per cent, compared to just 5 per cent for England. This risks holding back pay growth in Scotland by limiting the ability of those in work to argue for higher wages. With Scotland’s strong pay performance pre-crisis being built on large employment gains, the Resolution Foundation argues that action to boost employment should be a key issue in the upcoming Holyrood election.

Conor D’Arcy, Policy Analyst at the Resolution Foundation, said:

“Scotland has reached an important milestone this morning, finally returning to the employment rate it experienced before the recession. However with this landmark event coming some 15 months after England closed its ‘jobs gap’, there is still work to be done.

“The challenge now is to convert today’s encouraging signs on employment into an sustained long-term trend. This will be essential if Scotland is to maintain its newly-acquired pay lead over England in the coming years.

“In order to get on the path towards full employment, it is crucial that the Scottish government works with employers to establish how to attract underrepresented groups and the economically inactive into the labour market. That’s particularly the case when those groups have significantly lower employment rates in Scotland than the rest of the UK, which is the case for people with disabilities and the lower skilled.”