I have looked at the new employment data published by the Office for National Statistics this morning. This chart is based on that data, although I redrew it as I did not like the one that the ONS supplied:
The trends are worth noting.
The number of people in full-time employment has, without a doubt, risen. How many of these jobs actually relate to the pandemic is an interesting point to speculate upon. Whether they will survive the downturn in government spending that now appears to be going on is also unknown, but that there will be a significant increase in unemployment as a result of the reduction in Covid testing and vaccination seems to be certain.
As notable is the fact that part-time employment and, most especially self-employment, have declined.
According to the Office for National Statistics those in self-employment have opted for full-time employment where it has become available, which does imply that what Danny Blanchflower and I have always said, which is that a great deal of self-employment represents effective under or non-employment in practice with only marginal profits being earned is likely to be true. The decline in part-time employment is, however, at least as significant. It seems very likely that many older people have simply left the workforce.
Overall what is apparent is that at least 600,000 fewer people are engaged in economic activity now than was the case in December 2020. This is despite the fact that the government claims that UK GDP increased by 7.5% last year and is continually suggesting that we have the fastest recovery in the G-7. If so, then this is a decidedly skewed recovery that is benefiting everyone but those in work, where a significant number of people are now unemployed who might previously have sought to work for a living.
In that case, there is one obvious conclusion to be drawn from any growth that has occurred, which is that it is decidedly biased in its impact. Some have done well, but a significant number have not. What is more, with this rise in effective unemployment the likelihood that there will be any significant sustained pressure to deliver wage growth is limited. There are obvious skills shortages in some areas, but overall there is very likely to be a surplus of people looking for work meaning that most will not benefit from significant pay rises, as is suggested by recent data which shows them running at well below inflation.
The government likes to claim that it is overseeing economic success. If that is true it is only for a few, and not for the many.
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More or Less on Radio 4 took Johnson to task for his claims about employment in parliament last week’s episode. It was mentioned that some of the change from self-employment to becoming employees could be in part due to the IR35 situation. I actually met up with some old friends from school at the weekend and one of them mentioned he was previously self-employed but has now become an employee due to the changes in regulations.
Interesting
I had not seen or heard much evidence that it was really working
It’s anecdotal; almost all major oil & gas employers and recruitment/employment agencies for the UK sectorin, have blanket-banned the self-employed, due to IR35.
It’s expensive and time consuming to test each position. Therefore a one-size fits all, zero-hour PAYE contract approach suits the employers better.
You are entirely correct, from my experience, on your point that only marginal profits are being made by the remainder of the legitimate contractors/consultants.
Until 18 months ago I worked for the majority of the previous 10 years as a contract engineer in the aerospace industry. The only times I spent not working were those when I chose to take holidays. There were occasions when there weren’t as many opportunities as there were at others but all that meant was that one didn’t have the luxury of picking and choosing. I do still get the odd email but they are few and far between with many now inside IR35 which, if they are any distance from home (I live in north Cumbria so most of them are) is of no use as I cannot claim expenses such as b&b, evening meal, etc.
I heard that More or Less episode too. Apparently the PM has been telling statistical porkie pies to Parliament. Full Fact has written numerous times to the PM to ask him to correct his statements but with no reply. You can listen to the episode here:
https://www.bbc.co.uk/sounds/play/m0014rmb
What about the wider implementation of IR35 as a cause of people moving from self-employed to employed status?
Maybe
How many?
First, we need all the usual caveats about what GDP does and does not measure, and the difficulties of determining such a broad indicator with any accuracy.
But if you believe the OECD data – https://stats.oecd.org/Index.aspx?QueryId=77241 – then yes the UK’s GDP grew by 6.5% from 2020Q4 to 2021Q4 (101.3 to 107.8, with 2015 as the baseline). For what that is worth – remember, we had lockdowns and “tiers” in late 2021.
GDP fell by 6.4% in the previous year (108.3 in 2019Q4) so we are still behind where we started two years ago. If you decline by 10% and then grow by 10%, you are still behind where you started. Even the “record growth” does not compensate for a “record decline”.
We fell hard and bounced back hard. Even dead cats bounce.
Here is the time series of percentage changes (since the same quarter in the previous year) from 2020Q1 – -2.1, -21.2, -7.8, -6.4, -5.0, 24.6 (!), 7.0, 6.5.
Oh look: most of 2020 was terrible, and recent “growth” is just returning to roughly where we were before.
Or if you prefer, here are the changes from the previous quarter in the same period: -2.6, -19.4, 17.6, 1.5, -1.2, 5.6, 1.0, 1.0. Not difficult to see the impact of locking down in there.
Recent reports of growth in “employment” simply reflects more people paying income tax through PAYE. As you say, the numbers in productive economic activity (employed and self employer) are very much below where they started two years ago.
Thanks
Have you accounted for the change in size of the working age population?
I don’t think you can make any claims about effective unemployment until you have.
No
But if you can share the data I will
Overall what is apparent is that at least 600,000 fewer people are engaged in economic activity now than was the case in December 2020.”
This is one of those things where we can do a check sum. If this is happening here then that over there must also be happening. So, if 600k of the population are no now longer working then the portion of the workforce that is working should have changed.
Which it has. From 74.7% to 75.5%.. please check ONS stats
Ah, but that’s the population aged 16 to 64. So we’ve a smaller number of people working while we’ve a greater portion of the working age population working. So, the explanation is that the population is ageing out of working age… simple arithmetic Richard
Or that measures of population are wrong
And that the measure is wrong when retirement age is rising
Not nearly as simple as you imply
“Or that measures of population are wrong..And that the measure is wrong when retirement age is rising”
Well the data is from the ONS.. so you are saying the ONS have made errors in calculating the data?
I do, quite often make such suggestions
Why not, when they do make such mistakes?
I’ll reply in this thread as Steve has made the same point as me and provided the data.
ONS uses the working age population in it’s employment data. This is done specifically to make data comparable over time, removing any effect of changes in retirement age. Saying the population measure is wrong (because it contradicts your argument) doesn’t change the fact that by the same measure, more people are employed in nominal and percentage terms.
The fact that more people over the age of 65 are also employed:
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/timeseries/lfk6/lms
also does not help your argument.
Steve is correct in saying that working age population has shrunk by a significant number.
I would also question why you are trying to tell a story that simply isn’t true. The employment situation in the UK is very good, with low unemployment both historically and when compared to the rest of the world. There are also record (1.25m) job vacancies. This all despite the pandemic.
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/jobsandvacanciesintheuk/january2022
Instead you are trying to manufacture a story where unemployment is rising by selectively contorting the facts and statistics in a very dishonest manner. It is obvious you are heavily politically biased and have an agenda, but it makes for poor economics and worse propaganda.
OK, Danny Blanchflower happens to share my version of this story and is one of the most published labour economists in the world
Would you like to publish your credentials please? A full CV will do, otherwise your claim is simply ‘because the government says so’
Well, that is interesting if it is true. How many more people are retiring than joining the workforce, then?
For example, in March 2019 there were 12.647 million people claiming a state pension. By August 2022 that has reduced to 12.452 million. It has been drifting down since a peak near 13 million in 2014-15.
Data: https://www.gov.uk/government/collections/dwp-statistical-summaries
Bluntly, are more people dying that retiring?
And are there features at the other end, with people deciding to continue in education or training rather than starting full time work?
To pick a few random ages (not so random, actually: the age pyramid is a wavy sided sausage: here are some parameters of maxima and minima): in 2019 there were:
* 733,000 people aged 18
* 928,000 people aged 28
* 778,000 people aged 42
* 940,000 people aged 54
* 660,000 people aged 66
* 768,000 people aged 72
Data: https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationestimates/articles/overviewoftheukpopulation/january2021
So, what, more or less the whole of one age cohort suddenly left work without replacement?
I think we can say with confidence that much of this is guesswork
Much of what the ONS produces is, including significant parts of GDP, some elements of which are simple fabrications
I don’t understand the reference to working age population. The age at which people can get the state pension is currently 66. For huge numbers retiring before access to the state pension os not feasible. Surely, then the upper limit of the working age population should be 66 and should, indeed, change every time the retirement age is increased?
Agreed
“Tassi”. Here is my problem with your comment. My eyes immediately glaze over when the commenter begins with a ‘nom de plume’ clearly intended to disguise their identity, unless they are a whistleblower or are in some especially difficult situation, which is accepted by an editor I trust. If you are not prepared openly to stand behind your own opinion, why should I bother to read what you claim or give your opinion even a scintilla of credibility?
You may say that you could select a false name and nobody would know. True, it is part of the frailty of social media; but here is my judgment. I begin by offering my provisional trust in a commenter who arrives apparently openly; trust is essential in all social transactions, whether trivial or serious. It is the glue that binds us. If you then come here cynically lying about your identity to my face, then the corruption is all yours. Take your pick; but perhaps you now see my predicament.
Incidentally, I am slightly puzzled by the effort here to prove how many people are employed. It seems to me the whole argument is completely misplaced. The notional ‘full employment’ issue is grossly misleading as an economic indicator in a gig economy. It emphasises a superficial ‘headline’ employment rate, playing to a completely out-of-date set of economic priorities. Given Brexit we are at a working demographic turning-point, so the ground is changing under our feet.
More important, mere employment levels no longer establishes a reliable relationship with even a basic viable living standard standard in the gig economy and no longer provide data of real economc value; they now simply mislead. I consider headline emplyoment data to be merely a neoliberal PR stunt on the way to normalising a new age of ‘wage serfdom’, without the poor suckers realising they are being ‘had’. That is the end, it seems to me you are serving (gullibly or otherwise), and that would indeed fit with the desire for anonymity.
I may be wrong, but you may now see that anonymity doesn’t really help your case, at least with me.
Steve and Tassi are now banned
Their follow up comments proved them to be absolutely standard trolls spewing forth all the usual nonsense that Tim Worstall likes to put out about me
Your prerogative, and you know what I think of anonymity in social media, bar special cases.
I do, however wish to draw attention to my point about ‘Wage Serfdom’; because that is what the new gig economy is attempting to construct as the new economic model; a free market, low-pay labour force; please note ingeniously subsidised by the State, but only at a level that keeps the labour force perpetually on the edge of unemployment, loss of benefits, and deep in debt. The benefit costs are then used as prrof that the government and state cannot do anything more than subsidise the employer without taking on unaffordable debt. It is a self-reinforcing cycle of circular argument. Meanwhile the Conservative Agenda focuses on “full employment” as proof of the triumph of neoliberalism. That is my definition of modern Wage Serfdom.
To ask a sadder question of the sums, how many of the ~160,000 people who died of covid were working, and how many survivors with long covid aren’t up to going back to work?
In broad numbers, of the ones where ages are known, over 122,000 were in their 70s or older. Most of the rest – around 15,000 – were in their 60s. And around 10,000 under 60. That is 147,000.
Scaling up, perhaps 30,000 deaths under 60. So not negligible but also not a large fraction of the total. Not all of them would have been working.
Sorry, typo. Means to say “Scaling up, perhaps 30,000 deaths under 70.”
Just wondering, how many of those 600,000 number are EU citizens who chose to leave the UK since losing jobs in hospitality during lockdown?
Good question
Bloomberg reported that 200,000 EU citizens left the UK in 2020 alone; FT gave 147,000 for 2020, and ONS an extremely inadequate net loss range of 8,000 – 180,000: which is an illustration of basically just how clueless we are about UK migration stats. So much for Brexit; for this vagueness is precisely what I would expect from the neoliberal Conservatives, who do not know what they are doing, and rely on confusion to survive.
In any case I could not find a usable 2021 figure for EU net emigration from UK. I think we may surmise this will also be six figures; so Steve’s focus and assumptions on ‘UK population 16-64’ was at best doubtful. All this reminds me of nothing so much as GERS …..
Incidentally, credit to ‘Rob’ for spotting the EU migration gap. I just wish I could thank a full name (but I won’t go there; okay, I just did).
EU student numbers are also down since 2020, and many students typically work part time. Anecdotally (I work in the Higher Education Sector), the % of students in part-time work (including UK students) is way below pre-covid 2020 figures.
That’s my experience too
looking at the ONS reports:
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/employmentintheuk/latest
It seems that there were a large number of redundancies (285K) , presumably coinciding with the end of employment support/furlough.
And the biggest growth now is in inactive men.
The graph on productivity shows a definite fall in hours worked since Covid. It has bounced back but it cannot have yet fully in Airlines and Hospitality.