Work Foundation Views

Commenting on labour market statistics released on 16th September 2015, Ian Brinkley, Senior Economic Advisor at The Work Foundation said:

The welcome growth in employment of 42,000 comparing the three months to July with the previous three months is much weaker than it looks – almost all the increase is accounted for by part time self-employment which is often low skill and low income. Employee employment is not growing at all. The unemployment rate remained unchanged.

There is much better news for many of those already in jobs in the private sector – average earnings growth has strengthened, with regular pay (excluding bonuses) increasing by 3.4 per cent comparing the three months  to July with the same three months a year ago. With inflation close to zero, real wages for some are rising strongly.

Regular pay rises were especially strong in the low pay retail and hospitality sectors at 4.3 per cent,-perhaps because some employers are anticipating the National Living Wage announced in the recent Budget.

In contrast, public sector workers saw an increase of 1.3 per cent in regular pay comparing the three months to July with the same period a year ago. The growing gap between public and private sectors wage rises is likely to worsen recruitment and retention difficulties in some public services.