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Employment returns to pre-crash levels

12 September 2012

2:30 PM

12 September 2012

2:30 PM

Employment has almost entirely recovered to its pre-recession peak, according to today’s new figures. Total employment for May to July stood at 29.56 million — up 236,000 on the previous three months and just 12,000 shy of the 29.57 million peak of April 2008.

This recovery is thanks to the expansion of the private sector, which has added over a million new jobs in the last two years, and now employs 381,000 more people than it did before the crash. Public sector employment, meanwhile, has been cut by 628,000 since the coalition took over, and is now at its lowest level since 2001.

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The scale of private jobs growth — and public job cuts — in the last quarter is exaggerated by the reclassification of 196,000 further education employees from the public sector to the private sector. Stripping this effect out, though, doesn’t make much difference to the big picture: private sector employment would still be at a record high (with 874,000 jobs added since the election) and public sector employment would be down to 2002 levels (and down 432,000 since the election)

But while overall employment is back to the happy days of early 2008, the detail is a bit less rosy. 628,000 more people are working part-time than were back then — meaning that there are 640,000 fewer full-time workers. This helps explain why the total number of hours worked in the UK each week is down by 1.1 per cent on pre-recession levels, and why GDP still hasn’t even nearly recovered yet.

There are also almost a million more unemployed than there were in April 2008, partly because the working age population has increased by 633,000 and partly because a large part of the recovery is accounted for by a rise in pension-age people in work. There are now 267,000 more over 65s in employment than there were before the recession hit, an increase of 39 per cent.

It’s also worth noting, as Citi’s Michael Saunders has, that while average pay has been rising in nominal terms, it has not kept pace with inflation — so earnings have fallen in real terms, by a full 6 per cent since April 2008.

This leads Saunders to caution that:

‘In our view, the resilience of employment is not a sign of hidden economic strength: in aggregate, people are pricing themselves into work through weakness in pay and the shift to less secure and less well paid forms of work (self- employment, part-time work, temporary jobs).’

A reminder that, while the employment recovery is good news, we shouldn’t get over-excited about it.

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Show comments
  • http://twitter.com/dangroveruk Dan Grover

    I don’t necessarily see our not reaching the 2008 levels of full employment as a problem, or unexpected. As Fraser regularly (correctly) points out to us, recessions aren’t the problem, they’re the solution. Recessions occur when something has an incorrect price – it happened with housing prices being too high, it happened with dot-com companies shares being too high, and this time it happened with faith in debt being too high. The recession is a re-calibration of the financial reality.

    So I think we need to be more concerned with the actual rate of job growth and the totals, rather than how it compares to 2008. The numbers we had in 2008 were, whilst good, strawmen – they were based on dodgy numbers, which is precisely why the recession occured.

  • ROB SHEFFIELD

    Yep- its amazing what contracting out functions (another way of saying reclassifying public sector jobs as private sector jobs) can achieve!

  • DGStuart

    I’ve been unemployed since the beginning of the year and haven’t signed on so am not on the official figures. I’m guessing there are at least 6 figure number of others in my position. Is there data on that?

  • TomTom

    Fantastic so I won’t see quite so many men wandering around supermarkets during the day and tax revenues will soar. The deficit should be eradicated by 2013 at this rate and Britain will again be the Workshop of the World. Can you send this message out in Greek and Spanish so their buses can bring extra labour to meet the impending labour shortage ? The economy will be overheating shortly and then interest rates will have to climb

  • james102

    We need the figures for total workforce as immigration keeps
    increasing. The third, but unwritten part of your explanation for unemployment
    increasing by a million since 2008. Also productivity rather than jobs is the
    key as can be seen by comparing Germany and the PIIGs.

  • ArenaceousFish21
  • Archimedes

    Didn’t the ONS recently publish statistics claiming that public sector employees were, on average, paid about 8% more than private sector employees? So won’t the reduction in average incomes partially be influenced by a reduction in public sector employees, and an increase in private sector employees? So, even if real wages are falling, productivity in the real economy, beyond those people that just create forms for us poor peasants to labour over, could be increasing and consequently purchasing power could be increasing.

  • anyfool

    A reminder that, while the employment recovery is good news, we shouldn’t get over-excited about it.
    Why not, would it not suit you to give a little bit of credit to Osborne.
    The reason why full unemployment is not down to pre 2008 levels is the amount of immigration, repatriate all illegals all problems solved, isn’t life simple.

    • telemachus

      Try this and you reduce the talent pool of productive souls.
      Ask the CBI
      It is fundamental folly to scapegoat immigrants
      England has always on dynamic interaction with other ideas and other cultures.
      And long may it be so

      • TomTom

        England has always on dynamic interaction with other ideas and other
        culturesThat’s why we had an Empire – we could interact and they didn’t need to come here. Should never have given up the empire eh Telemachus ?

        • telemachus

          As you rightly point out we abused many of the folk as subjugated.
          But happily they have forgiven us and come back to help

          • james102

            Your use of “folk” and the construction:”…the folk as subjugated…”–what is your first language?
            Although the British Empire extended across the globe, introducing the rule of law to its colonies it did not extend to Latvia,Poland,Brazil and the other countries our current immigrants come from so they are not “com(ing) back”
            I’m surprised a socialist like you supports the CBI’s position on cheap imported labour. Do you see us all as merely bipedal work units as our political class and the CBI does?

            • telemachus

              My first language is yorkshire
              When I was there we celebrated mix and ideas from wherever they came
              Hence the success
              Just look at the Olympic mix

              • james102

                Bradford is held up as an example of a multicultural success story, so do you speak Yorkshire and a Pakistani language?

      • anyfool

        Tell me why we need Chinese workers in multiple thousands.
        Tell me what subsistence farmers from the sub continent bring to the table.
        Tell me what African peasants contribute to the economy.
        Tell me what East Europeans can do that native Brits cannot remembering your heros Blair/Brown supposedly increased the school standards every year of their tenure.

        • http://twitter.com/dangroveruk Dan Grover

          They can work for a rate that businesses prefer, clearly. You have to *really* be lacking in skills, or otherwise have higher wage expectations, if an African peasant with little English skill can get a job over you.

          • anyfool

            Are you deliberately misrepresenting the post or are you a product of the Labour years education policy.

      • anyfool

        Tell me why we need Chinese workers in multiple thousands.
        Tell me what subsistence farmers from the sub continent bring to the table.
        Tell me what African peasants contribute to the economy.
        Tell me what East Europeans can do that native Brits cannot remembering your heros Blair/Brown supposedly increased the school standards every year of their tenure.

    • George_Arseborne

      Anyfool, you are really a dummy. If these illegal immigrants are known by the government and are the main cause of this recession ( Not Collapse of Sub-prime caused by the Bankers) why are they still in this country?

      Did illegal immigrants cause the world economic crisis in 2008?

      You are just a clown like George Osborne who had just borrowed his way into recession. He does not deserve an aorta of praise as yo recommended.

      The Olympic booing sufficed for him.

      And next time try to be reasonable before making useless comments

      • anyfool

        Where did i say immigrants caused banking crisis, check on government data on illegals, Brown borrowed most of our current debts, Osborne is borrowing to to cover for Browns folly, too many public sector workers with unaffordable pension commitments and benefits for all, legal or not.
        Typical lefty blame someone for something they did not write just to suit the dross in your closed mind.
        Do you really think the majority of people support immigration illegal or not.

      • SirMortimerPosh

        People like you with your banker obsession fail to register the vast indebtedness of the British general public, and the credit fueled boom encouraged by Brown and Balls. During the period from 2003 right up to the bust, vast sums were being borrowed both by government AND ordinary people. Our supposed standard of living pre the bust, was just a credit splurge. Suddenly, all that dried up when it became obvious that a stack of people, basing their borrowing on fantasy house prices (re-mortgaging) could never cover what they had obtained and spent on holidays, cars, house extensions and conservatories. They still have those debts and their property is not worth what they thought. THAT IS WHY WE HAVE A RECESSION. The entire loss to the government of RBS and Northern Rock is only about what they paid in tax every two years. It is a fraction of even our current year government spending. The recession is only a re-calibration. 2008 spending and GDP was a fantasy of credit spending. What we have now is the realistic size of the UK economy.

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