News of 800 job losses at Honda’s Swindon factory are making the headlines — factory closures always do. They can leave scars that never quite heal, and for those affected it will be no comfort at all to know that there are today more people working in the UK economy than ever before. But it’s true.
As the below graph shows, the British economy is not actually shedding jobs at a particularly high rate. Even during the boom years, there were about 1,500 redundancies every day. What mattered was that the number of jobs created was greater. But there is an in-built new bias, because the jobs created tend to happen on a far smaller level and don’t make headlines. Factory closures do.
What matters is that, since the general election, jobs have been created at a faster rate than people have been laid off. The below graph tells the story:
So what’s happening at the moment? According to the latest figures, around 1,400 jobs are being lost every day, but 1,900 new ones are being created.
While there is plenty to be concerned about in today’s economy — the NIESR estimates there was no GDP growth last year — employment is holding up relatively well. The number of people in work has risen by half a million in the last year, and is now at a record high. That’s thanks to private sector job growth far out-stripping public sector cuts. (And while more people are working part-time, the total number of hours worked in Britain is as high as it was at the peak of the boom.) The recovery in employment has been really quite remarkable:-
And, as Jonathan has pointed out, more people left the UK for work last year than moved here for it. So yes, the economy is pretty stagnant. Yes, George Osborne is making dismal progress on the deficit. But for reasons that economists still can’t quite work out, the UK economy is still creating jobs at a faster rate than they are being shed. And that’s what matters.
UPDATE: Jaguar has today (Sunday) said it intends to create 800 more jobs at its Solihull factory to sate demand from China and Russia.
Subscribe to The Spectator today for a quality of argument not found in any other publication. Get more Spectator for less – just £12 for 12 issues.