UK unemployment has fallen by 97,000 in the last quarter of 2014. Unemployment now stands at 5.7% for the working population in the UK; the employment rate for those between 16 and 64 now stands at 73.2%- the highest rate since December 2004 to February 2005. Coupled with annual wages going up by 1.8%, and with inflation still at a low 0.5%, are there reasonable and hopeful grounds to claim that we are experiencing an economic recovery?
Chris Williamson of Markit certainly thinks so, arguing that ‘the data bodes well for a revival of consumer spending and household well-being in coming months’. A wider background of falling global oil prices means that consumers do not need to spend as much on fuel, creating more opportunities to spend on actual goods. This has certainly created a form of confidence in our economy.
It should be no surprise, then, that Danny Alexander, chief secretary to the Treasury, has rather buoyantly claimed that ‘We’re continuing to buck the European trend with strong growth and record job creation’. Labour’s shadow work and pension’s secretary, Rachel Reeves, had little to say, instead rather weakly arguing that ‘working people are still £1,600 worse off since 2010’.
A wider background of falling global oil prices means that consumers do not need to spend as much on fuel, creating more opportunities to spend on actual goods
Though we should pause and smile, these recent figures do obscure some worrying trends in our economy. The rate of youth unemployment was unchanged, at 16.2%. Additionally, average public sector pay rose at only 0.6%; compared to a higher rate of 2.1% in the private sector. More importantly, questions about zero-hour contracts and the murky culture surrounding job centres remain to be asked.
We simply do not have figures for those who are on zero-hour contracts. Some argue that the phenomenon is so widespread that it is impossible to trace the true reality of its nature. No major study has yet proven whether zero-hour contracts are wholly damaging to our economy. They are known to be quite useful for part time employment, typically taken up by students. However, it does beg the question whether the fall in unemployment actually only reflects an increase in uptake of zero-hour contracts, meaning more and more workers are struggling to find coherent, instead of random, hours of work.
If this is the case, it would not chime well with a truly healthy economy, or with a job market that truly cares for the workers within it. This comes on the back of several disturbing reports of bullying benefit claimants by jobcentre bosses. A former jobcentre official, John Longden, has claimed that frontline staff were commanded to ‘agitate and inconvenience’ claimants; so that they would be struck off the claimant list. Subsequently, this would potentially put them off the unemployment list, causing a fall in the unemployment figures which did not at all correspond with an increase in wellbeing.
A former jobcentre official, John Longden, has claimed that frontline staff were commanded to ‘agitate and inconvenience’ claimants; so that they would be struck off the claimant list
The Commons Work and Pensions Committee will be meeting soon to investigate these allegations. The demonisation on those on benefits, with less focus on trying to help finding employment and tackling those who have been out of work in the long term, is something that needs to be addressed.
However, we should not be in utter despair just yet. Our economy appears to have bounced back. Time will only tell, though, whether this is just yet another brief period of rejuvenation in the never ending cycle of boom and bust, or a more sustained recovery, leading to a true increase in the fortunes of Britain’s people.
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