UK Edition
The UK’s Covid-blighted economy was struck with record redundancies in the quarter to October while the headline jobless rate also rose to 4.9pc. But a closer look at the UK’s pandemic labour market reveals winners and losers - as well as worrying signs of further pain to come.
Women vs men
One striking aspect of the figures was the rising number of full-time female workers, despite a 144,000 fall in employment overall during the quarter. Economic inactivity for women fell to a record low 24.4pc.
Tony Wilson, director of the Institute for Employment Studies, says: “You tend to see second earners entering the market in recessions. Second, women are over-represented in pandemic sectors like health and care and may be increasing hours. If you can’t employ quickly enough, it is probably easier to increase their hours.”
Even before Covid struck, more women were entering the workforce due to rises in the state pension age.
Pressure falls on the self-employed
Part of the reason for the gender imbalance in the jobs figures is that there are almost twice as many self-employed men as women - and it is the flexible workers who have borne the brunt of the crisis.
The detailed figures showed the number of self-employed people down 183,000 to 4.5m overall over the quarter, with a record 97,000 decrease for those part-time self-employed workers.
This is all the more reason for the Chancellor not to come after them with tax rises, according to the Institute for Economic Affairs.
Research fellow Len Shackleton says: “Self-employment is for many a risky and often lonely business. Those undertaking it should not be singled out for higher taxes as a payback for government help.”
Vacancies tailing off
Vacancy levels had been gradually recovering, although they remain almost a third below pre-pandemic levels.
Smaller firms have been much more likely to hire than the UK’s biggest companies with vacancies just 6pc below last year.
But the recent modest recovery has tailed off due to the second lockdown, shown by the ONS’s single month figures. Vacancies dropped 10pc to 557,000 in a single month compared to October, echoing the more recent surveys carried out by the Recruitment and Employment Confederation.
Ben Nabarro, UK economist at Citi, says the jobs market is “heavily depressed”, adding: “Vacancy levels remain weakest in the hospitality, recreation and retail sectors.”
People away from the workforce but still 'employed'
One startling aspect of the pandemic jobs market is the low level of headline unemployment compared with the numbers “away” from the workforce due to job-saving devices such as the Government's furlough scheme.
At the height of the pandemic in late April almost 9m people were away from work as the use of the furlough scheme peaked. The number remains at 3.7m, about 50pc higher than its pre-pandemic average.
Even more concerningly, more than 200,000 “employed” people described themselves as temporarily away from the workplace while getting no wages at all.
More than a third - 1.3m - of the 3.7m have been away from work for more than three months. If they were counted as unemployed the jobless rate would be above 8pc.
Wages 'rise' due to effects of the furlough
A sharp rise in annual pay growth to 2.7pc in the quarter to October - almost twice as high as the 1.4pc increase in the previous data - caught many economists by surprise. Yet the increase does not signal some unlikely rise in the bargaining power of workers, or indeed generosity from employers.
Instead it reflects the effect of workers coming back off furlough and receiving their full pay rather than 70pc or 80pc, as well as the impact of the pandemic on lower-paid workers, such as those in hospitality.
Average earnings figures are exactly that - total wages divided by workers - so the average is boosted if they drop out.
Allan Monks, UK economist at JP Morgan, said: “A compositional change resulting from fewer lower-paid jobs is now acting to inflate measures of average pay growth.”