Olympics cast a golden glow on the labour market
15 Aug 2012
Jim Hillage, Director of Research at the Institute for Employment Studies, commented on today's jobs figures from the Office of National Statistics:
‘The Olympics appear to have cast a golden glow on the labour market, but it is not clear whether this will flow through the economy as a whole.
‘With 200,000 more people in work than a year ago, UK employment levels are returning to pre-recession levels and the labour market continues to outshine the rest of the economy. We have now had a steady few months of positive news on the jobs front, which runs counter to the negative stories on the economy as a whole.
- Employment is up by 201,000 in the quarter to June 2012. Most of the increase is in full-time permanent jobs, although part-time numbers are up 70,000 and the number of part-timers seeking full-time work is at record highs.
- The headline unemployment figure is down by 46,000 on the quarter to June 2012 and youth unemployment also fell slightly.
- There were also small positive changes in the indicators of demand from employers, with redundancies down and job vacancies up.
‘The impact of the Olympic halo can be seen by the fact that nearly half of the increase in employment has been in London and in the retail, transport and hospitality sectors. London accounts for nearly all the fall in unemployment.
‘While this is undoubtedly good news, the latest labour markets statistics do raise questions about why they seem so out of kilter with other recent economic data. Some indications as to why can be seen in the latest statistics:
- Wages are still rising well below prices, so real incomes are falling.
- Productivity is also falling, particularly in the service sector.
- So while more people are employed they are producing less per head and for less money.
‘It is therefore not clear whether these data herald better economic news to come and whether the Olympics can offer a lasting economic legacy.’
The Institute for Employment Studies is the UK's leading independent centre for research and evidence-based consultancy in employment, labour market and human resource policy and practice. It is apolitical and not-for-profit, its activities being funded through research and consultancy commissions, and from its corporate membership programme. The Institute aims to improve employment policy in the UK and internationally by carrying out authoritative research of practical relevance to policy makers and those responsible for implementing policy programmes and initiatives.