Labour Market Statistics, April 2021
Today’s figures tell a similar story to recent months, with both employment and unemployment broadly flat and very little sign of any significant deterioration from the third lockdown. It looks even more likely than last month that unemployment may have peaked (for now) at around 5% and we should start to see a stronger recovery in employment in the months ahead.
However, today’s figures are again very poor for young people: with PAYE employment now down by 12.0% since the start of the crisis compared with 1.4% for other age groups, and PAYE employment falling again in recent months for young people even as it rises for others. The full extent of these impacts has been masked to some extent by still-rising participation in education, which is now at its highest ever rate; but we are seeing significant increases now in long-term youth unemployment (defined as those unemployed for more than six months) which has now reached its highest in five years.
This youth employment crisis is being driven in particular by continued subdued hiring, with February PAYE job starts 24% below pre-crisis levels and March starts 10% below (and subject to further downward revision next month). And while we can expect to see some improvement on this with the reopening of hospitality and retail in April, many of the factors that have held hiring back over the last year may continue to do so in the coming year too – with spare capacity within companies, continued economic uncertainty and a number of struggling firms.
Data on employment by sub-region and by sector shows a similar trend to recent months, with PAYE employment in London continuing to fall even as it has started to recover elsewhere; and recent employment growth being driven by administrative and support services (likely including Test and Trace call centres and by contracted-out packaging and distribution) and in health.
Looking beyond employee jobs, self-employment continues to plumb new depths – with the proportion of those in work who are self-employed falling to its lowest since late 2009 (at 13.3%). We will get a clearer idea next month as to the extent to which this is explained by self-employed people leaving work or becoming employees.
Finally, there is positive news today on redundancies – with the latest data suggesting that these may now fall back to pre-crisis levels – and some signs that the recent growth in involuntary part-time and temporary work may have stalled for now.
As with last month, we think that there is a pressing need now to mobilise the £7 billion announced last year to support re-employment (through Kickstart, Restart and Jobcentre Plus services), and to target this help at those becoming long-term unemployed and otherwise disadvantaged in the labour market. In our view, this should include a meaningful jobs and training guarantee for long-term unemployed people and the extension of Kickstart beyond the end of this year.