In its latest report, Sizing the UK ‘Jobs Gap’, the independent think-tank The Resolution Foundation takes a close look at the UK labour market and how it has changed in the period since 2008. Using the employment rate as its focal point, the report explains why the road to economic recovery is set to be a long and difficult one and, in doing so, illustrates just how complex the issue of finding sustainable employment has become.
Probably the most important aspect of the report is the analysis of the current high employment rate, which has confounded economists and other interested onlookers. The Resolution Foundation report places the current high employment rate in the context of the increased population in the UK – while there are now 160,000 more people in employment than there were at the start of 2008, the population of the UK aged 16 and over has grown by 1.7 million. This means that the current employment rate is only high in terms of its total number – the more meaningful figure of the percentage of the UK population in employment has actually fallen from 60.3 per cent in 2008 to 58.7 per cent today.
The report also looks at how the employment figures are constructed, noting the increase in part-time and self-employed work since 2008, and uses the projections by the Office for Budget Responsibility as the basis for its calculation that the ‘Jobs Gap’ between the 2008 and 2013 employment rates is now 850,000. That is, it would require that number of new jobs to be created to bring employment as a percentage of the population back up to its pre-recession level.
What is of more concern is that these same projections show that the jobs gap will continue to widen, rather than be reduced, during the next few years. History is not on our side, with previous recoveries showing us that the recent growth in employment will not be maintained – only the late 80s saw comparable jobs growth but that was short-lived.
This ‘Jobs Gap’ will affect people across the population (the report provides a good insight into the issues of our ageing population) but given that the last set of figures from the Office for National Statistics showed a rise in youth unemployment, it is likely that those aged 16-24 will struggle more than most to find sustainable employment.