Labour market

In an ideal world all zero-hour contracts would be of the Augie March variety: they would represent the preference of an individual for freedom and flexibility. Instead, they are too often the unwanted consequence of a low wage, insecure labour market.

Data released Wednesday morning by the Office of National Statistics tell us more about zero-hours contracts, longstanding arrangements that have been more widely used and more widely discussed in the aftermath of the last recession. The data, as well as new research from the Resolution Foundation tell us more about how many people are employed under these arrangements – and, crucially, who they might be.  Read more

On Wednesday, the latest official employment data released by the Office for National Statistics showed a fall in the unemployment rate to 6.9 per cent and a rise in the growth rate of one measure of annual earnings. Strong stuff. Important stuff, too – and not only for the Bank of England and what’s left of its forward guidance policy. The relationship between wages and prices is politically important; the government has been keenly waiting for the day that pay outpaces inflation.

Is this the day? Not quite.

This is perhaps the most important chart from the ONS release. It shows the annual growth rates of CPI inflation (yellow line) and pay including (dark blue line) and excluding (light blue line) bonuses for the past five years. The latest pay data refer to the annualised growth over the three months from December to February. As you can see on the right hand side of this graph, for the first time in about four years, there is convergence: total pay (including bonuses) for employees was 1.7 per cent higher than a year earlier and CPI inflation in February was also 1.7 per cent.

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Statistics released on Wednesday by the Higher Education Funding Council for England show that the number of overseas students studying at English universities has declined for the first time in 30 years. The data should raise concerns about the openness of the UK to the rest of the world. It is hard to win a “global race” if fewer people want to start on your track.

The chart below shows the number of overseas full-time undergraduate students entering an English university each year since 2005-6. Students from the rest of the EU are represented by the red bars and non-EU (“international”) students by the blue bars. The figures between the bars show annual percentage growth. Read more

The nature of low pay has changed since the introduction of the minimum wage, 15 years ago. The chart below from the report shows that extreme low pay – earning less than half the median wage – has been nearly eradicated. But low pay – earning less than two-thirds of the median wage – is as prevalent as in the late-1990s.

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The RMT union leader died on Tuesday, three decades after the outbreak of the 1984 miners’ strike. Jim Pickard’s 2011 interview is the definitive article on Crow.

The chart below shows union membership levels in the UK since 1892.

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On Thursday, the government published its needlessly controversial report that reviews the impact of migration on the UK labour market.

In a post yesterday, I argued that the alleged worry about publishing the new document derives from how Home Secretary Theresa May used a January 2012 report from the independent Migration Advisory Committee. The MAC report was replete with caveats and qualifications, a necessary feature of empirical analysis about migration.

Thursday’s report supports the MAC findings – not the use of the findings but the findings themselves. Read more

The rise in demand for food banks is partly related to changes to the benefits system. One of these changes is the toughening of sanctions faced by people who fail to meet one of the conditions for receipt of Jobseeker’s Allowance (a benefit for the unemployed) or Employment and Support Allowance (a benefit for the inactive). Sanctions are a necessary part of any welfare-to-work system but as currently designed they are leading to unnecessary suffering in return for no obvious benefit.

In the year from September 2012 – October 2013, 874,850 sanctions were applied to JSA claimants, a 16 per cent increase from the previous year, and more than double from five years previously. This could have reflected rising numbers of JSA claimants after the recession. But on Monday, a report released by Policy Exchange, a centre-right think tank not renowned for its love of cushy welfare, suggests that a growing share of sanctions are also issued in error.

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“Welcome to the future of work, where your colleagues will be old enough to be your great-grandparents and your competitors will be algorithms.” That is the brilliant lede by Brian Groom in his article on The Future of Work, a paper published today by the UK Commission for Employment and Skills, a government-funded research body.

The report predicts the rise of a “4G workforce”, where new entrants work alongside people old enough to be their great-grandfathers. In the UK, about one-tenth of over-65s are currently working. Improvements in health, rising retirement ages and smaller pension pots mean that this share is likely to rise in the future.


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This is what can happen when a politician sets a target without thinking about whether it has the power to meet it, never mind whether it is a good idea:

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David Cameron, prime minister, has described his government’s “welfare” reforms as a “moral mission”. I support much of what the coalition is trying to do; for example, the effective marginal tax rate for people such as Natalie should come down under Universal Credit. (It could also have come down without a massive project but that is for another post.) Any government taking power in 2010 would have had to cut the social security budget.

But the government’s haughty self-righteousness is risible in the face of evidence of unnecessary suffering. The rhetoric around benefits and the millions who receive them is already toxic. We could do without the idea that pointing out problems is somehow treacherous. If you look at what the Christian leaders are saying, as this atheist has, they are careful to focus on the practical consequences of specific decisions. There was only one side talking the language of crusade last week and it was not the ones whose job it is to promote the idea of ascension. Read more