UK still 6 years away from pre-crash jobs level

8:30 am - June 15th 2011

by Newswire    

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It could take over five years for the UK to return to its pre-recession employment rate, and far longer in the north of England, according to new analysis out today.

The figure comes ahead of the latest labour market figures published later this morning.

The TUC analysis compared employment rates for working age adults across the UK in February 2008 – the beginning of the recession – with each year up to February 2011, using the rate of jobs growth over the last 12 months to estimate how long it will take each region to return to 2008 levels.

It finds that at the current rate of progress, it will take over five and a half years for the UK to return to its pre-recession level of 73 per cent, with the UK employment rate increasing by 0.5 percentage points over the last year.

However, there are huge disparities across the country.

While London is set to return to its pre-recession employment rate of 70.3 per cent within two and a half years, it could take the South East decades to return to its pre-recession level of 77.2 per cent.

Of even greater concern is that employment rates in the north of England have actually fallen over the last 12 months, suggesting it will take a very long time for their labour markets to fully recover.

The TUC analysis is in line with forecasts by the Office for Budget Responsibility, who forecast the employment rate for all workers aged 16 and over to be 58.5 per cent in early 2016 – nearly 1.8 percentage points lower than the employment rate (for adults aged 16 and over) at the start of 2008 (60.3 per cent).

From a press release

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Reader comments

Interesting to see some actual research into the subject, unlike the so-called Taxpayers’ Alliance, who yesterday trumpeted “Strong Employment Growth” on the back of one agency survey:

Even more gobsmacking were Staines and Cole blogging “Unemployment Has Peaked” on the basis of the same survey. I’ve got the URL ready to bring that one out later.

The one problem being is that using the trend from the past 12 months isn’t much good at all. In fact, it’s pretty useless. All it’s doing is taking a line and extending it.

Now, if the economy remains stagnant then that trend is probably accurate. However, if the economy dips then it’ll take longer than 5 years. If the economy continues to get better then the employment rate will increase and it’ll take less than five years.

A useful study would look at various scenarios and then produce an estimate for return to 2008 levels for each scenario. The average of these scenarios (including factoring in the likelihood of these scenarios) would be a useful figure to have.

All this report is, based upon the press release, is a waste of paper, time and pixels.

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