Hamish McRae: Within the jobless data, some fascinating stories of change

Economic Life: Some people may have been forced to be self-employed, rather than choosing it

There is a big story told in the latest unemployment and employment statistics, and a number of smaller ones. The big story is that the modest fall in unemployment and the modest rise in hours worked suggest that the economy is still growing, albeit slowly. The rise in private-sector employment is just about keeping pace with the fall in public-sector employment, although many of the new jobs clearly are part-time rather than full-time.

Click HERE to view graphic

This is a mildly encouraging message, for it is consistent with what intuitively seems to be happening: despite Europe, despite the squeeze on real incomes, despite high oil and commodity prices, the economy is managing to grow. Were any of those headwinds to slacken, growth should pick up more pace. But it is only mildly encouraging for the country as a whole, and not really at all comforting for people still unable to find work. There is a long way to go.

But the detailed stories are interesting too, because they tell us a lot about the ways in which jobs are changing and will continue to change as the years go by. One of the most obvious is how employment is rising among immigrants and falling among Britons. It is not very helpful to go into the "are foreigners stealing our jobs?" debate because the phenomenon is much more complicated than the headlines suggest.

But the numbers are fascinating because it does not matter whether you take nationality or country of birth as your criterion, employment increased by between 160,000 and 210,000 for foreign workers over the past year, while it decreased by a similar amount for Britons (see graphic). Those are big numbers and they need to be examined in detail to see what is happening.

Another fascinating aspect is the shift from full-time workers to part-time, again something that needs a lot more work. We don't really have much of a handle as to the extent to which the shift is voluntary, or at least quite welcome, and to what extent it is forcing on people a harsh downshifting of hours, income and expectations. To know what is really happening you have to see what happens through the full cycle: as demand for labour recovers, will the proportion of part-time workers fall, or is this part of a permanent shift towards more flexible working? It is probably the latter, but let's wait for the evidence.

Another shift is the rise of people working beyond 65. Just under 9 per cent of all people in this age group are still working, so of course the proportion aged 65-70 still at work must be much higher still. The absolute number of workers aged 65 and over fell slightly in the last three-month period to 877,000, but that is still over 100,000 more than were at work in the same period in 2010. Again, we don't know to what extent this increase is voluntary and to what extent it is forced on people by inadequate pensions, but it must be a bit of both and it is a trend that will surely continue.

But the shift I find most interesting of all is the growth of self-employment. Two years ago there were 3,873,000 people listed as self-employed. Now it is 4,131,000, having risen steadily in every period. That is more than ever before in our history. As a proportion of the working population it is now past its previous peak, as the final graph shows.

Over the same period total public sector employment has come down from 6,323,000 to 5,942,000. There is of course some way to go but it is perfectly plausible that in another five years' time the two lines will cross over at about 5 million. I have been trying to pin this down but I think were that to happen – were more people to work for themselves than work for the government – this would be the first time since the Second World War.

That, if you think about it, would be remarkable. Now, you have to be careful drawing conclusions, because we don't know the reasons for this without a huge amount of digging. Some people may have been forced to become self-employed, rather than choosing it as a great liberation. The trend may be associated with the shift to non-British or foreign-born employment noted above. Some of the shift may simply be driven by tax and labour market regulation. But one thing is clear. A country with more self-employment than state jobs is different from the one we have been used to. It is potentially almost as radical as the shift from manufacturing to services.

Some will welcome this as a sign that we are moving towards a more self-reliant society, rather than a state-directed one. Others will take the opposite view. But it would certainly change things. Politics become different. Pensions have to be different. Workplace regulation becomes different. The tax system becomes different.

Policy towards employment becomes different too: if self-employment is rising steadily, even through this difficult period, what should the Government be doing to encourage its growth? If you want to try to revive a struggling region, should you try to bring in an outside employer, or should you encourage people to create their own jobs?

Actually you should do both, but schemes to help the self-employed to build their businesses do not offer ministers the same photo opportunities as cutting the ribbon on a new factory does.

So these microeconomic stories – as opposed to the macroeconomic story about the growth of the economy and the level of overall unemployment – seem to me to be in many ways more important. They tell us about how one key aspect of our society is changing, what people do for a living, rather than whether we are, as a community, some modest amount richer or poorer than we were three months earlier. But we should not lose sight of the macro story, and for once those unemployment numbers were a bit better than feared.

Suggested Topics
News
Clare Balding
peopleClare Balding on how women's football is shaking up sport
Arts and Entertainment
Carrie Hope Fletcher
booksFirst video bloggers conquered YouTube. Now they want us to buy their books
Arts and Entertainment
Damien Hirst
artCoalition's anti-culture policy and cuts in local authority spending to blame, says academic
Sport
premier leagueMatch report: Arsenal 1 Man United 2
PROMOTED VIDEO
Arts and Entertainment
A comedy show alumni who has gone on to be a big star, Jon Stewart
tvRival television sketch shows vie for influential alumni
Arts and Entertainment
Kirk Cameron is begging his Facebook fans to give him positive reviews
film
Life and Style
Small winemakers say the restriction makes it hard to sell overseas
food + drink
News
i100
Life and Style
fashionThe Christmas jumper is in fashion, but should you wear your religion on your sleeve?
News
ebooksNow available in paperback
Sport
Tony Bellew (left) and Nathan Cleverly clash at the Echo Arena in Liverpool
boxingLate surge sees Liverpudlian move into world title contention
Voices
Neil Findlay
voicesThe vilification of the potential Scottish Labour leader Neil Findlay shows how one-note politics is today, says DJ Taylor
Life and Style
food + drinkMeat-free recipes and food scandals help one growing sector
News
i100
Arts and Entertainment
Jason goes on a special mission for the queen
tvReview: Everyone loves a CGI Cyclops and the BBC's Saturday night charmer is getting epic
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Reach Volunteering: Trustee – PR& Marketing, Social Care, Commercial skills

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...

Reach Volunteering: Charity Treasurer

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...

SThree: Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...

Ampersand Consulting LLP: Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible
Look what's mushrooming now! Meat-free recipes and food scandals help one growing sector

Look what's mushrooming now!

Meat-free recipes and food scandals help one growing sector
Neil Findlay is more a pink shrimp than a red firebrand

More a pink shrimp than a red firebrand

The vilification of the potential Scottish Labour leader Neil Findlay shows how one-note politics is today, says DJ Taylor
Bill Granger recipes: Tenderstem broccoli omelette; Fried eggs with Mexican-style tomato and chilli sauce; Pan-fried cavolo nero with soft-boiled egg

Oeuf quake

Bill Granger's cracking egg recipes
Terry Venables: Wayne Rooney is roaring again and the world knows that England are back

Terry Venables column

Wayne Rooney is roaring again and the world knows that England are back
Michael Calvin: Abject leadership is allowing football’s age-old sores to fester

Abject leadership is allowing football’s age-old sores to fester

Those at the top are allowing the same issues to go unchallenged, says Michael Calvin