Employment figures increase by record-breaking 350,000 in three months, but earnings are down

The wage growth rate slowed to 0.7 per cent (Getty Images)

The number of people in work has leapt by a record 350,000 in the three months to April, but wages have slumped below inflation which has sparked concerns over levels of pay.

While the Government celebrated the new jobs, there was evidence this was an austerity recovery. The Office for National Statistics recorded a decrease in the rate of earnings growth – meaning that in real terms wages are down.

The wage growth rate slowed to 0.7 per cent from 1.9 per cent the previous month, bringing it behind inflation, which is currently at 1.8 per cent.

The TUC’s general secretary, Frances O’Grady, said: “It’s great that more people are joining the workforce but hugely worrying that workers are still not getting the decent pay rises they need to get by.”

The rise in employment means there are now 30.5 million people in work, and represents the biggest increase since records began in 1971.

Esther McVey, the minister for employment, said: “As we build a stronger economy, businesses up and down the country are feeling increasingly confident about creating jobs, meaning many thousands more people are in work every day – ensuring a better future for them, their families, and for the country as a whole.

“Helping young people to get a job is vital to securing our economic future, so it’s welcome that youth unemployment has continued to fall.”

The figures show the make-up of the workplace is changing, with a significant fall in public-sector jobs in the last quarter, taking them to their lowest level since the figures were first collected in 1999.

In total, public-sector employment fell by 103,000 in the last quarter to 5.4 million. The loss of public-sector jobs was partly attributed to Lloyds staff being reclassified as private-sector employees. However, 27,000 of the jobs lost were in local government.

Unison’s general secretary, Dave Prentis, said: “Today’s employment figures once again paint a sorry story for public-sector workers and all who rely on local services.”

The shadow Work and Pensions Secretary, Rachel Reeves, said: “While this fall in overall unemployment is welcome, working people are over £1,600 a year worse off than when David Cameron came to office and pay has fallen behind inflation.

“Thousands of people who work hard are struggling to make ends meet because of the Government’s failure to make work pay. That’s led to a staggering 60 per cent increase in the number of working people claiming housing benefit because they can’t afford their rent, costing taxpayers an estimated £4.8bn.”