Unemployment falls with rise in part-time workers

Click to follow
The Independent Online

The part-time workforce reached record levels in the three months to May as people struggled to find permanent jobs in the recession, official figures showed today.

The figures showed a 148,000 quarterly rise in part-timers to 7.82 million, the highest level since Office for National Statistics (ONS) records began in 1992.

The ONS said that a record 27% of the total workforce was now in part-time employment, with the category accounting for the vast majority of the 160,000 rise in total employment - the biggest quarterly jump since August 2006.

At the same time the number of full-time employees fell by 22,000 over the month,to 18.2 million, the ONS said.

The figures overshadowed a 34,000 fall in unemployment to 2.47 million in the three months to May and a fifth successive fall in the claimant count, which was down by 20,800 to 1.46 million in June.

The ONS also said the number of people out of work for more than a year reached a 13-year high of 787,000 after a 61,000 rise in the three months to May.

The number of economically inactive workers - which hit record levels in the quarter to April - edged down by 0.2% to 8.1 million. This is the first fall in this category since March last year.

But those classing themselves as "long-term sick" reached 2.04 million, the highest level since March 2007.

With the headline unemployment rate remaining close to 2.5 million, worries over the impact of public sector cuts following Chancellor George Osborne's savage Budget will fuel fears of a "jobless recovery".

Leaked Treasury documents in the wake of the Budget predicted the loss of 600,000 public sector jobs over the next five years as the deficit-busting moves kick in.

But downward pressure on salaries was also shown by the sharp slowdown in average earnings growth, which fell from 4.1% to 2.7% in the quarter to May.

Workers are now worse off in real terms with the official rate of inflation, the Consumer Prices Index, remaining stubbornly over 3% so far in 2010.

Private sector pay growth was down from 4.4% to 2.8%, declining more sharply than a fall from 4.1% to 3.2% seen by public sector employees.

Vacancies in the three months to June rose by 10,000 to 486,000 - with the largest increases seen in retailing and motor repairs where there were 95,000 posts on offer.

Hetal Mehta, senior economic adviser to the Ernst & Young Item Club, said: "While employment was up and inactivity fell in the three months to May, there are still clear risks ahead as the public sector begins to shed jobs.

"It remains highly debatable whether the private sector is sufficiently strong to offset the drag from the public sector."

Owen James, an economist with the Centre for Economics and Business Research, said "under-employment and spare capacity remain ingrained in the system" - explaining sluggish earnings growth.

"Like the Office of Budget Responsibility, we see public sector employment falling by approximately 600,000 between 2012 and 2015.

"Some will find work in private sector firms, but uncertainty surrounds how much of the slack the private sector can pick up.

"Our view is that the private sector recovery will take place rather more slowly than the OBR predicts," he warned.

Employment Minister Chris Grayling said there was "still a huge amount of work to do" to revitalise the economy.

He added: "What concerns me in today's figures is that, while there are more jobs in the economy, there is too little evidence of them being taken up by the five million people who were stranded on out-of-work benefits under the previous government."

Unemployment in the regions between March and May was:

Region Total Change on Unemployment

Unemployed quarter rate

North East 121,000 plus 1,000 9.4%

North West 284,000 minus 5,000 8.3%

Yorkshire/Humber 245,000 minus 8,000 9.1%

East Midlands 165,000 minus 9,000 7.2%

West Midlands 230,000 minus 15,000 8.6%

East 196,000 minus 2,000 6.6%

London 382,000 plus 18,000 9.3%

South East 272,000 minus 12,000 6.2%

South West 168,000 minus 2,000 6.3%

Wales 131,000 no change 9.1%

Scotland 216,000 plus 8,000 8.1%

Northern Ireland 59,000 plus 6,000 7.0%