23 January 2015

Under-employment will not return to its pre-crisis levels until 2023, if it continues at its current rate of reduction, according to new analysis on the Labour Force Survey by the TUC.

There were 2.3 million people under-employed in late 2007. However, under-employment increased rapidly following the recession to reach 3.2 million in late 2010. Between 2010 and late 2013 it increased even further to nearly 3.4 million. Since late 2013, under-employment has been slowly falling and by late 2014 had reduced by 110,000 people to just over 3.2 million.

TUC General Secretary Frances O’Grady said; “Millions of people cannot get the full hours of work they want and all too often it means families end up stuck with poor living standards.”

“Under-employment is still much higher than it was before the recession, so we have a long way to go to create enough of the full-time jobs that people want and need.

“We already had too much under-employment before the recession, so we need to reduce it much faster. The government must address labour market failures that have left us with too many poor quality jobs, and not enough decent jobs with full-time hours. We need to make sure that people who want more work have the opportunity to do it.”

Under-employment, zero-hours contracts and agency workers throw a harsh light on the improving unemployment figures. While quantity of jobs may be on the rise, it is crucial that we look at the quality of those jobs and the quality of life they are affording those employed in them. For more information on zero-hours contracts Re-regulating Zero Hours Contracts is available now.

The latest Office for National Statistics (ONS) labour market figures show a continuation of falling unemployment. The number of people out of work declined by 58,000 in the three months to November, driving the unemployment rate down to 5.8%. However this is the smallest fall since July to September 2013.

Labour’s shadow work and pensions secretary Rachel Reeves pointed out that while “today’s fall in overall unemployment is welcome, but wages remain sluggish and working people are £1,600 a year worse off since 2010.”

TUC Head of Economics Nicola Smith said; “Households are still far worse off today than they were five years ago. There are now concerning signs that young people are being left behind, with long-term youth unemployment failing to improve. Far more must be done to ensure that young people are protected from the damaging effects of long periods out of work.

“With the IMF downgrading its UK growth forecast this week, it’s far from clear that this is a recovery built to last. We need stronger, sustained growth in wages and a far better balanced recovery to ensure that living standards are protected in the years ahead.”

Real wages have fallen for such an extended period that the majority of those in poverty are now also in work, and we have seen the longest decline in living standards for over a century. An economic recovery for the rich at the expense of the poor will not be a sustainable one. A wealth of evidence shows that Collective bargaining is essential to ensuring that a stronger, fairer and more sustainable economy is created for the future. To find out more about collective bargaining, the IER’s Reconstruction After the Crisis: A Manifesto for Collective Bargaining is available for purchase.

A new publication, Trade Unions and Economic Inequality by Lydia Hayes and Tonia Novitz is also available.