17 July 2015

Unemployment has risen for the first time in two years, casting the supposed momentum of the labour market recovery into doubt.

The Office for National Statstics (ONS) Labour market statistics show that the unemployment rate for March to May 2015 was 5.6%, down from 6.5% for a year earlier but slightly higher than for the 3 months to February 2015. Employment is down by 67,000 on the last quarter.

Rising unemployment is in part explained by savage austerity cuts to the public sector. There have been 22,000 public sector job cuts since December and 59,000 since May last year.

Compared with last month, full-time employees fell by 7,000, part-time employees fell by 21,000, the number of self-employed people working full-time fell by 47,000 and even the number of temporary employees fell by 9,000. The only type of employment that increased was the part-time self-employed, by 17,000; a concerning indication.

Although according to the ONS, wages are 3.2 percent higher this quarter than last. However the Resolution Foundation has pointed out that wages had fallen slightly in the last month, based on a measure of regular weekly pay adjusted for inflation. Wages remain a well less than their inflation-adjusted peak in 2004.

A strong recovery would show both pay and employment improving. The IER believes that the answer to a strong and fair economic recovery is through sectoral collective bargaining. For more about collective bargaining, the IER’s Reconstruction After the Crisis: A Manifesto for Collective Bargaining is available for purchase.