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June 2019
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Young people turning to study to avoid the dole

-The latest unemployment figures are good news on the face of things, but only on the face of things. Taken in the round, the latest figures show that the UK jobs market remains in a far from healthy state and it would be wrong to conclude that unemployment has peaked.

-The number of people in work fell slightly in the three months to November 2009, another sharp drop (-113,000) in people working full-time not quite being fully offset by another rise in part-time employment (+99,000). The number of people working part-time is now at a record 1.03 million, as they are unable to find a full-time job.

-The reason for the fall in unemployment in the quarter is a jump of 81,000 in the number of economically inactive students – indicating that ever larger numbers of young people are turning to study to avoid the dole. This is desirable as an alternative to unemployment although it remains to be seen whether education or training is merely a stop-gap choice for thousands more young people rather than providing a genuine boost to their subsequent job prospects.

-A worrying feature of the latest figures is an indication that job prospects for the over-50s may have started to deteriorate for the first time since the start of the recession in 2008. The over-50s not only suffered a quarterly fall in employment but were also the only age group to register a rise in unemployment (up by 15,000).

-Men continue to fare less well than women in terms of employment, women benefiting more from the rise in part-time jobs. However, more women entered the labour market in search of work in the three months to November while more men exited the market, with the result that female unemployment increased and male unemployment decreased. There are now more than 1 million jobless men outside the labour market – and thus not counted as unemployed – who say they want a job.

-Finally, the ONS’ newly published Average Weekly Earnings (AWE) measure- which replaces the Average Earnings Index – paints a stark picture of the pay squeeze on private sector workers during the recession and the degree to which pay has continued to rise relatively rapidly in the public sector. The total weekly pay of private sector workers actually fell in most months of 2009, whereas in the public sector pay growth of well over 3% was common. This disparity will need to be tackled as the government gets to grips with reducing the fiscal deficit.

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