THE BLOG

Unemployment Fall Disguises Serious Poverty in the UK

18/09/2014 11:18 BST | Updated 17/11/2014 10:59 GMT

Unemployment has continued to fall as the claimed economic bounce back saw more UK citizens find work.

The latest Office for National Statistics (ONS) figures show the same pattern as the last year, but signs of a slowdown in the number entering work mean the country is not out of the woods yet.

Although unemployment fell by 146,000 in the last three months to 2.02 million, the number actually in work only went up by 74,000, ending a run of figures showing hundreds of thousands more getting jobs.

The main reason for this was a rise of 114,000 in the number classified as 'economically inactive', which is due partly to a slowdown in the number of disabled and long term sick people being found fit for work as the hated Atos work capability assessment is wound down.

It also includes many more who have decided to look after their homes instead of looking for work, an indicator that the kind of quality jobs needed to lead the UK out of recession still aren't being created.

The continuing problems of low pay for the majority saw average yearly rises of only 0.6% even as inflation was far higher over the last twelve months. Most workers saw their take-home pay plummet in value as they struggled to make ends meet.

The problem of self-employment continues to blight the country. There is nothing wrong in theory with 368,000 more people working for themselves over the last year, around the same number that found full time jobs.

But George Osborne's pretence that there has been a wave of entrepreneurship sweeping the UK was exposed for the nonsense it is when the ONS released an article on this issue last month.

This showed that self-employed earnings fell by nearly a third between 2006 and 2014, a huge blow to those involved.

It gets worse than that though, with their average pay at nearly £100 per week less than in 2006 sitting at less now than a full-time minimum wage employee by around £2,500 per year.

It needs to be understood that when these apparently rosy employment figures are announced each month, they are really telling us of many people who cannot find other work being forced into either a fake status that disguises their joblessness or poverty level pay and developing world working hours.

There is another element of disguise, in that the pay of self-employed people is not included when official figures are released; how much worse would today's 0.6% rise in wages have been if the 12% fall for those working for themselves was included?

The bald work statistics don't tell us about the quality of work created, whether employee or self-employed, but ever-decreasing pay does.

It is clear that low quality jobs, including zero hours contracts, insecure work, and work created in low-pay sectors, are holding back the recovery, resulting in ever-lower incomes, as TUC Secretary General Frances O'Grady says in response to today's news:

"Last week the Governor of the Bank of England said the fall in real wages is the worst since the 1920s and today's figures show it getting worse. Pay increases are less than half the rate of inflation, so living standards keep on falling.

"More people are working, but growth based on more low-paid jobs isn't working for Britain. We need jobs that ensure everyone gets a fair share in the growing economy through real increases to their wages."

Simply rewarding the richest with more and more money, while everyone else simply divides up what is left without growing it, is no way to long term economic prosperity.