Underemployment: The New Reality For Brits?

'I'd Always Assumed I'd Be Working Full Time At This Point'

It took David Cameron three hours and a 50,000 increase in employment to declare Britain could be "a winner in the global race."

During a triumphant PMQs on Wednesday afternoon he told MPs that morning's unemployment figures were "a good piece of news that should be properly welcomed and looked at, because a number of different things are happening.

"Employment is up by 212,000 this quarter; unemployment is down by 50,000 this quarter; the claimant count has actually fallen by 4,000; and what that means is that since the election some 170,000 fewer people are on out-of-work benefits."

His employment minister, Mark Hoban, was even quicker, announcing on Wednesday morning that the latest Office for National Statistics employment figures were "a real landmark."

The Office for National Statistics also reported that part-time employment increased by 125,000 between March and May to 8.13m

The numbers spoke for themselves; employment at its highest since records began, youth unemployment under a million for the first time in a year, the claimant count down.

The Telegraph was triumphant, declaring in its leader column the figures “also provide hard evidence that the Government’s austerity strategy is not, as Labour claims, dragging the entire economy into the mire.”

But buried in the good news was one niggling statistic – that more than half of the increase in employment was down to a rise in part-time work.

The Office for National Statistics also reported that part-time employment increased by 125,000 between March and May to 8.13m - also a record high, worsening the new phenomenon of underemployment - those with a job who want to work more hours than they do.

A recent study by the TUC, using the American U6 measure of unemployment, which includes those looking for full-time work who settle for working part time, workers who have given up looking for a job and those who are not actively looking for a role but may have sought work in the last 12 months, put the numbers in the UK at a record 6.3m.

The measure isn’t just used by those on the left – Republican candidate Mitt Romney used the U6 measure to attack Barack Obama on unemployment during a presidential debate.

"There is suffering in this country," he said. "Look at the evidence of the last four years. It's absolutely extraordinary. We've got 23 million people out of work."

In a blog for The Huffington Post UK on Tuesday Tony Dolphin, senior economist at the IPPR said the "conundrum" of employment rising despite Britain being in a double-dip recession is "not quite as great as the raw data suggest."

"For a start, GDP in the latest quarter was affected by the extra bank holiday for the Queen’s jubilee. Without that, real GDP would probably have been roughly unchanged over the last year. And private sector employment growth was boosted by 196,000 thanks to the reclassification of FE and 6th form colleges; underlying private sector jobs growth was ‘only’ 628,000," he wrote.

The employment figures were also distorted by the so-called Olympic effect, which created temporary positions for over 100,000 people during London 2012.

According to Nicola Smith, head of the economic and social affairs department at the TUC underemployment is "one of the key explanations why employment and GDP are going in different directions."

"It's definitely one reason why living standards are squeezed. Inflation is outstripping pay is, for the last two years or more people have been experiencing real term pay cuts," she tells The Huffington Post UK.

And while it’s generally better for people to be employed than not, there’s still some concern about what will it means for Britain’s economic recovery. "Underemployment can be an extremely challenging position for people to face… It can be a real strain for a household," Smith says.

Unemployment fell by 50,000 between June and August to 2.53m - but part-time employment is at a record high

It's not all bad news. As the TUC's Smith emphasises "it's much better than people are in work than not at all" - but for Donna, a 51-year-old social worker and mother-of-two from Glasgow who tried to get more hours after her children left school, underemployment is a real problem.

"I worked part time when my two sons were young, and I've tried to get additional hours since they left school - and have occasionally done so. But it’s very difficult now in times of local government spending cuts.

"It’s becoming a serious problem because of my pension, and because I always assumed I'd be working full-time at this stage.

"I do think underemployment is a real issue. Job sharing is now replaced with 'life work' balance arrangements - people work all different numbers of hours and all different combinations - so I work 17.5 hours over 3 days and my old job share partner works 17.5 hours over 2 days," she tells The Huffington Post UK.

The recession this time around is, in the view of Labour Market Adviser at the Chartered Institute of Personnel and Development, Gerwyn Davies, different. "If today's jobs market comprised a similar proportion of full-time workers to that of previous recessions, we might expect to see unemployment rise to similarly high levels," he tells The Huffington Post UK.

"What is particularly interesting however is the recent rise in temporary work. For instance, of the quarterly rise of more than 150,000 employees reported in yesterday's figures, more than a third of this increase was attributable to temporary work.

"Of the quarterly rise of more than 150,000 employees reported in yesterday's figures, more than a third of this increase was attributable to temporary work."

Corin Taylor of the Institute of Directors points out ONS figures which show that 1.4 million people are working part time because they are not able to find a full time job, - 18% of all part time workers. But for him, both part-time and full time employment figures are “heading in the right direction.”

"According to the ONS numbers over the last year, total employment has risen by 510,000, of which 157,000 (31%) has been full-time, and 353,000 (69%) part time.

"Over the last quarter, the trend has been similar. Employment has increased by 212,000, of which 88,000 (41%) has been full time and 125,000 (59%) part time."

But for many, part-time work is the new reality. So beware: next time a government minister crows about employment going up, it's important to work out which type of employment. And while having a job is - mostly - better than nothing at all, there's a real risk workers like Donna will be trapped in jobs which don't offer enough hours or pay, reading about Britain being "a winner in the global race."


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