In 2019, prior to the covid 19 pandemic, unemployment rates had been falling steadily for 8 years.
16 November 2021 11:15 AM

Govt warned to not ignore wider employment issues due to record number in new jobs

16 November 2021

This morning’s ONS Labour Market Statistics show that record numbers of people started new jobs between July and September this year, as Covid restrictions fully eased and furlough started to unwind. However, the government have faced multiple warnings to not skirt over the wider issues at play in the labour market.

Chancellor Rishi Sunak said earlier today that the figures were a “testament to the extraordinary success of the furlough scheme”, adding: “We know how vital keeping people in good jobs is, both for them and for our economy – which is why it’s fantastic to see the unemployment rate falling for nine months in a row and record numbers of people moving into employment.”

In all 1.2 million people moved into work from being out of work (including nearly two fifths of all of those who were unemployed in the spring – another record), while 980 thousand people changed jobs.

Overall, this means that 2.2 million people started a new job between July and September – or 7% of all of those in work. In data going back to 2001, we have never seen a figure higher than 6.5%.

However despite these record movements into work, the number of vacancies has continued to rise (now reaching 1.2 million) and the number of unemployed people per vacancy has fallen even further, to just 1.3 people.

This is the key measure used in assessing the balance between labour demand and labour supply, and is now at comfortably its lowest since at least 1971. At the height of the crisis from April to June 2020, there were 4.1 unemployed people per vacancy.

The says the Institute for Employment Studies (IES), says their analysis suggests that this recruitment crisis is being driven by huge falls in labour market participation, mainly explained by more older people leaving work and fewer younger people entering from education, and that lower migration explained between a quarter and a third of the falls.

Overall they estimate that there is a “participation gap” of 950 thousand, between the number of people in the labour market now and what would have been expected based on pre-crisis trends. Just over half a million of this is explained by older people, and particularly older women (300 thousand).

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