Workingwise.co.uk’s annual survey was published for National Older Workers Week and...read more
Employment figures out today show pay is not keeping up with inflation and that the number of vacancies is similar to the number of unemployed people, with economic inactivity being a significant factor in labour shortages.
Unemployment has fallen to 3.8% while vacancies rose to a new record of 1,288,000, according to the latest figures from the Office for National Statistics, meaning that for the first time in at least 50 years, there are now as many vacancies as there are unemployed people.
The vacancies problems is in part fuelled by the continued rise in economic inactivity, which particularly affects older people and those with long-term health issues. The economic inactivity rate was up 0.2 percentage points to 21.4% in December 2021 to February 2022 on the previous quarter.
While the number of job vacancies rose, the rate of growth continued to slow down. Over the quarter the number of vacancies increased by 50,200 with the largest increase in human health and social work.
The figures show the number of full-time employees increased on those for the last quarter, but that this was offset by a decrease in part-time employees. While the number of self-employed workers is still well below pre-coronavirus pandemic levels, it has increased slightly in the recent quarter.
Growth in average total pay (including bonuses) was 5.4% and growth in regular pay (excluding bonuses) was 4% in December 2021 to February 2022. However, in real terms, adjusted for inflation, regular pay fell on the year at negative 1%. However, strong bonus payments over the past six months have kept recent real total pay growth positive. Moreover, the figures on any growth in pay are in part affected by furlough.
The Institute for Employment Studies [IES] highlighted the large rise in the number of people who are economically inactive, saying the number of people not working due to long-term ill health has seen the largest annual increase since comparable records began in 1992. The rise in economic inactivity for those aged over 50 has also continued to rise, up by more than 200 thousand in the last year and by more than 600 thousand since the pandemic began.
IES Director Tony Wilson said: “This data shows that the living standards crisis is already starting to bite. With inflation now well above five per cent, real pay excluding bonuses has seen its largest fall since 2013 and will fall further in the coming months. However, the picture for those out of work is, if anything, worse, with employment flat overall, four hundred thousand more people out of work than before the pandemic began, and a record rise today in the number not working due to long-term ill health. This is in turn fuelling acute labour shortages which in turn will be holding back growth and may fuel further inflation. For the first time in at least 50 years, there are now as many vacancies as there are unemployed people.
“This triple whammy of falling pay, more people out of work and labour shortages is only going to get worse as inflation continues to rise through the summer. The Spring Statement missed an opportunity to address this, but we need urgent action now to protect incomes and raise participation, especially for older people and those with health conditions. Employers will need to do more too, and make sure that jobs are advertised and designed in ways that are accessible and inclusive for older people.”