Clash of the manifestos: job security

30 April 2015

"Britain is creating more jobs than the 27 other countries of the European Union put together. That means more people with the security of a regular pay packet"—Conservative manifesto

"Too many have been driven from secure, full-time work, into precarious, badly paid jobs—many working on zero-hours contracts"—Labour manifesto

Over two million more people are in employment than in the three months before the last election, but it's hard to measure the quality of jobs created.

The Conservatives said that Britain is creating more jobs than the rest of the EU put together. This actually refers to the net change in employment, not the number of new jobs created.

In the latest Eurostat figures, the UK had seen a rise in employment of about 1.9 million since the second quarter of 2010. The other 27 EU countries combined had actually seen employment fall slightly. So the UK saw a larger net increase in employment than the rest of the EU combined over that particular measurement period, but the same would be true of any region that saw employment grow.

This comparison is sensitive to the start and end points used. If you measure from the first quarter of 2010—then the rest of the EU had a larger increase in employment than the UK

A bigger problem is that while some countries (like Germany and Poland) saw quite large rises in employment, others (like Spain and Greece) saw large falls. Grouping the "rest of Europe" into one category mixes together countries with very different economic circumstances in a way that conceals a wide variety of experiences. Germany and Poland combined saw a larger rise in employment than
the UK.

The UK's own statistics are more recent. They show just over two million more people in employment than there were in the three months before the 2010 election.

While the Conservatives say that this means more people claiming a regular pay packet, Labour says that people have been driven into precarious, badly paid jobs.

There's no easy way to tell how the number of people with a regular pay packet has changed. Some self-employed people enjoy regular work and pay, and the Labour Force Survey can only tell us about the type of contracts or working arrangements people have, not how secure they feel in their current job.

In the latest figures, there were roughly 1.47 million more full-time and 0.53 million more part-time workers in employment than there were in the three months before the last election.

Roughly 0.55 million more people were self-employed, and there were 1.45 million more employees (with a 1.21 million increase in employees working full-time).

Looking at precarious employment, the separation rate—the proportion of workers that move from employment to unemployment each quarter—had returned to approximately its pre-downturn level in the fourth quarter of 2014, and was lower than it was at the time of the election.

The number of people working in temporary jobs had risen by about 0.19 million since the three months before the 2010 election, and temporary employees now account for a slightly larger proportion of the workforce than was previously the case.

This isn't to say that all of these people have been forced into temporary work; just over a third of these workers had taken temporary work because they couldn't find permanent jobs.

It remains the case that one in six people who work part-time do so because they can't find full-time jobs. In the noughties the average was fewer than one in 10 part-time workers being in this position, so the issue still lingers.

Average wages have fallen substantially since 2010, but the effect on wages of the changing types of jobs available in the economy was generally positive between 2010 and 2014. The odd year out is 2014, when the changing mix of high, low and medium skilled jobs presented a drag on wages.

Not coincidentally, the Bank of England pointed out that the change in employment in that period saw higher employment growth for young and low skilled workers.

Finally, we cannot put a precise figure on the change in the number of people employed on zero hour contracts since the election. In the latest figures, there were just under 700,000 people employed on zero hour contracts as their main source of work.

These figures come from a survey, and are affected by greater awareness of zero hour contracts, so we can't say how the number of people on zero hour contracts has changed over time.

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