May Labour Market Update

Monthly Labour Market Briefing from Paul Swinney - the Coalition one year on.

Briefing published on 17 May 2011 by Paul Swinney

The Coalition (almost) 12 months on

There has been a great deal of coverage in the press in the last couple of weeks about the impact of the Coalition on its first year anniversary. Today’s data release doesn’t quite give us data for the entire twelve months. But there are three interesting things to note for Government policy – issues which mark a departure from the behaviour of the labour market during the recovery from the last recession in the 1990s:

1. There has been a large change to the composition of full time and part time working since the recession, with a large jump in part-time working. This means that policy should both be mindful that there will be some correction to this (as people move from part-time back to full-time work) but also tailor policy to be more aware of the rise in part time working.

2. Partly as a result of this the labour market has not responded in the way that many people expected. Whereas it could have been feasible that the Government would have had to battle against rising unemployment, the unemployment rate has been very stable over the last 12 months. This means it will be even more difficult to predict both the labour market and the impact of policy over the coming years.

3.The size of the youth unemployment problem is difficult to measure. 935,000 young people are unemployed, but around one third of these are full time students. This means that policies to reduce youth unemployment need to account for both low skilled young people and those that have recently qualified but are struggling to find employment. Each scenario is likely to require a different policy approach.