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UK unemployment falls, but are all the figures positive?

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According to the figures released by the Office for National Statistics, approximately 30 million adults were in a job in the last quarter to November 2012, up by more than half a million on the previous year.

It also revealed that unemployment fell by 37,000 in the latest quarter to just under 2.5 million, the lowest since spring 2011.

This was the tenth consecutive fall and was coupled with another cut in the number of people claiming jobseeker’s allowance, which was down by 12,100 last month to 1.56 million, the lowest since June 2011.

The employment rate for those aged from 16 to 64 was 71.4%, up 1.1% on a year earlier, while the number of people classed as economically inactive, including those looking after a relative or who have given up looking for a job, fell by 13,000 to just over nine million.

However, the ONS data showed an increase of 26,000 in the number of women out of work for up to six months, and a rise of 1,000 in the number of 16-24 year-olds out of work, the first rise since last summer.

Commenting on the figures, Kevin Green, Chief Executive of the Recruitment and Employment Confederation (REC), said:

“This is exciting news from the labour market. It would be easy to get distracted by recent headlines around the big high street names such as Comet, HMV and Jessops going under, but the fact remains that the UK jobs market is continuing to improve, the overall trend is one of job creation and we are outperforming our European neighbours.

“It’s important that people don’t declare the sky is falling because of losses at a few firms and to recognise that the picture is varied from sector to sector.

“Recruiters are right there at the front line of the jobs market and the regular feedback they give us is that employers continue to hire. Small businesses don’t make national headlines but they are where the majority of job creation is going to come from.”

The TUC has released a report however, arguing that the rising number of people in work has been driven by a surge in self-employment.

Its analysis indicates that since the start of the recession in 2008 the small rise in employment levels has been driven by a 9% rise in the number of self-employed workers (up 330,000). Over the same period, the number of employees has actually fallen by 1% (down 284,000), it says.

According to its study, since early 2010, 40% of the new jobs created have been self-employed roles, even though just 14% of workers are self-employed. The TUC says it fears that this sharp rise in self-employment could be masking the true extent of unemployment as people previously in work ‘go freelance’, start their own businesses or are forced into false self-employment, rather than sign on.

Commenting on the analysis, TUC General Secretary, Frances O’Grady, said:

“We know that the harsh economic climate is having a huge effect on the amount of work that those fortunate enough to have a job are able to get, with over three million people saying they would like more hours than they currently have.

“Ministers brush away these concerning by saying that there are more people in work than ever before. What’s not clear though is how many of these new jobs actually offer secure and regular paid work, let alone enough hours to make ends meet.

“Worryingly, the figures suggest that many of those who have lost their jobs over the last few years are not simply choosing to go freelance, but are being forced into false self-employment, which is often insecure and poorly paid.”

O’Grady added:

“Small falls in unemployment levels in recent months have been welcome, but our better than expected employment figures are masking high levels of under-employment and falsely self-employed workers, who may have hardly any paid work at all.

“We desperately need more decently paid full-time roles to bring unemployment down sharply, and we need a proper economic recovery to achieve this.”

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