“The UK is now clearly suffering a major jobs and pay crunch under the combined impact of tough fiscal policy medicine and very uncertain conditions in the global economy. The private sector is simply unable, at present to create enough jobs to offset public sector job cuts. At 2.6m in the three months to September, unemployment is already higher than consensus forecasts had expected for 2011 as a whole. With nothing to suggest a pick-up in the economy any time soon, unemployment is at best likely to peak at around 2.75 million next year. Were the economy to experience a double-dip recession unemployment could reach 3 million by 2014.
“While the rise in headline youth unemployment to 1.02 million is set to grab most attention the most worrying feature of these latest jobs figures is a quarterly fall of 305,000 in the number of employees (spilt roughly half and half between full-timers and part-timers), including almost 100,000 temps. Without a corresponding 100,000 increase in self-employment the overall jobs situation would thus look worse still.
“Also very worrying is the rise to 868,000 in the number of people unemployed and looking for work for more than a year, 30% of whom are aged 16-24. It is these long-term unemployed young people, rather than unemployed youths as a whole, who should be the prime target of Government policy measures.
“With growth in earnings also easing against a backdrop of still high price inflation, the jobs and pay crunch is clearly making this a miserable time for UK workers as well as the jobless, the anaemic ‘jobs-light/pay-tight’ recovery itself feeling just like a recession.”
