Jobs in the private sector are showing signs of finally offsetting the redundancies within the public sector. However, at the same time, millions of workers have effectively taken a pay cut and are now classified as underemployed.
Those who are suffering the most amongst jobseekers are jobless workers over the age of 50 and this group has even bypassed young workers as those who have been out of work for at least a year. Even so, the news is not all bad as the rate of unemployment did drop in the three month period from November 2011 and January of 2012.
There has been a great deal of worry within the past year as the coalition’s austerity measures have caused an onslaught of redundancies within the public sector. In that same three month period 37,000 workers lost their jobs in the public sector, which would have been quite discouraging, but the latest figures show that the private sector was able to create 45,000 jobs.
Although the news indicates that the job situation in the UK appears to be improving, experts are cautioning that it is too soon to be overly optimistic. The reason for their caution is that this data also shows that there are 1.38 million people working part-time since they were not able to find full-time employment. Of those part-time workers, two thirds are women.
Also, another 2.3 million people are considered to be in a class called ‘economically inactive.’ In the end, although the jobless rate seems to be falling, wage growth has been cut to 0.7%. This figure is below inflation and it boils down to effectively cutting the average worker’s pay. The British Chambers of Commerce chief economist, David Kern, asks that government to take a hard look at their plans to raise taxes and to find ways to incentivise hiring young workers.
