The level of official unemployment in the UK has remained unchanged at a 42-year low of 4.3%. This means that in the three-month period to November, 1.44 million people remain “officially” unemployed in the UK, a drop of 3000 over the previous reporting period. The level of unemployment is not actually measured (for instance by totalling the number of people registered as actively seeking work at job centres), but is estimated by a survey of 60000 people, the Labour Force Survey which enquires if they are seeking work. The methodology is based on an International Labour Organisation methodology and is internationally accepted (it is claimed that the sensitivity in the model is limited to changes of ±100000, so the recorded drop is well below the sensitivity limit).
Average wage growth came in at 2.4% but that was well below the November inflation figure of 3.1% meaning that most people saw a decline in purchasing power over the year to November.
According to ONS, the number of people in work increased sharply in the November reporting period, with 102000 more people in work in the reporting period, taking the workforce up to 32.2 million. Job vacancies are at a 17-year high of 81000 which should imply stronger wage growth than is being seen as employers tempt applicants with better wages, but this is not borne out by actual wage growth, it would seem. Average UK (gross) earnings now stand at £490 per week, having seen an £11 hike over the year.
Of course, if a significant proportion of jobs are low wage, low skill positions then the bargaining power of applicants will have little effect since they can still be relatively easily replaced from the unemployed/under-employed pool. It has been claimed that a significant proportion of new jobs created in the UK since the Global Financial Recession have been insecure, low-paid opportunities in the so-called “gig economy”.
The dominant term in the UK economy is domestic consumption and so declining disposable income can have a knock-on effect on the wider economy.