The labour market in 2012

via The Work Founation News by Dr Neil Lee

On the face of it, the labour market has been performing well. Gross Domestic Product (GDP) is now four percent lower than at the start of 2008. But despite this massive economic shock, there are actually more people in employment now than when the crisis began. On the face of it, it looks like the labour market has done well in 2012. Yet dig beneath the employment figures, and the labour market in 2013 faces some tough challenges.

The increase in employment hides some troubling trends which look likely to continue into 2013. First, many of the new jobs aren't full time, with full time employment actually decreasing by 706,000 since 2008. Instead, we've seen growth in part-time employees (around 310,000) many of whom are seeking full-time work. The TUC estimates that 1.4 million people are now 'underemployed' – in employment, but wanting to work more hours. Self-employment has also increased by almost 400,000. Many who choose self-employment are happy to do so, however, for many others it may mean eking out a living while unable to find full-time work.

Second, youth unemployment – in particular long-term youth unemployment – remains one of the most important societal problems facing the UK. Youth unemployment is important as it can have 'scarring effects' – the longer young people are out of work, the lower their wages can be – an effect which lasts until middle age.

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