Why it’s a lie that UK employment is at 'record high'

By Neil Patrick

It's spin time again folks!

UK government ministers and some parts of the press have seized upon the latest UK Office for National Statistics employment figures showing that the number of people in work in the UK has increased by 155,000 to its "highest level since records began in 1971".

Sounds good doesn't it? But sadly this isn't quite such good news as it appears. Yup, it’s a true statistic, but it’s the wrong statistic to use. In fact, it’s one of the simplest deceptions in the book of statistical trickery.

In this case, it capitalises on the fact that UK population has grown massively by over 400,000 in just the last year alone.

So when we look at the official employment rate, i.e. the percentage measure of the number of people in paid work, this is still a whopping 2% off where it was in 2008 before the recession hit, falling to 71.7% from over 73%.

Sure 2% doesn’t sound much, but in real life, it means that at least half a million more people would need to get jobs before the employment rate returns to its pre-recession peak. The number of people in work is indeed at the highest level ever - but so too is the number of people in the UK.

The absolute numbers of people in work in the UK have been pushed up by population growth and immigration. The UK's population soared by 419,900 to 63.7 million between between June 2011 and June 2012.

Martin Beck, UK economist at Capital Economics said: "The government would prefer to use employment levels rather than percentages but… the rate is still about 2% below 2008. It's mainly due to population growth and a bit of migration from the European Union."

So the ‘true’ figure, the unemployment rate, measuring the amount of people who are actively seeking work, remains at 7.7% and has not fallen below this level since mid-2009.

Graeme Leach, chief economist of the Institute for Directors, said the ‘recovery’ was "job-lite".

I’d go further; the ‘recovery’ if it can ever be called such, is currently creating mainly low paid jobs, many of which are being taken up by young immigrants to the UK.

Consequently, wage growth still remains weak - total pay for employees rose by just 0.7% in the year to August 2013. And this remained below the Consumer Price Index (CPI) rate of inflation of 2.7%, so wages are actually getting lower in real terms.

Employment minister Esther McVey apparently doesn’t agree with me, saying: "I think this is very positive news, because that's more than a million people who have got jobs since the general election." Hmmm...

So as usual, the employment figures are getting spun by the government. Once you strip away the thin façade of misused statistics, there really is no UK jobs recovery, let alone any growth in incomes. And if ministers are really looking at absolute job numbers as their key progress indicator, then they are not only misleading us, they are deceiving themselves. I’m not sure which is worse.