July 18, 2014 - Mark Williams
According to the Office for National Statistics (ONS), in the three months to May UK unemployment fell by 121,000 to 2.12m – its lowest level in almost six years.
This follows earlier welcome news about the UK economy in the first three months of the year, when the unemployment rate fell from 6.6% to 6.5%. The total number of unemployed claiming Jobseeker's Allowance in May fell by 36,300 to 1.04 million.
The UK employment rate now stands at 73.1%, with some 78% of men and 68% of women in work. The ONS said more than 4.5m people were now self-employed, the highest tally since records began in 1992, with an increase of 404,000 registrations in the past year.
Prime Minister David Cameron said the UK employment rate had returned to record-setting 2005 levels. Bullishly, he added: "The figures show that more people than ever have the security of a job. Full employment is a key aim of our long-term economic plan."
But if bonuses are excluded, UK wage rises remain at their lowest level since 2001. Wage growth has been declining steadily throughout 2014. Between January and March, including bonuses, there was annual wage growth of 1.9%. Average wages in March to May including bonuses were a mere 0.3% higher than the same quarter last year. Average wage rises excluding bonuses rose in that time by just 0.7%.
As reported by BBC News, Frances O'Grady, TUC general secretary, said: "It's good to see unemployment falling, but with pay growth falling to a record low, serious questions must be asked about the quality of jobs being created. If all the recovery can deliver is low-paid, low-productivity jobs – many of which don't offer [employees] enough hours to get by – it will pass most working people by and Britain's long-term economic prospects will be seriously diminished."
Mark Beatson, chief economist at the CIPD, the professional body for HR and people development, said: "These statistics highlight a continuation of the recent pattern of strong employment growth, especially for young people, but very low pay growth. However, with the growth in employment driven by self-employed people, especially among the part-time self-employed, this period might herald a modest slowdown in hiring activity compared with the recent past.
"The latest wage growth figures could be an unusually low one-off, but, even if they are, they remind us that there are no signs of pay pressures building up in the official figures. This should not come as a surprise when labour productivity growth is flat and when the government's welfare reforms, the availability of EU migrants and the latent supply from the under-employed mean we have strong growth in labour supply. It is very difficult to see where the pick-up in wages growth will come from."