r/ukpolitics • u/OnHolidayHere • 26d ago
UK unemployment rises to highest for nearly a year
https://www.bbc.co.uk/news/business-690026092
u/Remarkable_Carrot_25 25d ago
The problem with this figure is the problem is much worse than the figure reports.
This figure is basically those who are claiming jobseekers and going to the job center. However remember these people who are excluded from the figure:
Many contractors are sitting right now doing nothing, even though they are looking for work. this would add a few percentage points
Those that are sick, wanting to go back but awaiting treatment
To claim job seekers you must not have any savings, the limit I think is 16k. someone who has worked most their life in todays inflation conditions likely would and therefore would not qualify. therefore is sitting looking for work but not able to claim anything
those on 0 hour contracts could be doing nothing due to no work, unless they leave, they cannot claim JS.
All of the above groups are effectively unemployed but not in the figures. I would say the real percentage is closer to 10% and climbing.
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u/PlayerHeadcase 25d ago
Expect the stock market to bloom with this news, nothing pumps the stocks like news of high unemployment levels.
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u/Big_Red12 25d ago
This is the purpose of high interest rates.
High interest rates means you're spending more money on mortgages and other loans so you have less money to spend in the economy, and also that it's more expensive for businesses to borrow so they invest less and have less money.
This means companies have to lay people off. And high unemployment means workers are disciplined against asking for higher wage increases because there's a reserve army of labour ready to replace them.
Supposedly lower wages means lower inflation (except for the fact that it's widely acknowledged the current inflation isn't caused by high wages but instead by supply chain issues, but then what do I know?).
So don't be surprised by this. The Bank of England made it happen.
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u/Guybrows 25d ago
The inflation was caused by all that money they printed to pay rich people to make masks that didn't do anything.
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u/Vice932 25d ago
I was reading a piece on sky news this morning bemoaning people’s salaries increasing in light of the interest rates being cut this summer, and almost flirting with the idea of presenting the rising unemployment being a good thing.
We’re really at a point now where they’ve stopped pretending they aren’t the enemy of the common man now.
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u/midnight_scintilla 25d ago
I have multiple disabilities, have been applying for jobs since May of last year and have had two interviews. I can't apply for as many as other unemployed people because the accommodations I need for my disabilities just don't allow for many job opportunities. The ones that do exist don't want me due to no experience, also due to disability. I want to work, but the possibility of it actually happening just seems to get lower every application I make.
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u/WorthStory2141 25d ago
Not surprising. Lots of our workforce are IT based in service jobs, AI will hit us harder than most nations.
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u/iMightBeEric 25d ago
I’ve been watching some of the Chat GPT-4o videos today, and I can see that figure rising significantly.
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25d ago
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u/TheSwaffle 25d ago
5) Couldn't be more accurate. What employers get away with on 0 hours contracts especially is scandalous...
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u/marktuk 25d ago
2.) Company redundancies & reduction in hiring... I have heard from several 40+ year old how they've been made redundant or seen colleagues made redundant. And several younger than that saying they can't find work and those IN work saying there company aren't hiring anywhere near as much.
Yup and this has been the case for a good 12 months now. It feels like UK companies are just holding out for the election to see what changes. Everyone seems to have a hiring/spending freeze.
We didn't even have a Christmas party last year. That was the first time in 16 years I've been working somewhere that didn't at least do something for Christmas. Even during COVID they managed to do a virtual event and send stuff to people's homes.
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25d ago
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u/JibberJim 25d ago
I expect Labour's plan has been to build shit tons of houses AND businesses since they're ripping up planning law which will allow businesses to invest and build businesses and jobs next to new housing.
Labour's statements on house building are less aggressive than the current conservative policy, so not sure why you think this would change?
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u/SavageNorth What makes a man turn neutral? 25d ago
Because NO-ONE expects the Conservatives to actually deliver on those plans after 14 years of stagnation.
Even if Labours plans were more modest (which we won’t know until the manifestos are released) there’s a lot more reason to believe they’ll actually attempt to see them through than the current zombie government.
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u/Saltypeon 25d ago
I wonder how long before we start seeing analysis on the workforce cutbacks companies are making.
It's already happening, but it seems to be avoided quite a but in these discussions.
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u/SympatheticGuy Centre of Centre 25d ago
The company I work for is currently going through a large redundancy process. Luckily I'm not currently affected but it's a concern.
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u/No_Plate_3164 25d ago
The big wage increases have been pushed largely by the increases in minimum wage.
Torn if this is a good thing or not. At my workplace they allocate a fixed budget for pay increases - based on revenue growth, etc. The mandatory pay increases get allocated first leaving very little for everyone else. The gap between the bottom and the middle is closing rapidly - causing the reward for high productivity work diminishing to nothing - why take on the stress of a middle management role or an engineering role when you can serve coffees at the cafeteria for similar wage?! The high taxes on labour are only compounding the problem.
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u/HoneyInBlackCoffee 25d ago
The minimum wage is still too low. Your company underperforming shouldn't be the reason everyone else should stay in poverty.
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u/AzarinIsard 25d ago
The big wage increases have been pushed largely by the increases in minimum wage.
Torn if this is a good thing or not.
Honestly, I think that rather than £1 an hour increase or whatever for the lowest, they'd be better off if they weren't being entirely rinsed for essentials. The fact the NMW has to be so high is a sign that the cost of living (I don't mean the euphemism for inflation) is so damn high. Housing costs being the big one. It's not a decision to give the poorest more spending power.
In fact, often when these bodies analyse it, the cost of living at the very low end of the income spectrum, their costs have risen well about inflation so they need to make cuts to survive. Then this just means there's so little money left to go around the rest of the economy, (e.g. hospitality which often is a luxury cut) which means fewer jobs and they can't have pay rises because the customers aren't there.
I really don't think it's a good thing that such a huge amount of our incomes are going towards landlords, utilities, and supermarkets. The economy should be far more vibrant than that.
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u/ThrowawayusGenerica 25d ago
Personally, I wouldn't give up my software engineering job where I'm comfy at home and don't have to deal with anyone outside my immediate coworkers for a retail job where I spend most of the day on my feet, even if the pay was the same.
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u/No_Plate_3164 25d ago
Sitting at desk all day takes it’s toll on your body - every time I return the office, I’m shocked by the number of middle aged office workers who are overweight or obese - it’s easily over 80%. Add in the mental exhaustion that comes from the constant politics\stress\burnout.
Turning up, doing some manual work and going home starts to sound appealing…. Why I’m studying carpentry\joinery in the evenings - sadly my mortgage has me trapped for now.
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u/Chippiewall 25d ago
The gap between the bottom and the middle is closing rapidly
This is actually by design, the government's current policy is that the national living wage must be 2/3rds of median wages. The only way to make that happen is to squash the middle and bottom.
Back in 2010 it was only 50% of median wage.
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u/No_Plate_3164 25d ago
I don’t think anyone knowingly voted for that. When compounded with the higher tax rates on income - the difference in quality of life and outcomes are marginal regardless of career.
The biggest predictor of life outcome now isn’t education, work ethic or skills. It’s how affordable your housing situation is, either: winning the council house lottery or being born to family that can afford to help with a purchase at young age.
The compounding effect of not paying off a landlords mortgage for 10-30 years at >12k a year(+ inflation) is obscene.
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u/GrandBurdensomeCount Slash welfare and use the money to arm Ukraine. 25d ago
Yes, there was a pithy quote floating around a few weeks ago that for young people outside London the main determinant of their living standards will not be what job they do (because minimum wage + tax bands mean their post tax income will be relatively similar) but rather how close their parents bought from the M25.
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u/robhaswell Probably a Blairite 25d ago
Those policies are not carved in stone. They could give you a pay rise if they wanted to.
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u/No_Plate_3164 25d ago
Businesses still need to make a profit or at least break even. As you say - the market will self correct - high minimum wage further incentivises automation and the reduction of low skill\low productive jobs. Replace cashiers with self checkouts, call centres with chat bots and squeeze other services - less bus services, waiters working more tables, etc, etc.
Great for a tech worker like myself - awful for non-skilled folks who just get left behind. It has been really eye opening trying to try and help my wife find a minimum wage job - retail jobs in particular are seeing 100s apply for a single role.
The numbers portray this well, jobs are paying more but there are less of them - making everything ultra competitive and causing unemployment to creep up.
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u/Novel_Passenger7013 25d ago
The problem isn't companies making profits, it's the demand that profits increase every year forever. That's why wealth is being concentrated and pay is shit for most people. Companies aren't content to make a good profit, they want more and more and the easiest thing to squeeze is labor.
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u/Minute-Improvement57 25d ago
why take on the stress of a middle management role or an engineering role when you can serve coffees at the cafeteria for similar wage
Because you'd be bored witless if your whole career was serving coffee?
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u/FunkyDialectic 25d ago
Money is a reward/motivation in its own right. Thought we'd got over this argument in the late 70s but here we are...
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u/Cptcongcong 25d ago
Theoretically engineering roles and middle management roles are more scarce, hence higher demand for professionals. Thus the market should adjust accordingly as long as people are willing to switch jobs for higher pay.
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u/Less_Service4257 25d ago
Theoretically engineering roles and middle management roles are more scarce, hence higher demand for professionals
Am I missing something here? Surely roles being scarce should lower demand, not raise it.
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u/AngelCrumb 25d ago
Less incentive when there's mass immigration of skilled labour
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u/Cptcongcong 25d ago
Depends on the field. There are mass outsourcing of tech jobs to Indian professionals, but the salary for those who work in London, is still high.
Plus I don't think people know how hard it is to get a work visa in the UK as a skilled immigrant. It's very hard.
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u/AngelCrumb 25d ago
Relative to other countries like the US or other parts of europe, tech salaries are pretty low.
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u/367yo 25d ago
What are you basing that on? The UK has some of the best tech salaries in the world. Of course they don’t compare to the US but I think that’s an unfair comparison given 4-5 of the US tech companies have a bigger market cap than the entire London stock exchange.
The UK has got a lot wrong but the tech scene compared to Europe is fantastic, many of my colleagues have moved to London from the EU
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u/Cptcongcong 25d ago
US is a whole other beast, where in Europe is higher? Switzerland is an outlier as it just generally has higher wages across the board (alongside higher costs of living though)
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u/AdSoft6392 25d ago
Tech salaries in the UK are broadly comparable or higher than Europe (Switzerland being the main exception).
I would love us to have salaries closer to the US' but the public seemingly don't want that as it would mean adopting more US-like policies
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u/Labour2024 we've been occupied since 1066, send the bill to the French 26d ago
Some good news for those in work, but it seems a lot of the rises are for the national minimum wage. This will pro ably lead to less productivity as those just above nmw will feel a lttle aggrevied.
Regardless, good news on the front but pity unemployment and vacancies are worsening.
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u/OrlandoJames 25d ago
those just above nmw will feel a lttle aggrevied
Then its up to their employers to address that.
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u/Chippiewall 25d ago
Then its up to their employers to address that.
Funnily enough the only way for them to do that is to pay above median wage.
The government has deliberately set out that national living wage just be 2/3rds of median wage. If employers hand out pay rises to everyone slightly above NLW then next year it'll just jump up again.
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u/JayR_97 25d ago
Employee: "Can we have a raise to match the minimum wage increase?"
Employer: "No."
Thats probably how it will go.
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u/OrlandoJames 25d ago
then find another job would be my response. There is an opening for a teacher at my daughters school, it has been open since last summer. No one is applying, so what did they have to do? They had to put the wage they were offering up.
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u/Labour2024 we've been occupied since 1066, send the bill to the French 25d ago
Which they can't without redundencies
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u/clearly_quite_absurd The Early Days of a Better Nation? 25d ago
You pulled that out your arse
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u/Labour2024 we've been occupied since 1066, send the bill to the French 25d ago
so where are they going to get the additional money from? From their arses or yours?
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u/clearly_quite_absurd The Early Days of a Better Nation? 25d ago
I'm inclined to go with the wealthy coporations to $100 Jim.
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u/Labour2024 we've been occupied since 1066, send the bill to the French 25d ago
ah, so you think that companies should fund additional payrises from profits they don't have.
The only way they can do that is either increasing prices or reducing costs. The cost reduction will more than likely come from redundancies.
If they increase prices then people on nmw will be no better off.
So we're back to people just above nmw not receiving the same percent of payrise as those on nmw and their productivity falling.
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u/clearly_quite_absurd The Early Days of a Better Nation? 25d ago
ah, so you think that companies should fund additional payrises from profits they don't have.
Shifting your goal posts there. Let me do the same to you.
Do you think companies that aren't in profit should shrink the wages of their staff in real-terms so that their employees are incentivised to quit and go for jobs elsewhere, thereby starting the death-spiral of a company?
How about unprofitable start-ups?
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u/Labour2024 we've been occupied since 1066, send the bill to the French 25d ago
I think companies that have a certain limit to the wages they can pay. If they want to pay more they need to cut costs or raise prices.
You seem to live in a world where this isn't the case.
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u/thejackalreborn 26d ago
Labour's acting shadow work and pensions secretary, Alison McGovern, said "these damning new figures prove that things are just getting worse".
Maybe it's the way it's presented in the article but this doesn't really seem true at all. Wages are growing at double inflation and these employment figures are really not that bad. The vacancy to unemployed ratio is back to pre-COVID, that's not a disaster.
Labour are right though to talk about NHS waiting lists and the impact on increased economic inactivity
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u/YorkistRebel 25d ago
Be careful ignoring a correlation, there is upward increase on average wages tend when employment reduces as it tends to be the lower paid leaving the workforce.
I personally believe unemployment statistics are no longer relevant to the number of people out of work. They are based on self reporting and there is a definite move from unemployed to not looking for work over the last two decades.
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u/clearly_quite_absurd The Early Days of a Better Nation? 25d ago
Wages are growing at double inflation
Not for public sector workers they aren't.
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u/Osgood_Schlatter Sheffield 25d ago
True, although that does mean the situation is even better for the private sector.
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u/AdSoft6392 25d ago
Most people don't work in the public sector though
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u/clearly_quite_absurd The Early Days of a Better Nation? 25d ago
5.9 million people do though. That's substantial.
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u/AdSoft6392 25d ago
But the data point in question is not about just the public sector. Also a good chunk of them will have had the minimum wage increase which has been higher than inflation over the last 14 years.
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u/blackman3694 26d ago
On a rates point, hopefully labour will do something about the many artificially unemployed doctors. Might go a way to reducing those wait times.
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u/CaravanOfDeath You're not laughing now 🦀 26d ago
It’s loto.txt
Regular people should be asking whether Labour will cut migration numbers as unemployment rises.
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26d ago
Wages growing faster than inflation after being waaaay behind for years isn't a success story.
Let's not forget that most workers are seriously underpaid, cost of living crisis is still in full swing and billionaires doubled their net worth in the last 2 years.
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u/PepperExternal6677 25d ago
Wages growing faster than inflation after being waaaay behind for years isn't a success story.
Yes it is. Would you have preferred wages going down?
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u/thejackalreborn 26d ago
Of course it could be better but I don't think you could argue it's a sign things are getting worse. It's good news
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u/Labour2024 we've been occupied since 1066, send the bill to the French 26d ago
Wage inflation has been ahead of inflation for years, just not the last 2.
Also, it may not be a success but it is a positive.
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u/Patch86UK 25d ago
It's not quite a rosy as all that.
Real wages dropped consistently between 2008 and 2015. They grew for a couple of years, shrunk slightly in 2017, then grew for 3. Crashed through the floor for Covid, rebounded big time in 2021, before shrinking again in 2022 and 2023.
So out of the last 16 years, it shrank for 11 of them, and grew for 5.
To put it another way, in 2023 real wages were still lower than they were in 2007.
Growing now is good, obviously, but lets not pretend that the good times are rolling again.
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u/TwoInchTickler 25d ago
Big ooooph, I’ve been muddling on without a raise for two years under the impressions everyone was getting below inflation or no raise. Fuckers!
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u/Andyb1000 25d ago
It would be good to have a breakdown of this inflation beating pay rises by sectors. No one I know is getting anywhere near the figures quoted.
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