Number of people in employment hits record level with almost 30 million in work – but the squeeze on wages continues

Number of people in employment hits record level with almost 30 million in work – but the squeeze on wages continuesMore Britons are in work than ever before as unemployment falls to 7.8%But wages rise by just 1.4% to 472 per week, with inflation at 2.7%'UK is now ahead of international rivals', claims Iain Duncan Smith

By
Hugo Gye

PUBLISHED:

10:17 GMT, 20 February 2013

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UPDATED:

11:01 GMT, 20 February 2013

A huge rise in employment means that
there are more people in work than every before, with almost 30million
Britons holding jobs, it was revealed today.

And the number of people claiming jobseeker's allowance has fallen to its lowest level in nearly two years.

But wages continue to fall in real terms, with pay rises lagging far behind the rate of inflation.

Climbing: The number of people in work is at a record high as the economic recovery continues

Climbing: The number of people in work is at a record high as the economic recovery continues

Figures from the Office for
National Statistics showed that unemployment fell by 14,000 in the final
quarter of last year to a total of 2.5million, or 7.8 per cent.

In addition, 12,500 fewer people claimed jobseeker's allowance, with the total of 1.54million being the lowest since June 2011.

Overall,
29.73million held some sort of job, the largest number ever recorded –
71.5 per cent of the UK population. That is a rise of 154,000 between
September and December.

There was a shift in employment from part-time jobs to full-time, reversing one of the recession's most worrying trends.

The number of people in full-time work increased by almost 200,000, while there were 43,000 fewer part-timers.

Positive: The unemployment rate fell to 7.8 per cent in the final quarter of 2012

Positive: The unemployment rate fell to 7.8 per cent in the final quarter of 2012

Iain Duncan Smith, the Work and
Pensions Secretary, pointed to ONS statistics showing that the number of
people out of work for more than a year had fallen by 15,000, to
879,000.

'The fall in
long-term unemployment is particularly welcome and shows that the
training and support we are offering is helping people move off benefits
and into work,' he said.

'These figures show another big increase in full-time jobs, half a million more British people in work over the past year and more women in employment than ever before.

'The UK is now ahead of many of its international rivals when it comes to cutting unemployment and creating jobs which is so important as we compete in a global race.'

'Welcome': Iain Duncan Smith heralded the employment figures as a boost for the Government

Liam Byrne

Clash: Iain Duncan Smith, left, claimed today's figures show the jobs market is healthy, but his Labour opposite number Liam Byrne, right, called for stronger measures to boost economic growth

However, there was less good news in the youth unemployment figures, as it emerged that 11,000 more young people were out of a job.

In total 974,000 16- to 24-year-olds are currently looking for work – a youth unemployment rate of 20.8 per cent.

And average wages also continue to flag, rising just 1.4 per cent over the past year to reach 472 per week, roughly 24,600 per year.

Since inflation is standing at 2.7 per cent by the CPI measure, that means the average worker has less spending power now than a year ago.

Wage growth has been lower than inflation since mid-2008, which marked the start of the recession which has devastated the British economy.

The average employee works 31.9 hours per week, up slightly from the year before.

Lagging: Wage growth has been lower than inflation since the start of the recession in 2008

Lagging: Wage growth has been lower than inflation since the start of the recession in 2008

Shadow work and pensions secretary Liam Byrne said: 'Today's fall in the headline rate of unemployment is welcome but it is now clearer than ever that British workers are paying the price to get a job or keep a job.

'People have now taken an average 1,200 pay cut since the election because jobs are so hard to come by and today we see there's still more than five people chasing every vacancy.

'Youth unemployment has risen yet again, back towards the million mark, the number of women out of work has gone up and long-term unemployment is still far too high.

'What Britain now needs from next month's Budget is an industrial-strength back-to-work programme to match the crisis we face.'

Good news: The number of unemployed people has fallen but wages continue to rise slowly

Good news: The number of unemployed people has fallen but wages continue to rise slowly

Paul Kenny, general secretary of the GMB union, said: 'That we have mass unemployment of two and a half million five years into this recession is waste on a grand scale.

'To this must be added the millions in enforced temporary and part time jobs and those massively underemployed.

'What is tragic is that there is no light at the end of the tunnel as we are in the middle of a triple dip recession.'

The CBI welcomed the figures, but expressed worries that lagging wages 'show we are not out of the woods yet'.

Neil Carberry, director for employment and skills, said: 'It is particularly good that so much of this month's jobs growth is driven by full timers, given worries about under-employment.'