GREATER MANCHESTER QUARTERLY SKILLS & EMPLOYMENT BULLETIN DECEMBER 2013
KEY STATISTICS AT A GLANCE RATE N EMPLOYMENT
GM LABOUR MARKET
UK
AN. CHANGE N %
DATE
1,174,700
67.5
71.0
23,400
2.0
↑
JUNE-13
UNEMPLOYMENT
122,800
9.5
8.0
-8,400
-6.4
↓
JUNE-13
ECONOMICALLY INACTIVE
443,800
25.5
22.9
-8,700
-1.9
↓
JUNE-13
VACANCIES
18,236
N/A
N/A
-6,436
-26.1
↓
OCT-13
BENEFIT CLAIMANTS ALL BENEFIT CLAIMANTS
307,610
17.5
13.9
-11,110
-3.5
↓
MAY-13
OUT OF WORK BENEFIT CLAIMANTS
254,940
14.5
11.2
-14,670
-5.4
↓
MAY-13
JSA CLAIMANTS
65,398
3.7
3.0
-17,972
-21.6
↓
NOV-13
LONG-TERM JSA
30,440
1.7
1.4
-5,770
-15.9
↓
NOV-13
18-24 JSACLAIMANTS
16,365
5.9
5.2
-7,025
-30.0
↓
NOV-13
141,130
8.0
6.2
-5,740
-3.9
↓
MAY-13
LONG-TERM (12+) ESA/IB
118,110
6.7
5.2
-7,220
-5.8
↓
MAY-13
18-24 ESA/IB CLAIMANTS
7,860
2.8
2.5
1,290
19.6
↑
MAY-13
27,710
1.6
1.3
-4,010
-12.6
↓
MAY-13
9,210
3.3
2.7
-830
-8.3
↓
MAY-13
29,260
64.3
JUNE-13
ESA/IB
LONE PARENT IS 18-24 LPIS CLAIMANTS
WORK PROGRAMME (WP) WP REFERRALS (cumulative) WP ATTACHMENTS (cumulative) WP JOB OUTCOMES (cumulative)
74,770
N/A
N/A
72,700
N/A
N/A
10,220
N/A
N/A
8,860
651.5
↑ ↑ ↑
NEET 16-18
4,497
5.8
6.7 (ENG)
-713
-0.4 p.p
↓
SEPT-13
EET 16-18 GCSE - % of pupils achieving 5+ A* - C grades GCSE - % of pupils achieving 5+ A* - C grades inc. Eng. and Maths
73,698
94.2
93.3 (ENG)
-5,548
0.4 p.p
↑
SEPT-13
25,388
83.4
81.1 (ENG)
766
0.6 p.p
↑
2012/13
18,204
59.8
58.6 (ENG)
927
1.7 p.p
↑
2012/13
JUNE-13 JUNE-13
EDUCATION & SKILLS
*For a more detailed breakdown of the data, including at local authority level, please click here. The link will download an excel file where local authority specific data can be viewed, as well as detailed Work Programme statistics.
01
UNEMPLOYMENT MOVING IN THE RIGHT DIRECTION The latest figures show that around 65,400 people were claiming JSA in GM in November 2013 – a decrease of 7,100 (-9.8%) on a quarterly basis. As a proportion of the resident working age population, 3.7% of people in GM were claiming JSA in November – a higher figure than the North West (3.4%) and UK (3.0%) (Please refer to following commentary article for more on this topic.) Youth claimants experienced a quarterly decline of 14.1% (2,685 fewer young people), with the 18-24 claimant rate now standing at 5.9% - equivalent to the regional (5.9%) but higher than the national (5.2%) rate. Similarly, long-term claimants (meaning claiming for over a year) are down 12.5% on a quarterly basis and 15.9% annually. The number of GM residents claiming any type of out of work benefit is falling. This is mostly driven by falls in JSA claimants, but also ESA/IB and Lone Parent Income Support claimants, which have experienced annual declines of 3.9% and 12.6% respectively. However, young (1824) ESA/IB claimants are the exception – they have increased by almost a fifth annually. There were 18,236 job openings in GM in October 2013, down by almost one quarter (-6,400) on the same month last year. The highest proportion of vacancies were in professional occupations (27.5% or 5,020), followed by associate professional & technical roles (21.0%, 5,532).
WORK PROGRAMME PERFORMANCE STILL BELOW EXPECTATIONS From April 2013 – June 2013 there were 6,610 referrals to the Work Programme in GM, with 2,240 job outcomes. That means, for this financial year so far, there is a total performance level of 33.9%, compared to 34.7% nationally. Whilst JSA referrals have fallen since the start of the programme, ESA referrals have been rising. However, when combined together, the overall effect is that the lower referrals from JSA haven’t been matched by increased referrals from ESA. JSA job outcomes continue to constitute the largest proportion of all outcomes. Only the JSA priority groups have seen an increase beyond minimum performance levels. ESA flow performance levels remain below expectations.
GREATER MANCHESTER’S GCSE PERFORMANCE HIGHER THAN AVERAGE New GCSE results for the 2012/13 academic year reveal a modest improvement in the proportion of students achieving 5+ A*-C grades (83.4%), and also those achieving 5+ A*-C grades including English and Mathematics (59.8%) – both higher than the national figures (81.1% and 58.6% respectively). In terms of NEETs, the latest data from September also shows a small decrease in the proportion of 16-18-year-olds NEETs in GM, while the proportion of EETs increased simultaneously. These improvements are likely to be a reflection of the change in the leaving age for compulsory education.
02
Commentary: Why it is too early to talk of a recovery in the labour market Stephen Overell, Principal, Employment and Skills, New Economy Employment is up and unemployment is down. So does that amount to a “recovery” in the labour market? Some of the important arrows are clearly moving in the right direction, but the honest answer is not the one the conurbation longs to hear: there aren’t yet enough jobs of the right kind for the word to be accurate. Start with the striking 21.6% fall in claimants of Job Seekers’ Allowance over the year to November 2013. At first glance, this is evidence of a strengthening labour market. Yet there is a notable and widening gap between the claimant count and the “official” unemployment rate, which is the internationally agreed measure, as defined by the International Labour Organisation (sought work in the past four weeks, available to work in the next two weeks if offered a job). This is also falling, but at a much slower rate (by 6.4%) and still sits at 9.5%, representing some 30,000 more unemployed people than prior to the recession. The Governor of the Bank of England has suggested a new trigger for interest rate rises will be when unemployment falls to 7% nationally; if Greater Manchester had a vote on the Monetary Policy Committee, its hands would be stuck firmly in its pockets. Why the divergence in the measures of unemployment? It is a growing puzzle. Some reasons are understandable. Nearly 300,000 students in full-time education are counted as “unemployed”, for example, while very few claim benefits; and some unemployed people claim benefits other than JSA (conversely, participants in the Work Programme are counted as “employed”). It is also possible that JSA claimant may be falling as transfers onto Universal Credit in Greater Manchester’s “pathfinder” areas take place (since May 2013). Yet this is most unlikely to explain the the difference because the rate of decrease in Greater Manchester is very similar to national rates – in other words, areas yet to move to Universal Credit. It seems that a likely explanation is that some people may be falling out of the benefits system altogether - perhaps because they are being sanctioned, perhaps because JSA represents less of an incentive and more of a stigma, perhaps because they are moving into the cash-in-hand informal economy – or worse, destitution. Because of such uncertainties, it is hard to be sure that falls in the claimant count represent a labour market success or a failure of social safety nets. A second reason why labour market performance is weaker than claimant count falls imply is that employment is returning in more “flexible” forms. Of course, labour market flexibility is one of the canonical virtues of the British way of working, celebrated by politicians of all parties. Yet flexibility is not an unalloyed social good if its benefits are not shared mutually among employers and employees. For the latter, flexible can mean insecure. That is surely an important theme of recent data. Taking a longer time period that compares March 2008 and March 2013 (as New Economy’s Skills Analysis does), levels of full-time work in March 2013 were 3% below that of March 2008. By contrast, part-time work was up 11%, temporary work was up 16% and self-employment was up 9%. According to the Office for National Statistics, just under a fifth of part-time work is “involuntary”. It is legitimate to assume similar (arguably greater) proportions do not want to be self-employed or temporary or on many of the other forms of flexible work arrangement, but are working this way because they don’t perceive they have an authentic choice. A key test for labour market “recovery” will be when a more vigorous return of permanent full time jobs occurs. This, in turn, will depend on when employers feel sufficiently confident to sustain greater numbers of full-timers – and whether they perceive a productivity pay-off in a more stable and committed permanent workforce. 03
DEFINITIONS Economic Inactivity Inactivity rates refer to the proportion of the defined population that are unable to enter the labour market. This may be due to the fact that they are of working age but in full-time education; they are unable to work due to incapacity; they are looking after a family member or home; or that they have taken early retirement. Importantly, they also do not satisfy the criteria for being ILO unemployed. That is, they are not in work, but do not want a job, have not sought a job in the last four weeks, or are unavailable to start in the next 2 weeks. Employment Support Allowance/Incapacity Benefit/Severe Disablement Allowance (ESA/IB/SDA) Claimants in receipt of contribution based incapacity benefits. To have qualified for IB/SDA claimants must have had a personal capability assessment of their ability to work. Those individuals that cannot work, are of working age and have made enough National Insurance contributions can claim IB/SDA. No new claimants are now allowed to claim IB/SDA – instead they are to be directed to claim Employment Support Allowance (ESA). All current IB/SDA claimants will be re-assessed in line with the ESA requirements for claims. A long-term claimant refers to individuals who have been claiming IB/SDA for over 1 year. ILO Unemployment ILO unemployment is the International Labour Organisation’s definition of unemployment: that individuals do not have a job; want a job; are seeking or have sought a job in the past 4 weeks; and are able to work within the next 2 weeks. The rate is given as a percentage of the economically active population. It is the Government’s preferred measure of unemployment. Jobseeker’s Allowance Jobseeker’s allowance (JSA) is the most common unemployment benefit. It is mainly paid when eligible individuals don't have a job and are looking for work, however in certain circumstances it can be claimed by individuals that are in work but working less than 16 hours a week. There are 2 types of JSA: (1) 'Contribution-based Jobseeker's Allowance' which is paid at a standard rate if individuals have paid or been credited with enough class 1 National Insurance contributions; and (2) 'Income-based Jobseeker's Allowance' which is based on individuals' income and savings and is paid at a rate based on individual circumstances. A long-term claimant is defined as someone who has claimed JSA for more than 6 months. Lone Parent Income Support Since May 2008, a lone parent can receive income support if they: have at least one child under 12; are between 16 and 59 years old; have a low income; work less than 16 hours a week; are not studying full-time (with the exception of those taking up to an A-level standard); do not claim JSA; and do not have savings above £16,000. From October 2009 the age of the child for which individuals can claim this benefit has been coming down, and since October 2011 has been 5 years old. Working-Age Population Rates were previously calculated based on the female age 16-59 and male age 16-64 population. This has now changed to include all 16-64 year olds.
04
SOURCES JSA Claimant Rate Source: Claimant Count – Rates and Proportions, DWP, 2013; Youth JSA Claimant Rate Source: Claimant Count – Age and Duration, DWP, 2013; Long-term JSA Claimant Rate Source: Claimant Count – Age and Duration, DWP, 2013; NEETs Source: National Client Caseload information system, 2013 (password required) WORKLESSNESS BENEFITS Claimants Source: Work and Pensions Longitudinal Survey, DWP, 2013; ESA/IB Claimants Source: Work and Pensions Longitudinal Survey, DWP, 2013; Lone Parent Claimant Source: Work and Pensions Longitudinal Survey, DWP, 2013; ILO Unemployment Rates Source: Annual Population Survey, ONS, 2013; ILO Employment Rates Source: Annual Population Survey, ONS, 2013; Inactivity Rates Source: Annual Population Survey, ONS, 2013; GCSE Results Source: GCSE and equivalent results including key stage 3 provisions, DfE, 2013 Work Programme Source: DWP Tabulation Tool, DWP, 2013
05