Member Article

Caution urged despite upturn as jobseeker numbers fall again

Latest government figures show that 61,400 people were claiming Jobseeker’s Allowance (JSA) in Greater Manchester in March – a decrease of 2,900 (4.5%) when compared with the figure for February 2014 of 64,300.

The North West saw a similar monthly decline of 4.4%, while the fall for Great Britain was slightly lower at 3.8%.

As a proportion of the resident working-age population however, 3.5% of people in Greater Manchester were claiming JSA in March – which is still higher than the North West (3.2%) and Great Britain (2.9%).

Youth unemployment (JSA claimants aged 16-24) in Greater Manchester decreased on a monthly basis between February and March, falling by approximately 450 to around 27,700. On an annual basis, the number of youth JSA claimants is 26.9% (10,200) lower than this time last year.

Long-term (6 months+) claimants in Greater Manchester declined in March 2014 to 14,800, down by 860 (5.5%). On an annual basis the number of long-term claimants is now 36.3% (8,400) lower than this time last year. The North West (32.7%) and Great Britain (30.3%) also saw annual declines in long-term claimants.

Stephen Overall, principal for employment and skills at New Economy, said: “This month’s data is another episode in the dramatic reduction of those claiming benefits. Especially welcome is the fact that more young people – who were particularly affected by the recession – now appear to be moving off benefits in greater numbers than before. All the districts of Greater Manchester have shared in this general improvement.

“But while this is welcome it ought not to be taken automatically as a reflection of the general health of the labour market. The other main measure of unemployment – the international standard defined by the International Labour Organisation – has shown a far slower improvement in the rate of employment than the JSA claimant count, suggesting many people may be moving off benefits, but not necessarily into work.”

“The recession may be over in a technical sense, but it doesn’t feel that way to everyone. There is still a legacy for too many people of low wages, slow wage growth, and job insecurity. As well as focusing on reducing the unemployment count, ensuring that quality job opportunities are created and residents are supported to get these jobs is central to ensuring a sustainable recovery.”

His response was echoed by ELAS, the Manchester-based business support consultancy.

While welcoming the reduced job seekers totals, and news that weekly wages, including bonuses, rose by 1.7% in February, up from 1.4% in January, according to the Office for National Statistics (ONS), while inflation has fallen to 1.6%, ELAS’ Head of Consultancy, Peter Mooney, sounded a note of caution, based on previous fluctuations in the economy.

He said: “We have been here before – many of us can recognise the surge of optimism that flows through the business community when the economy turns upwards.

“And inevitably, after a period of austerity, there is an impulse to reward staff with higher pay, or to accede to more requests for a raise. But we have also seen what happens when the pay pendulum swings too far too quickly: inflation starts to rise, and that always puts jobs at risk.”

Mr Mooney urges businesses to take a realistic view of the overall economic picture.

He said: “Although production and exports are starting to pick up, with many businesses taking on staff as a consequence, wise employers are continuing to keep a very close eye on staff costs.

“If the latest figures are taken as a ‘green light’ for reckless wage claims – particularly in the public sector – we could soon see the upturn start to stall. Far better to keep pay at prudent levels until this recovery has a chance to feed through the economy as a whole, so that all areas may benefit.

“Perhaps by Q4, employers may be in a better position to loosen the purse strings a little – but until then, we would urge caution.”

ELAS offers a range of business support services to firms across the UK and the Republic of Ireland from its Manchester headquarters.

This was posted in Bdaily's Members' News section by Simon Malia .