Labour market improves but unlikely to be sustained without growth

Posted By Andrew Sissons and Charles Levy

20 June 2012

Commenting on today’s labour market statistics, Andrew Sissons, researcher at The Work Foundation, said:

“We should welcome today’s good news that conditions in the labour market are improving. Comparing the three months to April with the previous three months, employment increased by 166,000 and unemployment fell by 51,000. We saw our private sector create 205,000 jobs, more than making up for continuing losses in the public sector.

“These are the sort of figures we’d expect to see during a strong economic recovery. But it is difficult to reconcile these numbers with the ongoing problems in the economy. There are three possible explanations for this baffling trend. First, the good news on jobs may be a temporary blip, and we may see unemployment rise sharply later in the year. Second, the GDP figures may be underestimating the performance of the economy, and may eventually be revised upwards. Third, and perhaps most worrying, it is possible that we are seeing a transition to a lower wage economy, in which jobs bounce back, but at a lower level of pay and productivity.

“It is too early to tell which of these outcomes is correct. What is clear however, is that it is highly unlikely we will see a sustained labour market recovery without a return to growth or further significant hits to real wages and living standards.”


Ends


Notes to editors


1. Andrew Sissons and Charles Levy are available for interviews, briefings and written comment.

2. The Work Foundation aims to be the leading independent, international authority on work and its future, influencing policy and practice for the benefit of society. The Work Foundation is part of Lancaster University – an alliance that enables both organisations to further enhance their impact.


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