The labour market recovers – in some places more than others
Authors: Charles Levy
22 January 2014
Today’s labour market statistics show continuing improvements in the labour market. At the UK level, up to 280,000 additional jobs were gained in the three months to November 2013.
A more detailed analysis of the employment data shows that much of the jobs growth is concentrated in just a few areas of the country.
The Work Foundation’s analysis of the latest data from the ONS Annual Population Survey shows that there were 585,000 additional jobs in England between September 2011 and September 2013. More than 300,000 of these were concentrated in just five Local Enterprise Partnership geographies:
• Greater London – 145,000
• Leeds City Region – 62,000
• *Coast to Capital - 36,000
• Greater Manchester – 35,000
• Greater Cambridge & Greater Peterborough – 27,000
Over the same period, nine Local Enterprise Partnership areas had a net loss in the number of jobs. Cornwall & Isles of Scilly, Greater Lincolnshire, Lancashire, Cumbria and Gloucestershire were all areas with the sharpest drop in employment.
These headlines indicate that the economic recovery is not evenly balanced. London and neighbouring areas of south eastern England appear to be those parts of the country gaining most employment as the economy recovers. But the growth in some northern cities shows that the recovery must not be simplified as a north-south divide.
Commenting on today’s national labour market statistics we highlighted the issue that aggregate jobs growth does not seem to be feeding through into increasing living standards. Wage growth continues to lag behind inflation, and productivity is falling in both manufacturing and service industries. This matters as productivity increases will be key to any sustained improvement in living standards.
Given this sub-national variance in performance it is increasingly clear that these wage and productivity effects will be playing out very differently across the country. This increases the importance of finding ways to look at local labour markets and for local groups to tailor their policy responses to match their need.
* This is the area to the south of London covering Brighton and Hove, London Borough of Croydon, Gatwick Diamond, Lewes and West Sussex
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