Lies, damned lies and employment statistics – do the employment stats really belie the deeper recession numbers?

I don’t take any pleasure in communicating bad news about the current state of our country. But when the news is bad, we should know it’s bad, and not allow the government to claim it’s actually good. Or to try to dilute it among other, maybe more titillating news.

Perhaps hoping that a big ‘Leveson’ day (Hunt SpAd Adam Smith’s testimony will surely be all over the media tonight and tomorrow) will distract from bad news, the government announced today that far from being better than the initial recession-confirming figures as had been hoped, the ‘firmed up’ economic data show that the contraction of the UK economy has been worse than initially reported. The double-dip recession is deeper than first thought.

Listening to various interviews today, I can already detect a damage-limitation spin-exercise going on. Treasury minister Chloe Smith says this is a ‘technical recession’, as though somehow it’s merely illusory and not really affecting people adversely. An economist on Radio 5 Live says that the recent good news about improving employment figures belies the reported GDP contraction, implying that if more people are in work, things can’t really be getting that much worse. Earlier this week, David Cameron tried to taunt Ed Miliband that he wasn’t sufficiently delighted by the ‘good news’ that employment figures were improving.

The thing is, not too long ago I did an analysis – for my own interest and for a few tweets at the time – of the Office of National Statistics Labour Market figures, because the government had been trumpeting selective supposed improvements in some areas of the April statistics, and then doing the same about an overall increase in employment in the May figures. Perhaps unsurprisingly, if you ignore how the government chooses to portray the statistics and drill down just a little into the actual numbers, the real picture looks a bit different from what you’d expect if you took their statements at face value.

For example, when the May ONS statistics were released, the government made a big deal of a fall in unemployment and a rise in employment compared to the preceding quarter. Let’s look at some details. I’m going to be generous to the government and use the ‘seasonally-adjusted’ figures, even though the actual numbers (before the ONS does some statistical black magic on them), show a very different (and worse) picture. The tweaked figures are bad enough.

In May, the government reported an increase in employment of 105,000 people compared to the previous quarter. Fantastic, eh? Surely that can only be good news. Well, not exactly. During the same period, the number of people in full-time work actually fell by 13,000. This means that all of the 105k additional  jobs were only part-time (no data available on how many actual hours these jobs entail), while 13k full-time jobs were lost and only replaced by 13k part-time jobs. Suddenly the picture doesn’t look so rosy – and remember, these are the adjusted figures. (The unadjusted figures show a massive fall in people employed full-time of 170,000, with an increase of only 48,000 part-time employees).

What’s more, the ‘improved’ employment figures include 89,000 new self-employed people. ‘Great,’ you may say, ‘we’re a nation of entrepreneurs!’ But someone taking themselves off welfare and starting to try to work for themselves doesn’t actually mean there’ll be enough work for them to make a living. It could be an act of desperation because they can’t find paid employment; businesses fail, tradesmen may not find enough work and so on. So an increase in self-employed people is only good news if those people manage to still be making a living one, two, three years down the line.

Let’s go back and take a closer look at those part-time workers. Of course, some people work part-time because they want to – they may have kids and not want to be away from them for 35-40 hours a week, don’t need a full-time salary etc. Nothing wrong with that.

However, out of the total of appr, 7.8 million people working part-time, over 1.4 million are doing so because they want full-time work but can’t find it – and increase on the previous quarter of 73,000. That’s 73 thousand more people who’d love to work full-time and can’t find full-time work. On top of that, there are over 1.5 million people in temporary contracts, of whom 616,000 are doing temporary work because they’re unable to find a permanent position – up 14,000 on the preceding quarter. And remember, these are still the seasonally-adjusted figures that look better than the plain numbers. (My source for these data is ONS document emp01may2012_tcm77-263607, which you can download from http://www.ons.gov.uk)

The government would like us to believe that the employment statistics represent a picture of an economy on the upturn – a situation they would love us to believe means that we’re only in a ‘technical recession’ and really the GDP statistics are some kind of misleading aberration. But in fact, the numbers depict a country where proper, well-paid, full-time work is being constantly eroded and only replaced by part-time jobs (that generally have lower rates of pay, to boot); and where more and more people are having to take this poorly-paid part-time work because they can’t find the kind of job they want and need. In a healthy economy – or one that’s even slightly recovering – this is not what we would see.

It’s extremely obvious from any kind of proper look at the actual figures that the government is picking out a single element from the statistics that suits its political purposes, and making a big deal of it. Fair enough, in one way – any government tends to do that. However, it’s equally plain that the actual figures do not in any way justify Flashman Cameron’s sneering mockery of the opposition in the Commons or that the Tories’ scorched-earth, ‘you say austerity, I say efficiency’ policies are doing anything but damage.

I want to see Labour hammering Cameron and co with these facts. Let’s not let them get off the hook, or get away with the shamelessly skewed soundbites with which they’re trying to fool or distract the British people in the hope of continuing to get away with their mistreatment of our economy and our society.


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