Government Statistics Mask Tragedy of Britain’s Working Class

3rd September 2015 / United Kingdom

The UK unemployment total has risen for the first time in two years recently which possibly means that falling unemployment has steadied. However, the governments own figures hide the realities of life on the streets of Britain, especially for the working class.

Only one in every 40 new jobs created since the recession has been for a full-time employee, according to the Trades Union Congress. To add to that figure 24 in every 40 have been self-employed and 26 in every 40 have been part-time. Meaning many will be self-employed with additional part-time jobs to make ends meet.

The number of workers on zero-hours contracts has increased by almost a fifth in the last year, sparking concerns that employers are increasingly turning to the controversial arrangements to cut back workers’ pay and conditions.

The Office for National Statistics said the number of people reporting that they work on contracts without a minimum number of hours climbed to 744,000 from 624,000 in 2014, a rise of 19% to 2.4% of the total UK workforce of 31 million. The ONS also found that 40% of those on such contracts wanted to work more hours than they were offered.

John Philpott, the director of The Jobs Economist, said that even a small proportion of zero-hours contracts can drag down overall pay levels but also mentioned – “In an otherwise very lightly regulated UK labour market the forthcoming large hike in the minimum wage when the national living wage (NVL) is introduced next year might act as a further incentive to employers to increase their use of zero-hours contracts – which are already very prevalent in sectors where the NVL will bite hardest – in order to minimise the impact on total labour costs.”

Forty percent of zero-hours workers earn less than £111 a week, the qualifying threshold for statutory sick pay, compared with 8.5% of permanent employees and one quarter of all the unemployed are offered these contracts.

In retaliation to the suggestion that there should be a NVL, the McDonald’s UK boss defends the company’s use of zero-hours contracts for staff and also said that more employers would stop offering full-time permanent contracts to avoid paying the steep rise in the national living wage. He would, McDonald’s UK has 80,000 zero-hours contract workers.

In the meantime, the ONS states that officially we have 1.85 million unemployed. That is, people with no job, looking for work and signed on. That is 5.96% of the working population unemployed but looking for work.

Then we have a staggering 8.99 million not looking for work, given up or unavailable for work. That’s another 28.9% of the population aged over 16 years and under retirement age of 65.

Figures from Eurostat, the EU’s statistics agency, shows that ‘underemployment’ remains a lingering blight on the UK economy. The number of part-time (but wanting full-time) under-employed workers in the UK is now 1.75 million as at 6 months ago.

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The ONS states that employment is 73.4% of the 31.04 million working age people of the UK and by implication 26.6% in total are unemployed.

However, those officially unemployed (sign on and looking) according to the government is 1.85 million or 5.6% of the workforce. The actual number is 5.96% – a small number but nevertheless it’s still important.

Those not looking for work or qualifying for unemployment benefits is 8.99 million or 28.97% not 26.6% as the government says.

Those not recorded as unemployed but have some work with no guaranteed working hours are 744,000 or 2.39%

And then we have the army of part-time workers who are in one or more part-time jobs but wish they had full-time work at 1.75 million or 5.63% and not recorded.

So the employment figures don’t show the real story at all. For those out of work but looking and those in work and trying to earn more work to survive, represent a staggering 14% of the working age population of Britain.

To confuse matters even more, Britain’s deepest postwar recession has led to record numbers of self-employed people, who are earning lower wages and working longer hours than other workers. Self-employment in the UK is now at its highest level since records began almost 40 years ago and has 4.6 million or nearly 15% of the total workforce.

The biggest rise in employment in the UK, far from what the Chancellor and the economic miracle, has come from self employment, zero-hours and part-time work. The number of self-employed people over 65, again not recorded, has more than doubled in the past five years to reach almost half a million, mainly because these people can no-longer afford to retire.

Self-employed people have on average experienced a 22% fall in real pay since 2008-09.

The plight of everyone else struggling to get by doesn’t get easier. Just last year it was reported that British workers suffered an “unprecedented” decline in real wages over the past six years, with the average employee £2,000 worse off since the financial crisis hit, according to new research. The average worker saw a 8pc decline in real wages between 2008 and 2013, said the National Institute of Economic and Social Research (NIESR). With properly accounted inflation, this figure does not improve.

“The scale of the real wage falls is historically unprecedented, certainly in the past 50 years where broadly comparable records exist,” said Paul Gregg, Stephen Machin and Mariña Fernández Salgado, the authors of the report.

With falling real wages we have another government statistic that hurts everyone. Inflation. “The UK’s inflation rate turned positive in July, with the Consumer Prices Index measure rising to 0.1% from June’s 0%” – says the BBC.

Asked to give the current rate of inflation, respondents in surveys gave a median answer of 2.2% when the ONS was stating it was 0.1% last April – a difference of over 2%.

Combing all these figures, many of which are confusing, manifests itself in a declining economic picture over a long period of time as far as working people are concerned.

In fact, the number of British households falling below minimum living standards has more than doubled in the past 30 years, despite the size of the economy increasing twofold, a study on poverty and deprivation says. Conversely, since the Thatcher/Reagan era in the 1980’s, corporate profits have just about doubled both sides of the Atlantic.

According to the study, 33% of households endure below-par living standards – defined as going without three or more “basic necessities of life”, such as being able to adequately feed and clothe themselves and their children, and to heat and insure their homes. In the early 1980s, the comparable figure was 14%.

Almost 18 million Britons live in inadequate housing conditions and that 12 million are too poor to take part in all the basic social activities

The cause? Figures released by the Office for Budget Responsibility (OBR) confirmed that overall Osborne has presided over the slowest economic recovery in British history. Just to clarify, that’s the slowest recovery since 1760 or 255 years. Britain’s working class prospects have been getting steadily worse whilst corporate profits have increased as they decades roll by. These two numbers correlate.

Headlines like “At last, tax receipts are surging as Osborne’s recovery continues” fails to mention that incomes are falling in real take home terms, full employment has collapsed and poverty and deprivation soars and statistics massaged to create an illusion.

Unfortunately, we have followed the failed American model and looks where it’s gotten us!


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