Unemployment in July 2012 - As Good as it Looks?

Unemployment increased in Worcestershire last month (by 87 to 10,585), which is in line with the trend in the West Midlands region though against the slight fall nationally.

There are a number of ways of expressing unemployment so one has to be very careful to compare like with like.  The headline figures normally quoted in the media are based on ILO (International Labour Organisation) methodology which is a large-scale survey of those available and actively looking for work.  This differs from the other main count, which is Job Seekers Allowance (JSA) claimants (a narrower group, as there will be people who are actively looking for work but who are, for a variety of reasons, ineligible for JSA).  At one time, nationally, these two figures were very similar but over the past couple of decades they have diverged to be around one million apart (ILO 2.56m, claimants 1.59m).

More details on the national figures can be found here.  In the West Midlands region unemployment rose by 7,000 to 235,000 on the ILO count and stands at 8.8%.  This still puts the region above the national level (8.0%) but it is now the fourth worst region in the country, having once been the highest.  A breakdown of regional figures to constituency level can be found here, including a more detailed explanation of the methodology of compiling the unemployment figures.  Despite the West Midlands not being at the top of the table for unemployment as a region it is striking that three of the five worst constituencies are in inner-city Birmingham.  What is also striking is the disparity with other parts of the region, including Worcestershire, where the figures are between 3% and 4%.  What is even more striking is that the figure for Stratford (upon Avon) is 1.3% and that there is a whole swathe of the country to the south east of there that is below 2%.

Of course, just as in Worcestershire, there will be pockets (larger or smaller) where unemployment is higher.  The question is how significant this is against a background where the issue is generally perceived not to be as pressing as it will be in poorer areas.  For it is clear that apart from when large-scale redundancies are made that unemployment affects poorer parts of areas more and that these will often be places where manufacturing or other older industries were prominent.

Turning to Worcestershire, that means our three more urban districts have higher unemployment – Redditch 4.6%, Worcester 4.8%, Wyre Forest 4.6% (Kidderminster 5.3%) – and they were places where manufacturing was, or still is, significant. That is not to deny that many other people suffer unemployment and that there are parts of our rural districts where it is a significant concern.  Figures for Worcestershire can be found in the monthly County Economic Summary prepared by the County Council’s Research and Intelligence section.  Their figures are JSA claimants, and for some reason they use to 2001 census data for calculating percentages, so these are not strictly comparable with ONS data for the region and the rest of the country) that are based on a more recent (2010) estimate of working-age population.

There may be some slight encouragement in the small fall in the long-term unemployed figures, i.e. over six and 12 months (see Figure 5 on p.18 of the County Economic Summary) and similarly for long-term youth unemployment (see pages 25 and 26).  It is difficult to tell if the figures for young people are related to the cycle of the academic year or whether other factors are also important (Figure 7).

There has also been much debate about how unemployment is falling when GDP is falling and we are in the third quarter of a recession.  This was reflected in the differing views of the man from HSBC and deputy regional agent of the Bank of England in my posts of 23 June and 10 July.  Stephanie Flanders (the BBC’s Economics Editor) in her blog weighs the various possibilities.  Unless some of the figures are wrong (and in some cases we are arguing about fractions of a percentage point) it seems there are a lot of people under-employed, either working part-time when they can’t get a full-time job, or who are self-employed doing sessional work but not actually working that much, or that there is quite a lot of labour hoarding going on.  This last possibility is supported by the Chartered Institute of Personnel andDevelopment’s Labour Market Outlook survey, which suggests that many employers are holding onto skilled staff but that if there is no economic improvement soon they will be forced to make redundancies.

On one level, we in Worcestershire might be thankful that we escape the worst of unemployment compared with some other parts of the country.  But neither should we be complacent for there are parts of our county that are more badly affected and questions need to be asked about what is being done about it (including by the churches).  The hugely uncertain economic outlook and a seeming inability to make much impression continues to raise the question about whether the debate and policy options are too much framed by more of the same.   Almost all of our political parties offer only variations of the same orthodoxy.  So far those asking questions about the wider purpose and future of our economic system are on the margins.  Perhaps when there is a crisis but it is not yet cataclysmic there is a tendency to turn inward rather than seeking the new thinking and step-change that may be necessary.  I will express my concern again that the church maybe too much bound up with its own internal crisis and therefore looking inward to contribute to this debate.