"There is a need for financial reform along ethical lines that would produce in its turn an economic reform to benefit everyone"

An interesting contribution from Pope Francis here about the origins of our financial and economic crisis and the need for a change of heart.

Unemployment in April 2013

Introduction
Here is a round-up of the unemployment figures for Worcestershire drawn from the monthly County Economic Summary.  The figures are claimant count (i.e. those claiming Jobseekers Allowance) rather than the more widely used Labour Market Statistics.  In common with the national Jobseekers Allowance figures there was a fall in the number of claimants, though nationally and regionally the Labour Market figures showed a rise and seem to suggest an end to the period of falling unemployment.  It remains to be seen what effect this will have on Worcestershire, which overall has been fairly resilient on job losses compared to some parts of the region and country.

Unemployment

The claimant count in Worcestershire in April 2013 fell by 419 to 10,018, which is 748 lower than April 2012.  At 2.9% of the 16-64 population this remains below the regional and national levels.  The districts with the highest proportion of claimants were Redditch and Wyre forest at 3.7%, and the greatest decrease in absolute terms (between April 2012 and April 2013) was in Wychavon with a fall of 253 claimants.

The urban centre with the highest proportion of claimants is Kidderminster with 4.3% and the lowest is Wythall at 1.6%. In Worcestershire's urban areas the proportion of claimants is 0.4 percentage points higher than the county as a whole at 3.3%.

Long Term Unemployment

The proportion of claimants receiving Jobseekers Allowance between 6 and 12 months has fallen by 1.3 percentage points to 19.2% since April 2012 whilst those on this benefit for more than 12 months has increased by 2.1 percentage points over the same period to 22.6% of all claimants. The number of people claiming for 6-12 months has declined due to them either finding employment or falling into the category of claiming for more than 12 months.

Unemployment by Gender

At the beginning of the recession the male claimant count rate increased at a faster pace than the female rate.  Since peaking in 2009-2010 at around 5.5% the male rate began to fall, although not back to pre-recession levels (at around 4%), whilst the female rate has remained at the higher level (around 2%).

Youth Unemployment – Claimants Aged 18-24

In April 2013 the number of claimants aged 18-24 was 2,765, which is a decrease of 200 compared to March 2013 and 380 fewer compared to April 2012.  The greatest decrease in absolute terms (between April 2012 and April 2013) was in Redditch with a fall of 120 claimants.

The proportion of claimants aged 18-24 is 6.7%, which is 0.1 percentage points higher than the England average.  The district with the highest proportion of claimants aged 18-24 was Wyre Forest (8.0%).

Comments

In a briefing from the Chartered Institute of Personnel and Development, Gerwyn Davies, the CIPD’s labour market adviser, said the [unemployment] figures confirmed that the UK job market was still a “battleground”. 

“Private sector firms are not taking on enough staff to offset the contraction in the number of self-employed and public sector workers and the continuing expansion of the UK workforce,” he explained.

“The labour market remains a battleground for jobseekers,” he continued. “With five unemployed people for every vacancy registered with JobCentre Plus, there are twice as many unemployed people chasing vacancies than before the recession.

“Although youth unemployment has fallen slightly – the one bright spot in yesterday’s numbers – CIPD figures still show more than 40 applicants typically chasing every low-skilled job.”

A study by the TUC published the day before the unemployment figures came out showed people aged 18 to 24 are far less likely to be in work today than before the recent recession. The report looked at adults’ likelihood of being in work over the past five years.

It found that under-25s had seen the sharpest fall in job prospects of all age groups, and were 10 per cent less likely to currently be in work than they were on the eve of the recession in February 2008. Some 395,000 more jobs were needed before the youth unemployment rate returned to its 2008 level, said the analysis.

There was also a job shortfall amongst “prime age” workers aged 25 to 49, the data found. The employment rate among 25- to 34-year-olds had fallen by 2.4 per cent – creating a job shortfall of 164,000 – while 71,000 jobs had been lost in the 35 to 49 age category.

But the news for older workers was more positive, according to the figures. The likelihood of a 50- to 64-year-old being in work was 2.2 per cent higher today than it was in 2008 – although this was partly attributable to a gradual rise in the state pension age for women.

Archbishop's warning over economic 'depression'

You may have seen a report of this on the BBC 1 News.  I think it underlines the need for a better banking (and economic) system in ethical as well as financial terms.

Archbishop's warning over economic 'depression' and Robert Peston's reflection on what was said: Should bishops run the banks?

Unemployment Figures for March 2013

Introduction

Here is this month’s round-up of unemployment data for Worcestershire (from the April 2013 County Economic Summary).  Further information about national figures can be found here.  As always, the county figures are for claimant count, which is also in the national figures but is lower than the headline figure based on availability for work.

Unemployment

The claimant count in Worcestershire in March 2013 decreased by 248 to 10,437, 927 lower than in March 2012.  This is 3.0% of the 16-64 population, which remains below the regional (4.7%) and national (UK also 4.7%) levels. 

The district with the highest proportion of claimants was Redditch (3.9%) whilst the greatest decrease in absolute terms (between March 2012 and March 2013) took place in Worcester with a fall of 258 claimants.  The urban centre with the highest proportion of claimants is Kidderminster with 4.4% and the lowest is Wythall at 1.8%.  In Worcestershire's urban areas the proportion of claimants is 3.5%, which is 0.5% higher than the county as a whole.

Long Term Unemployment

Those claiming Jobseekers Allowance between 6 and 12 months have decreased by 3.5 to 17.1% since March 2012 whilst those claiming for more than 12 months have increased by 4.1% over the same period to 22.2% of all claimants.  The number of people claiming for 6-12 months has declined due to them either finding employment or falling into the category of claiming for more than 12 months.

Unemployment by Occupation

The claimant count is not broken down by industry, but using data by occupation does give an indirect indication of the industries involved.  The greatest number of people are seeking employment within Elementary occupations, with 3,100 people (29.7%) seeking this occupation in March 2013.  This has shown no change in comparison to February 2013 though it has decreased by 100 claimants when compared with March 2012.

Claimants Leaving the Unemployment Count

2,090 people left the claimant count in March 2013, of those people 48.6% have found employment and a further 39.5% are either 'not known' or have 'failed to sign'; it is possible that some of these people have also found employment.

Youth Unemployment – Claimants Aged 18-24

In March 2013 the number of claimants aged 18-24 was 2,965, a decrease of 65 compared to February 2013 and 485 fewer than March 2012.  The proportion of claimants aged 18-24 is 7.2%, this is 0.3 percentage points higher than the England average.  The district with the highest proportion of claimants aged 18-24 was Wyre Forest (8.7%)and the greatest decrease in absolute terms (between March 2012 and March 2013) took place in Redditch with a fall of 140 claimants.

Business Confidence
The results of the Q1 2013 British Chamber of Commerce Economic Survey suggest welcome progress, however the improvements are modest.  The national confidence balances are much stronger than in the 2008-09 recession, but are below their
pre-recession levels in 2007.  Manufacturers' profitability confidence rose 3 points to 33% and turnover confidence increased by 3 points to 44%.  The service sector turnover confidence rose 2 points to 40% whilst profitability confidence remained steady at 22%.

Comments

Some comments on the national picture from a Chartered Institute of Personnel and Development briefing:

Neil Carberry, CBI director for employment and skills, commented: “The rise in unemployment is disappointing and reflects a lacklustre economy over recent months.

“However, the increase in the headline rate is due to more people looking for work, who weren’t previously doing so, rather than simple job losses. Numbers claiming unemployment benefits are still falling.

“The flat employment growth is down to a fall in part-time jobs. Full-time posts increased again this month, continuing the positive trend of recent months.”

 

Mark Beatson, chief economist at the CIPD, said: “This month’s figures have seen the recent period of sustained employment growth come to an end. The number of people in employment is very marginally down on the previous three month period, with full-time employment increasing but part-time employment falling. At the same time, with the population increasing and economic inactivity continuing to fall – which in itself is not a bad thing – this has led to a quite substantial increase in unemployment, up by 70,000 on the previous three month period.

“The question is whether this is a short term blip or whether a lack of demand means that the economy will struggle to create more jobs.”

Recruitment intentions, forecast in the CIPD’s Labour Market Outlook, are still positive, Beatson added, while redundancy figures have not changed significantly.

Therefore it would be “unwise to read too much into a single month’s figures” he said.

 

Kevin Green, chief executive of the Recruitment and Employment Confederation, said: “Although there has been an increase in a number of unemployed this month, all the indications and feedback we receive from recruiters show that businesses intend to hire more people this year. We expect to see slow growth in the jobs market over the coming months.”

‘The City and the Common Good: What kind of City do we want?’ - ‘Good People’

I recently went to an event at St. Paul’s Cathedral, which was the first of a series with the overall title, ‘The City and the Common Good: What kind of City do we want?’  This first event was about ‘Good People’; the others will be on ‘Good Money’ and ‘Good Banks’.  The Keynote speaker last week was Vincent Nichols, Archbishop of Westminster and formerly of Birmingham.  Also speaking were Peter Selby, Helena Kennedy and Tracey McDermott (Director of Enforcement and Financial Crime at the new Financial Conduct Authority).

Vincent Nichols quoted TS Eliot: "What life have you if you have not life together?  There is no life that is not in community..." but went on to say that you need to cultivate community and, reflecting Catholic Social Teaching, that in the recognition of both community and the holding of personal property the well-being of each is dependent on the other.  The danger with the City (of London) is that that a disconnection has grown up both of people in the City with each other and with those outside.

But, he argued, good people yearn for love, relationships, friendship and to make a difference.  This lies deep within us in sharing a common humanity and life of relationships, and to learn to live well is to learn the virtues – we act well because it has become habit for us.  Becoming people of virtue starts within the family but should also be inherent in our schools and universities (and in this case business schools); the institutions of commerce should nurture this with a clear sense of purpose focused on the wider common good.

Profit should be made by delivering a purpose that leads to human well-being (not as an end in itself), for unless you know the purpose you will never get the ethics right.  Business should be able to demonstrate how it is making the world a better place; so whilst employees need technical skills they must also be schooled in character and virtue.

His view that there are limits to law and regulation – they are a lazy proxy for morality – drew comment from the representative of the FCA who, whilst arguing they were necessary but not sufficient, said they needed to reflect underlying norms, though sadly in financial services this connection was not always made, so it is important to make society’s morals clear.  Vincent Nichols was, however, arguing for a fundamental transformation of purpose so that the banks and big business were at the service of society and he felt that (as the economist John Kay has said) it will take another financial crisis before the City wakes up to the scale of reform that is really needed.

He concluded by saying all this depends on the quality of leadership to draw out the good in people by their own actions: do they appeal to fear or greed, or to selflessness and a desire to serve the wider good?

Helena Kennedy in responding referred to Adam Smith’s ‘Theory of Moral Sentiments’ saying that markets are only good if there is good law and high ethical standards and that this has been squeezed out in many parts of our society because we have made money a measure of value and how we measure people.  She feared that there was still a sense in the City of waiting to get back to business as usual.  Peter Selby said that exhortation is not enough; there are issues of power here and an imbalance of effect.  And whilst schools of virtue are important we also need schools of resistance, to say ‘enough is enough’.

In response, Vincent Nichols referred to the virtues of courage and judgement and spoke again about the power of leadership for service, and in the discussion about the purpose of business, said that corporate social responsibility is about more than ‘reputational laundering’.  It should lie at the core of the business that should be about the quality of relationships with employees and their families, growth of employment, the quality of goods and services, the tax that is paid, as well as shareholder return.  In short, there needs to be a broader view of success.  But for this to be so, markets need a more personal connection to work properly, because business doesn’t operate in a vacuum, it depends on its context and on its connection with the society within which it operates.  Wealth creation is, however, good if it is for the right purpose.

Unsurprisingly, many in the audience were sympathetic to the tenor of the speakers' contributions but there seemed to be few practical suggestions about how they should be achieved, apart from the long-term of education from the Archbishop and Peter Selby's call for resistance.  A couple of questions made the point of the significant contribution of financial services to the economy and to tax paid, asking if we could afford to see this diminish.

Implied in Vincent Nichols views is that financial services should serve the needs of business and the economy rather than making money from money (so-called casino banking), which is a significant part of the City and which contributes to its disproportionate size relative to the economy as a whole.  Businesses run well along the lines suggested by the archbishop should make good profits in a longer-term and more sustainable way.  One has to ask if the over concentration of  resources in the London and the South East is not damaging to the rest of the country and its economic and social well-being.  Stephanie Flanders (the BBC's Economics Editor), who chaired the discussion, wrote a piece recently asking 'Should Britain let go of London?' showing how the gap is widening between London and the rest of the country and how economic and other policies are skewed by London-centrism.

In this week of Baroness Thatcher's funeral (which takes place in the same space as this debate that I am reporting upon) it has been pointed out by a number of commentators that the north-south divide which was already happening before she came to power has become more acute as a result of government policies (of all parties) over the past 30 years.  Mrs Thatcher's government was responsible for the 'Big Bang' de-regulating much of the City from its previously restrictive ways and contributing to its exponential growth.  But no one has been able to halt, let alone reverse the decline of manufacturing or find an effective policy to truly revive affected regional economies, and the present governments' attempts at rebalancing the economy towards manufacturing and exports have been ineffective.

To truly succeed may mean grasping some very difficult nettles including the deeply entrenched economic and political power of the City.  To get some idea of this see: 'Who Runs Britain?' by Robert Peston (2008), London, Hodder & Stoughton, which I have mentioned previously on a number of occasions.      

Unemployment February 2013 and How Should we Grow

I've summarised the lastest unemployment figures for the County, but also offer a warning about complacency and some thoughts on what kind of county we might want to be.

Unemployment

The claimant count in Worcestershire in February 2013 increased by 326 to 10,685 (3.1%), 1,134 lower than the number of claimants in February 2012. This is the lowest level since December 2008, however as expected the number has risen due to the decrease in seasonal work.

The district with the highest proportion of claimants aged 16-64 was Redditch (3.9%), whilst the greatest decrease in absolute terms (between February 2012 and February 2013) was in Worcester with a fall of 322 claimants.  The urban centre with the highest proportion of claimants is Kidderminster with 4.5% and the lowest is Wythall at 1.9%.  In Worcestershire's urban areas the proportion of claimants is 3.5%, which is 0.4 % higher than the county as a whole.

Long Term Unemployment

The proportion of claimants who have been receiving JSA benefit between 6 and 12 months has decreased by 5.1 % to 15.1% since February 2012. The proportion in receipt of JSA benefit for more than 12 months has increased by 5.3 % over the same period to 21.6% of all claimants. The number of people claiming for 6-12 months has declined due to them either finding employment or falling into the category of claiming for more than 12 months.

Claimants Leaving the Unemployment Count

2,600 people left the claimant count in February 2013, of those people 42.8% have found employment, a further 43.4% are either 'not known' or have 'failed to sign'; it is possible that some of these people have also found work.

Youth Unemployment – Claimants Aged 18-24

In February 2013 the number of claimants aged 18-24 was 3,030, an increase of 150 claimants compared to January 2013 but 570 fewer than in February 2012. The proportion of claimants aged 18-24 is 7.3%, 0.2 % higher than the England average. The district with the highest proportion of claimants aged 18-24 was Wyre Forest (9.0%). The greatest decrease in absolute terms (between February 2012 and February 2013) took place in Redditch with a fall of 195 claimants.  After a significant rise, the Worcestershire 18-24 claimant rate reached a peak in August 2009. It has since fallen with some seasonal effects related to Christmas and summer employment; however it is yet to reach pre-recession levels.

Some Comments

It has been consistently pointed out that Worcestershire’s unemployment figures are better proportionately that the West Midlands region (usually towards the bottom of the table of regions) and England or the UK. The exception is youth unemployment where we tend to be above the England proportion.  This hides some significant variations as the figures of the highest and lowest districts and more particularly urban centres shows.  Go to smaller areas and the differences are even more pronounced (for example, the area where I am associate minister has over 6% unemployment, whilst where I live two miles away is under 2%).

In overall terms Worcestershire’s situation may lead us to think that we’re not doing too badly and indeed there are signs that we are faring better than many in the recession.  But as Ahmed Goga, Worcestershire County Council’s Head of Economic Development and Strategic Planning, said at the Faith at Work in Worcestershire AGM this week, beneath the surface all isn’t quite as rosy as we would like to think.  This is shown in modest average incomes and gross value added, low levels of innovation in our industry and a failure to bring back young people who leave to go to university.  Whilst people with degree and equivalent qualifications are quite numerous, there is a high proportion with less than GSE standard education.  And there is a real problems for high tech firms in recruiting suitably skilled people – the right kind of engineering is where the demand is.

The thrust of Mr Goga’s argument is that whilst Worcestershire is a nice place to be, there is a danger of complacency which could lead to stagnation.  This is very much the tension at the middle of the debates in the genesis of the Next Generation Worcestershire programme: how to ensure economic prosperity whilst preserving those things that make the County a good place to live.

There is also a tension which was raised in the recent Worcester Diocesan Synod debate on the economy: how to balance necessary economic development alongside global environmental issues of pollution and resource depletion.

In this time when so much of the debate surrounding the economy and particularly the budget is about growth (almost at any price) it is important to hold onto a wider and longer perspective.  We may argue that love, compassion and justice among the Kingdom priorities that the Diocese of Worcester has embraced require a redistribution of the increasingly unequal shares of income and wealth that our economic system is giving to people.  However, whilst we must do what is possible within the County we also must be aware that in the system as it is we are (according to Mr Goga) in competition with the likes of Oxfordshire, Buckinghamshire and Northamptonshire, rather than the other parts of the West Midlands, and nobody may have told them about our difficulties with growth.  We must also be aware of the argument, also made in Next Generation Worcestershire, that prosperity is needed for the provision of those services we deem important to care for our increasingly ageing population.

The challenge, rather like that reported today of Lord Mandelson to the Labour leadership, is to work at a compelling alternative rather than repeat the critique.

Unemployment January 2013

Unemployment
Against the national trend that saw a decrease in unemployment in the UK between October and December 2012 of 14,000, taking the total down to 2.5m, and a reduction in the claimant count in January 2013 of 12,500 to 1.54m, the claimant count in Worcestershire increased by 505 to 10,359, or 3% of the 16-64 population.  This, though, is still 1,045 lower than the number of claimants in January 2012 and remains below regional and national levels.

The number of claimants in Worcestershire was at its lowest level since December 2008, however, as expected, the number has risen due to the decrease in seasonal work.  The greatest decrease in absolute terms (between January 2012 and January 2013) took place in Worcester with a fall of 348 claimants.  The district with the highest proportion of claimants aged 16-64 was Redditch (3.8%).  The urban centre with the highest proportion of claimants aged 16-64 is Kidderminster with 4.4% and the lowest is Wythall at 1.9%. In Worcestershire's urban areas the proportion of claimants aged 16-64 is 3.4%, which is 0.4% higher than the county as a whole.

Long Term Unemployment

The proportion of claimants receiving Job Seeker’s Allowance between 6 and 12 months has decreased by 4.8% to 15.1% since January 2012 but those claiming for more than 12 months have increased by 5.5 % over the same period to 21.8% of all claimants. The number of people claiming for 6-12 months has declined due to them either finding employment or falling into the category of claiming for more than 12 months.

Youth Unemployment – Claimants Aged 18-24

In January 2013 the number of claimants aged 18-24 was 2,880, an increase of 190 compared to December 2012 and 560 fewer compared to January 2012.  The proportion of claimants aged 18-24 is 7.0%, 0.2% higher than the England average.  The district with the highest proportion of claimants aged 18-24 was Wyre Forest (8.5%), whilst the greatest decrease in absolute terms (between January 2012 and January 2013) took place in Redditch with a fall of 180 claimants.  After a significant rise, the Worcestershire 18-24 claimant rate reached a peak in August 2009.  It has since fallen with some seasonal effects related to Christmas and summer employment; however, it is yet to reach pre-recession levels.

Comments

The Chartered Institute of Personnel and Development (the professional body for HR) said: ‘In line with the results of recent CIPD surveys, the UK jobs market strengthened significantly in the final quarter of 2012. However, the medium-term outlook remains less certain, as the public sector seems likely to continue to shed jobs and there are questions over the private sector’s ability to sustain this momentum unless economic growth resumes soon.’

Meanwhile, separate figures revealed that one in seven employees have been made redundant during the recession.  John Philpott, director of the Jobs Economist consultancy, said that around 3.5 million people had lost their jobs since the beginning of 2008. Of those, 63 per cent were men and 37 per cent were women.

‘For both men and women 2009 was the peak year for redundancies,’ Philpott added, ‘although in terms of share of total redundancies 2011 and 2012 have been the two worst years for women, reflecting public sector job cuts.’  (From CIPD members’ site)

Outlook

 Supporting the view above, thirty-five per cent of UK organisations are planning redundancies or considering job cuts this year, according to new research.  With the exception of Greece, this was a higher percentage than any other country in Europe, found the study by HR consultancy Aon Hewitt.  Of the UK organisations contemplating a reduction in headcount, 62 per cent were in service-based industries, the survey revealed.

Commenting on the survey results, Andrew Macleod, leader of Aon Hewitt’s pay research practice in the UK, said: 'The high potential figure for redundancies may stem in part from UK organisations feeling that they continually have to adapt and reorganise to remain competitive in what is still a volatile economic environment.' (From CIPD members’ site)

Flat GDP and Falling Unemployment

I have put together a précis below of the unemployment figures for Worcestershire for December 2012 from the monthly County Economic Summary.  This also contains helpful graphs and tables to illustrate the text.  As well as the national unemployment figures showing a continuing fall, which were also published last week, we had the GDP figures on Friday.

Flat GDP and Falling Unemployment

There have been a number of explanations of the disparity between flat GDP and falling unemployment.  A more interesting one can be found here, which suggests that whilst in manufacturing and particularly mining and quarrying, which are important to the UK economic output, production has fallen steeply, the numbers they employ are relatively low.  This is in contrast to the services sector, which has been holding up fairly well and creating jobs, though the trends in retail don’t look promising.  This site is linked to the TUC, so is critical of government policy even if it got this idea from the non-left-wing Economist.  Similarly, another TUC sponsored site shows that since the start of the recession the number of self-employed workers has increased by 333,000, the number of employees has fallen by 201,000.   It may also be the case that many of the self-employed roles may not be full-time even if they are counted as such in the figures.

Debt Still the Problem

Whatever the ups and downs of the GDP figures, we seem to be bumping along the bottom.  Some seem to think that 2013 will begin to see some improvement – certainly the stockmarkets seem to be acting as if they believe it and some in Davos also were talking up the outlook.  On the other hand, a deep analysis of the financial crash and its continuing consequences is provided by Robert Peston in his ‘How Do We Fix This Mess?  The Economic Price of Having It All and theRoute to Lasting Prosperity’.  It’s not a book for the faint-hearted.  If you think too much about what he says about the risks that were run by our bankers and the extent to which much remains to be fixed you won’t sleep well at night.

But his essential thesis is that we have run up huge amounts of debt in an enormous bubble that has yet to be deflated and until they are paid down the economy is going nowhere.  This isn’t just public-sector debt, indeed it is more about personal and private-sector debt.  Our banks have had to rebuild their capital ratios, which means they can lend much less and have become risk averse.  Individuals are paying down debt and borrowing less, so spending less.  But most of all the debt burden is still huge because ironically in our desire to reduce hardship many banks are exercising ‘forbearance’ on individuals with mortgages and loans they can’t repay and on much commercial property and other debt where crystallising losses would be very painful.  We have ‘zombie companies’ and ‘zombie banks’, many of which are kept alive by government and Bank of England support of the financial system.  By contrast in the US where you can walk away from an un-repayable mortgage  or go bankrupt and start again more easily, the economy is already back to pre-crash levels of GDP (we are still 4% below 2008 output in a recession longer than the 1930s) and will see higher growth this year.  We could argue about the pros and cons of Obama’s deficit budgets too but perhaps something of Schumpeter’s ‘creative destruction’ is necessary?

Peston's prescription is that we need to reduce our debt (in all sectors), and live within our means, which before the crash we patently were not doing - as individuals, corporately and as a nation, including our balance of payments, which has been out of kilter for decades.  We need to reduce the size of the City, which is too big for the overall size of our economy and diverts too much money into unproductive rent-seeking (i.e making money from money for its own sake) and instead using banks for what they are supposed to be for, which is to invest in productive industries that produce real goods and services that people need.  This would also have the effect of moving talented people into more useful jobs at more sensible salaries, also for the benefit of the wider economy and might contribute to reducing the growing north-south divide.  However, this may require us to be prepared to take some pretty strong medicine, given that the declared policy of most of our political parties, including those in government, is to rebalance the economy and pay down (at least some parts of) the debt, and there has been precious little progress so far.

It seems to me that this is a profoundly moral issue, but how does one say it without sounding moralising?  If I can take that risk and be slightly 'theological', as that is what this blog is supposed to be impicitly or sometimes explicitly, those of us who have been reading Amos and Hosea at morning prayer over these past couple of weeks can hardly fail to have noticed the similarities between what the prophets were/are saying to Israel and Judah and the state of our nation after the almighty bender of the pre-crash years that some still refuse to believe or act as if it is over for them.

And now to the reality of all this.        

Unemployment

The claimant count in Worcestershire in December 2012 decreased by 260 to 9,854, and was 875 lower than December 2011.  This is 2.8% of the 16-64 population, which remains below the regional and national levels.  The number of claimants is now at its lowest level since December 2008; however this number is expected to rise slightly next month when the January figures are released due to the decrease in seasonal work.  The greatest decrease in absolute terms (between December 2011 and December 2012) took place in Redditch and Worcester with a fall of 257 and 295 claimants respectively.

The district with the highest proportion of claimants aged 16-64 was Wyre Forest (3.6%).  The urban centre with the highest proportion of claimants aged 16-64 is Kidderminster with 4.2% and the lowest is Wythall at 1.6%. In Worcestershire's urban areas the proportion of claimants aged 16-64 is 3.2%, which is 0.4% higher than the county as a whole.

Long Term Unemployment

The proportion of claimants who have been in receipt of JSA benefit between 6 and 12 months has
decreased by 6.0 % to 15.1% since December 2011 whilst those claiming for more than 12 months have increased by 6.9 percentage points over the same period to 22.4% of all claimants. The number of people claiming for 6-12 months has declined due to them either finding employment or falling into the category of claiming for more than 12 months.

Unemployment by Gender

During the recession the male claimant count rate increased at a faster pace than the female rate.  Post-recession the male rate began to fall again, although not back to pre-recession levels, whilst the female rate has remained at the higher level.

Unemployment by Occupation

The claimant count is not broken down by industry, but using data by occupation does give us an
indirect indication of the industries involved.  In terms of overall numbers the greatest decrease in claimants compared to December 2011 has been in Elementary occupations (180) and Administrative and Secretarial Occupations (175).  In percentage terms, the largest decrease was in Professional occupations (28.4%).

Claimants Leaving the Unemployment Count

2,605 people left the claimant count in December 2012, of those people 49.1% have found employment and a further 38.4% are either 'not known' or have 'failed to sign'; it is possible that some of these people have also found employment.

Youth Unemployment – Claimants Aged 18-24

In December 2012 the number of claimants aged 18-24 was 2,690 which is a decrease of 185 compared to November 2012 and 555 fewer claimants compared to December 2011. The proportion of claimants aged 18-24 is 6.5%, 0.1% lower than the England average.  The district with the highest proportion of claimants aged 18-24 was Wyre Forest (8.1%) and the greatest decrease in absolute terms (between December 2011 and December 2012) took place in Redditch with a fall of 185 claimants.

After a significant rise, the Worcestershire 18-24 claimant rate reached a peak in August 2009.  It has since fallen with some seasonal effects related to Christmas and summer employment; however

it is yet to reach pre-recession levels.   It is important to reduce the number of 18-24 year olds in unemployment, as it affects people at the very start of their working lives. A period of unemployment at this stage increases the likelihood of an individual becoming disengaged from the labour market and impacting their lifetime earnings potential.

Worcestershire Unemployment, and Earnings, November 2012

The figures and analysis about Worcestershire below are taken from the County Council’s December 2012 County Economic Summary.  This has been revised in format and to some extent content and I have taken what I think are the salient points, having in some places précised them slightly.

Headline Figures

The claimant count in Worcestershire in November 2012 decreased by 203 to 10,114, 552 lower than the number of claimants in November 2011.  This is 2.9% of the 16-64 population, which remains below the regional and national levels. The greatest decrease in absolute terms (between November 2011 and November 2012) took place in Redditch and Worcester with a fall of 205 and 206 claimants respectively.

The urban centre with the highest proportion of claimants aged 16-64 is Kidderminster with 4.2% and the lowest proportion is in Wythall at 1.6%. In Worcestershire's urban areas the proportion of claimants aged 16-64 is 3.3%, which is 0.4% higher than the county as a whole.

After a significant rise (from around 1.5%), the Worcestershire claimant rate reached a peak in April 2009. Since the middle of 2010 the proportion of claimants has stabilised around 3.1%, with some seasonal effects related to Christmas and summer employment.

Long Term Unemployment

The proportion of claimants who have been receiving of Job Seekers Allowance between 6 and 12 months has decreased by 7.7 percentage points to 14.7% since November 2011. It is now the lowest that it has been since December 2010 but the proportion receiving JSA for more than 12 months has increased by 7.9 percentage points over the same period to 22.3% of all claimants.  The number of people claiming for 6-12 months has declined due to them either finding employment or falling into the category of claiming for more than 12 months.

If a person is unemployed for an extended period of time there is an increasing likelihood of them becoming disengaged from the labour market.

Claimants Leaving the Unemployment Count

2,435 people left the claimant count in November 2012, of those people 46.2% have found employment and a further 40.9% are either 'not known' or have 'failed to sign'; it is possible that some of these people have also found employment.

Youth Unemployment – Claimants Aged 18-24

In October 2012 the number of claimants aged 18-24 was 2,875 which is a decrease of 135 compared to October 2012 and 340 fewer compared to November 2011. The proportion of claimants aged 18-24 is 6.9%, the same as the England average but below the West Midlands average (8.7).

The districts with the highest proportion of claimants aged 18-24 were Redditch (7.9%) and Wyre Forest (8.5%), the greatest decrease in absolute terms (between November 2011 and November 2012) took place in Redditch with a fall of 160 claimants.  The figures for individual wards are no longer so easily available but I am happy to find them should anyone want them.

After a significant rise, the Worcestershire 18-24 claimant rate reached a peak in August 2009 though it has since fallen with some seasonal effects related to Christmas and summer employment; however it is yet to reach pre-recession levels.  It is important to reduce the number of 18-24 year olds in unemployment, as it affects people at the very start of their working lives. A period of unemployment at this stage increases the likelihood of an individual becoming disengaged from the labour market and impacting their lifetime earnings potential.

National Picture

For information about the national picture see the BBCreport here.  This shows that Worcestershire broadly follows the national picture, though we are generally in a better position. However, one should never overlook those places that are more significantly impacted and the effect on individuals wherever they are.

The BBC’s Economics Editor, Stephanie Flanders, has an interesting analysis of the national figures here.  One would hope that there has been some pre-Christmas hiring (which may well be temporary) and this may be contributing to improved figures and sentiment.  On the other hand, as Flanders points out, comparing the July to September quarterly unemployment figures with the June to August figures rather than the April to June figures shows the fall in unemployment is much lower and may be reflected in the claimant count figures which tend to be more sensitive.  Not wishing to throw too much cold water on the headline good news, one also notes that the OBR are predicting unemployment to rise to 8.2% before falling at some point in the cycle (as compared with 7.8% now) so a reverse of the trend is on the cards at some point.

Earnings

Flanders also makes the point about lower real earnings and I saw elsewhere attention drawn to a speech on 12 December given by Spencer Dale, Chief Economist at the Bank of England, who notes the “extraordinary flexibility” shown in the labour market. Real wages, measured in terms of consumer prices, have fallen by over 15% compared with the pre-crisis trend. So “no wonder that people are finding life tough”.  Many of us have had below inflation pay-rises, but for those who are underemployed in the current terminology (i.e. are working less or in poorer paid jobs than they would like) are the ones most affected by this trend.  Declining productivity in the economy (i.e. taking more people to produce goods that used to be the case) may be a worry for economists and perhaps for the economy of the country in the long-term if the trend is not reversed, but it has a very direct impact on the individuals affected in the present.  Dale also says:  “The harsh but inescapable reality of these developments – and the real adjustments they necessitate – is that households and families in our economy are worse off. Much worse off.” “The less we produce” and the less “we can purchase using the proceeds from our domestically produced output”, “the less we can ultimately consume”.  It is a matter of judgement whether the trade-off of some or maybe many people taking a cut in earnings is better than the higher unemployment that has been seen in previous recessions.  And the longer the debts, both private and public takes to unwind so that the longer the recession lasts the harder these effects become for the people affected.

Unemployment and the Economic Outlook for Worcestershire for October 2012

The Local Position

Unemployment in Worcestershire dropped slightly last month on the claimant count – by 121 to 10,317.  This was not sufficient to change the percentage unemployed since last month, which still stands at 3.0% on the ONS method of calculation, though it is a 0.2% fall on 12 months ago.  Most of the detail figures are similar to previous months so I don’t propose to repeat them, except to say that, in line with recent national trends, youth unemployment has been falling for a few months and now stands at 14% in the worst affected wards compared with approaching 20% some time back.  This is also having the effect of bringing some areas not previously in the top ten list into the picture.   For more detail on this (see p.22) and other figures go to the County Economic Summary.

Long-term unemployment last month decreased by 1.2 % to 37.6% for those claiming benefits for more than six months and by 0.3% to 22.5% for those claiming over 12 months.  This is against a national trend where the headline rates in this area have increased.  More detail on the national figures can be found here.

National Picture

What I felt to be a helpful analysis of the current national position was offered by Gerwyn Davies, the Chartered Institute of Personnel and Development labour market adviser, who said:

“Employers have continued to focus on keeping labour costs down and a combination of pay restraint and a higher proportion of part-time and temporary work has enabled them to take on more staff.

“Of particular note this month is the disproportionately large increase in part-time employment. Almost half of the employment increase is due to part-time employment, and almost all of this increase is accounted for by women.

“Despite the positive headline figures, the high proportions of part-time and temporary work suggest that many employers remain cautious about adding to their long-term cost base. Business confidence has improved in recent months but is still fragile.

"So while we may see further short-term increases in employment - as indicated in CIPD’s Labour Market Outlook – it may be some time before this translates into the permanent positions that most job-seekers prefer.”

Economic Outlook

I want to use the rest of this piece to focus on the economic outlook.  Mervyn King’s widely reported views about the long and winding road with regard to the national outlook can be found here.  However, I now receive the Hereford and Worcester Chamber of Commerce quarterly economic briefing and so I will try to summarise what that says about business prospects more locally.  You can read the full document here.

Whilst the National trend shows that the economy is 'stagnant' and growth is 'weak', the third quarter of 2012 results locally show 'stability' and more positive results for the manufacturing sector.

Nationally, orders fell but locally there has been a small increase in orders, especially in manufacturing, though service sector orders decreased.  The local domestic sales 'balance' (i.e. those firms reporting an increase in sales compared with those reporting a decrease) is the same as the last quarter, although the increase in domestic sales is slightly lower than last quarter and both manufacturing and service sectors show a drop in sales.

Whilst exports have weakened nationally, the figures are more promising locally, with an increase in export sales for manufacturing although a decrease within the service sector. The overall local ‘balance’ for exports has increased.

Nationally firms are less confident in taking on staff but locally there has been more confidence. There has been an increase in workforce and attempts to recruit with an increase in full-time and permanent positions which is encouraging.

Investment in plant and machinery remains very low in both the service and manufacturing sectors with investment remaining unchanged, however, investment in training has increased, which is encouraging.

Business confidence continues to show 'uncertainty' and is lower than the last quarter with both turnover and profitability lower.  However, there is a slight improvement in businesses operating at full capacity but there is uncertainty within manufacturing with a high percentage operating below full capacity.

Pressure to raise prices has dropped with both manufacturing and service sectors expecting prices to remain unchanged.  Businesses locally are concerned about competition, inflation and corporation tax. Nationally, inflation remains a concern for businesses in both sectors.

Conclusion

Whilst this is very much a summary of what are quite complex figures (essentially firms are asked about a range of figures and their views and expectations and whether they are more confident less confident or feel the same) it would appear that locally across Hereford and Worcestershire that the picture is slightly more encouraging than the national situation.  This would correlate with our better than both national and regional figures for unemployment.  It would also be consistent with our having less ‘old’ manufacturing than other parts of the West Midlands, which is suffering more both long-term and in this recession.  However, whilst Worcestershire is holding its own on figures such as Gross Value Added with Herefordshire and Staffordshire, it is some way behind other shire neighbours such as Gloucestershire and Warwickshire and there are concerns about our ability to keep up.

I have been doing some supporting work for a project called ‘Next Generation Worcestershire’, which raises some serious questions about the need for continuing to increase prosperity and for what purpose.  It will hopefully be published shortly for debate amongst ‘leaders’ in the County.  If it is possible, it would be important for church people/’leaders’ to be able to respond to the questions it raises.

Unemployment in September 2012

Overall Picture

Unemployment fell slightly in Worcestershire last month from 10,637 to 10,468, a drop of 169 claimants, though the change is small enough for the percentage to remain unchanged on the ONS system of calculation at 3.0%.  (On the County Council’s basis, which I have previously used in these briefings the rate has fallen from 3.8 to 3.7%).  Using the ONS figure should hopefully aid more accurate comparison with regional and national figures with the health warning that the more widely quoted regional and national figures are the people available for work, not the claimant count which is used here.

Regional and National Position

This small decrease is consistent with a further modest fall nationally, though according to news broadcasts, the West Midlands region again showed a slight increase in the headline figure but a very small fall in the claimant count (down 1,274 to 163,392 and 6.6%).  There is more information about the national picture here and a further discussion of why unemployment appears to be fallingand the total number of people employed is rising even though we have been in a double dip recession.  It seems to revolve around a number of people working part-time who would rather work full-time, some who are self-employed or contractors who may be classed as full-time but are not actually working that many hours, though the notion of labour-hoarding by employers is now dismissed as they couldn’t afford to keep this up for so long.  Stephanie Flanders, the BBC’s economics editor, also writes about why unemployment hasn’t been ashigh in this recession as in previous ones – because many of us have taken wage cuts and the afore-mentioned reduced hours so the pain has been spread more widely rather than on a smaller number who have lost their jobs.

Local Figures

The total number claiming Job Seeker’s Allowance has fallen by 792 since the same month last year with the largest falls in Redditch (274), Worcester (184) and Malvern Hills (118).  As with last month, the district with the highest claimant count Worcester at 3.7% on the ONS basis and the lowest is Malvern Hills at 2.2%.  As far as urban centres are concerned the highest is again Kidderminster at 5.2% on the County’s slightly different basis that seems to be about 25% higher than the ONS figures, and the lowest is still Wythall at 1.8%.

Young People

The number of young people aged 18-24 claiming JSA fell to 3,090 from 3,130 in August and 3,465 in September last year.  Of the 3,090, 2,640 have been claiming up to one year, which means that 450 (14.7% of the total) have been claiming for more than a year.  Whilst it remains that the ten wards in the County that have the highest 18-24 unemployment are fairly predictably those which appear high up the various deprivation indices it is also the case that some others have recently appeared.  This may be because the level of youth unemployment has been slowly falling so that some of these other places are starting to have percentages similar to those that appear regularly.  It is also true that we are dealing with quite small numbers so any variation can have more marked effect than if the numbers were bigger.  Further information can be found on page 21 of the September County Economic Summary.

Long-term Unemployment

The male rate of unemployment increased rapidly at the beginning of the recession (from just over 2% in 2008 to 5.5% in 2010).  It has since dropped to 4%.  However, the female rate increased more slowly from around 1% in 2008 to 2% in 2010 but has remained more or less constant since then, and is currently just above 2%.  Long-term (overall) unemployment has fallen for those claiming benefit for more than six months by 2% to 38.8% but the figure for those claiming for more than 12 months has increased by 0.2% to 22.8%.

Vacancies

The number of vacancies in the County has gone up to 6,459 in September   from 5,143 in August and 3,737 in the same month last year.  Whether this is yet a trend may be a little early to say, but it may reflect the more positive picture nationally of increasing employment.

This Blog

It is some time since I posted anything on this blog and I’ve written a separate piece to explain why and to invite comments about its usefulness.  I’d be interested to know what you think.

This Blog

I haven’t posted anything on this blog for a while, partly because I have recently taken up a course of further study and that has been taking my energy in getting to grips with what it involves, but largely because after a year of writing and some questioning with colleagues about how best to communicate through social media, etc. I feel it is time for some re-evaluation.

There is the question of whether a blog is the best way to communicate or if some other social media would be better.  I have been encouraged, more than I might have expected from some quarters, that this is worth-while; but whilst some posts get a lot of hits – some predictably because they mention something/somebody well known, some for reasons I can’t quite fathom – others get no more than a handful.  The latter, I think, say something worthwhile, otherwise I wouldn’t bother writing them but it does make one question the use of the time needed.

So, is a blog the best way to communicate?  If it is, there is the question of style and content.  If it continues, I will do my best to make the style more accessible.  One or two people have said they find it difficult to understand.  If that isn’t just about style then what about the content?  I have tried to pitch it as a thoughtful and sometimes challenging comment on current economic and related subjects from a Christian perspective.  It doesn’t aim to be academic because that’s not where I’m coming from and not where I think the audience is but maybe it still assumes a level of understanding of economics or other subjects that not everyone is comfortable with.

I’d be interested in comments, both constructive criticism and well as any encouragement.  The aim is to inform and stimulate thought and perhaps debate across the area of a Christian approach to economic matters, which is what I’m most interested in, but also the wider issues connected with my work with Faith at Work in Worcestershire and now the Committee for Agriculture and Rural Life.  I look forward with interest to any feedback, either through the comment button on the blog site or by email, etc.

UK and Worcestershire Unemployment in August 2012

Unemployment fell in the UK last month on both the broader headline figure and the claimant count.  The West Midlands region bucked the national trend with an increase in unemployment and so did Worcestershire.  The increases are not large but they point to the suspicion in the articles above that some of the national increase is attributable to London and the South East and to an Olympic Games effect.  It remains to be seen what will happen in coming months and how much temporary employment there is in the run-up to Christmas.

There still seems to be a discrepancy between recessionary GDP figures (even if slightly better in the recent revision to - 0.5% instead of - 0.7%) and employment growth.  The numbers of people in employment do seem to include quite high numbers of people working in temporary positions, part-time when they would rather work full-time and people who are self employed but who may not be getting a lot of work.  Nationally, there has been a slight increase in the number of women employed compared with a slight drop for men, but in Worcestershire there has been a slight increase in women’s unemployment (by 0.1%), though there is not enough detail in the figures to be able to say more.

Nationally, there has been an increase in the numbers employed in the private sector and a drop in the public sector, though this is masked to some extent by a recent change of classification of those working in FE from public to private and the speed of drop in numbers in the public sector has been slowing.  However, talking to those working in the public sector, the future depends very much on what the spending settlement for 2013 onwards looks like.

From Worcestershire County Council’s County EconomicSummary, the unadjusted Job Seeker’s Allowance unemployment total for Worcestershire was 10,607 in August 2012, an increase of 62 claimants from the previous month but down 680 (Redditch down 223, Worcester down 202) compared with a year ago. The county rate of 3.8% is unchanged from last month and compares with the West Midlands region (6.6%) and England and Wales (5.4%).  Across the county, the district with the highest unemployment rate is Worcester (4.8%) and the lowest is Malvern Hills, (2.9%).  In terms of urban centres, Kidderminster had the highest unemployment rate at 5.3% and the lowest was in Wythall (1.8%).

The male unemployment rate in Worcestershire is 4.6% (unchanged from last month), compared to the female rate of 2.9% (up by 0.1%).  There has been a small fall in the proportion of claimants claiming benefit for more than six months – 0.1% to 40.8% but those claiming over 12 months have increased by 0.6% to 22.6% between July 2012 and August 2012.  Last month 3,130 people aged 18-24 were claiming JSA benefit compared to 3,085 in July and 3,450 in August last year.  Of the August number 2,685 that had been claiming for up to one year. This is 6.5% of the 18-24 population, and is still higher than the England average.  There is considerable variation across the county, though the ten wards with the highest rates shown in the Economic Summary tend to be in the list most if not every month, but none the less, there does seem to have been a drop in numbers just recently.  Whether this will continue into the new academic year remains to be seen.

The number of notified vacancies in Worcestershire was 5,143 in July 2012. This is 28.4% higher than in July 2012.  This is significantly greater than the change month on month last year, but the figures do change quite significantly month on month so it is difficult to be sure of trends.