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Unemployment at record low but wages continue to fall – ONS

Unemployment at record low but wages continue to fall – ONS
3 min read

The unemployment rate fell to its lowest level since 1975 in the last quarter, but wages continued to lag behind inflation.


There were 57,000 fewer people out of work from April to June compared to January to March, leaving the overall unemployment rate at just 4.4%.

That amounted to 1.48 million unemployed people – those seeking work and available to work – 157,000 fewer than a year before.

The figures also revealed a record high in employment, with 125,000 more people in work than for January to March 2017 and 338,000 more than for a year earlier.

The employment rate - the proportion of people aged from 16 to 64 who were in work - stood at 75.1%, the highest since comparable records began in 1971.

But while weekly earnings rose by 2.1% compared to a year earlier, when taking inflation into account, wages dropped by 0.5% compared with the same period.

It comes a day after official data showed inflation remained unchanged in July at 2.6%.

Shadow Work and Pensions Secretary Debbie Abrahams welcomed the rise in employment but  said the real term fall in wages left her party “deeply concerned”.

“With wages continuing to fall in real terms, Tory cuts to in-work support, and rising prices, many households and families are worse off under this government,” she said. 

“The Government has failed to close the employment gap faced by women, disabled people and ethnic minority groups, who are still less likely to be in work, and has failed to tackle regional inequalities in the Labour market.” 

'TOXIC COMBINATION'

The figures also revealed a modest fall in the number of people on zero hours contracts, to 883,000, a fall of 20,000 from the year before.

TUC General Secretary Frances O’Grady said the stagnation of wages while prices are on the rise represented a “toxic combination”, while the government needed to “crack down” on contracts with no minimum hours.

“Ministers are sitting on their hands as another living standards crisis unfolds. It’s time to boost wages by scrapping the pay restrictions in the public sector, investing in infrastructure, and increasing the minimum wage.”

On zero-hour contracts, she added: “Far too many people are still being treated like disposable labour, stuck on contracts with little security or certainty.

“Today’s figures show that zero-hours contracts won’t disappear by themselves. It’s time for the government to crack down on dodgy employment deals and ban these type of contracts.”

The number of economically inactive people – those not working and not seeking or available to work – stood at 64,000 fewer than for January to March 2017.

Employment Secretary Damian Hinds told Sky News: “Average household income’s at a record level, and that is of course largely because more people are in work.

“We’ve also got fewer people for example who are involuntarily in part time work who would rather have more hours, and people are also developing in their careers and all that is very important,

“But of course we also acknowledge the cost of living and the pressures people face, that’s why or part of the reason why we’re doing things like bringing people out of tax altogether, giving a tax cut for 31 million people through rises in the personal allowance and things like the really big investment going into childcare, an extra £1bn a year going into childcare…”

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