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You can find the current article at its original source at https://www.theguardian.com/business/live/2017/feb/15/uk-unemployment-wages-brexit-greece-janet-yellen-business-live
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| UK real wage growth hits two-year low - business live | UK real wage growth hits two-year low - business live |
| (35 minutes later) | |
| 12.07pm GMT | |
| 12:07 | |
| The Joseph Rowntree Foundation have seized on today’s wage figures to hammer home their warning that millions more people risk being dragged into poverty by rising inflation. | |
| JRF says: | |
| “Record employment in the economy is welcome and work has to be the best route out of poverty. But we know employment alone will not always help people reach a decent standard of living. | |
| “Our analysis today shows four million more people over the last six years have fallen below a decent leaving standard, meaning they are struggling to make ends meet. | |
| “Tackling the high cost of living is crucial to helping just managing families, particularly with a challenging outlook: inflation is likely to average 2.6% this year, in sharp contrast to the very low inflation of recent times. | |
| “Government focus on modest incomes is welcome, but there is a fine margin between just managing today and poverty tomorrow.” | |
| Read our respone to today's employment figures: We need to tackle the high cost of living to support #justmanaging https://t.co/ECtHUHHq5b pic.twitter.com/kYCv2vl1sQ | |
| JRF’s report on the millions of ‘Just about managing’ families who don’t earn enough for a decent standard of living has caused quite a stir today. | |
| It shows that some 30% of the population, or 19 million people, are living below the nationally-recognised minimum income standard (MIS) -- defined as having enough money to afford adequate housing, food and clothes. | |
| Here’s our take: | |
| And here’s Jo Michell, economics lecturer at Bristol Business School: | |
| This doesn't tally with the 'inequality isn't getting worse' narrative. https://t.co/jzJB9zZCvq pic.twitter.com/VmC4b4p6Sj | |
| 11.48am GMT | |
| 11:48 | |
| Sam Tombs, economist at Pantheon, flags up that employment growth has slowed. | |
| Lots of talk of a "resilient" lab market since the Brexit vote. Hard to square that with halving of jobs growth and Dec's 1.9% wage growth pic.twitter.com/0BQD2NGDs3 | |
| As mentioned earlier, the UK created another 37,000 jobs in the last quarter. That’s the weakest performance since the second quarter of 2015. | |
| 11.34am GMT | 11.34am GMT |
| 11:34 | 11:34 |
| This chart, from Eshe Nelson of Quartz, shows how real wage growth has slowed as inflation (in purple) catches up with earnings growth (in blue). | This chart, from Eshe Nelson of Quartz, shows how real wage growth has slowed as inflation (in purple) catches up with earnings growth (in blue). |
| I have been obsessively watching this chart for months. Clearly a glutton for punishment. #paysqueeze #realwages #brexit pic.twitter.com/L8uUURAOsC | I have been obsessively watching this chart for months. Clearly a glutton for punishment. #paysqueeze #realwages #brexit pic.twitter.com/L8uUURAOsC |
| Real wages are only growing if the blue line is above the purple one -- something that didn’t happen between 2010 and 2014. | Real wages are only growing if the blue line is above the purple one -- something that didn’t happen between 2010 and 2014. |
| 11.20am GMT | 11.20am GMT |
| 11:20 | 11:20 |
| There could be serious implications for the UK economy if inflation keeps biting into wages, taking real wage growth below today’s two-year low. | There could be serious implications for the UK economy if inflation keeps biting into wages, taking real wage growth below today’s two-year low. |
| A real pay squeeze could hurt consumer spending, which has been driving growth since the EU referendum. | A real pay squeeze could hurt consumer spending, which has been driving growth since the EU referendum. |
| Andrew Sentance, senior economic advisor of PwC, explains: | Andrew Sentance, senior economic advisor of PwC, explains: |
| With wage growth relatively subdued and consumer price inflation now up to 1.8% and set to rise further towards 3% by the end of 2017, the healthy real earnings growth we saw in 2015 and most of 2016 could soon be a thing of the past. | With wage growth relatively subdued and consumer price inflation now up to 1.8% and set to rise further towards 3% by the end of 2017, the healthy real earnings growth we saw in 2015 and most of 2016 could soon be a thing of the past. |
| “This is likely to take the edge off consumer spending growth later this year and into 2018, which has been the main source of resilience in the UK economy since the Brexit vote. | “This is likely to take the edge off consumer spending growth later this year and into 2018, which has been the main source of resilience in the UK economy since the Brexit vote. |
| Employment growth is slowing and real wages are being squeezed. Latest @PwC_UK comment on UK labour market data: https://t.co/BlJGIJciDb | Employment growth is slowing and real wages are being squeezed. Latest @PwC_UK comment on UK labour market data: https://t.co/BlJGIJciDb |
| 11.00am GMT | 11.00am GMT |
| 11:00 | 11:00 |
| CIPD: Cracks appearing in UK labour market | CIPD: Cracks appearing in UK labour market |
| Gerwyn Davies, Labour Market Adviser at the CIPD, the professional body for HR and people development, is concerned by the fall in real wage growth: | Gerwyn Davies, Labour Market Adviser at the CIPD, the professional body for HR and people development, is concerned by the fall in real wage growth: |
| “The record number of people in employment is, of course, good news. However there are a number of underlying factors that remain problematic, for example the fall in real wage growth from 1.7% to 1.4% over the last three months. This is especially concerning given the prospect of rising inflation in 2017. | “The record number of people in employment is, of course, good news. However there are a number of underlying factors that remain problematic, for example the fall in real wage growth from 1.7% to 1.4% over the last three months. This is especially concerning given the prospect of rising inflation in 2017. |
| Davies is also struck by the drop in EU nationals working in Britain (see 9.57am post). It’s a sign that the EU referendum result is now having an impact on the economy, he agues: | Davies is also struck by the drop in EU nationals working in Britain (see 9.57am post). It’s a sign that the EU referendum result is now having an impact on the economy, he agues: |
| “The figures also offer further evidence that Brexit has had a discernable impact on the allure of the UK as a place to live and work. The sharp growth in the number of non-UK nationals from the EU in work in the UK ground to a sudden halt in the second half of the year and has actually fallen in the last quarter. | “The figures also offer further evidence that Brexit has had a discernable impact on the allure of the UK as a place to live and work. The sharp growth in the number of non-UK nationals from the EU in work in the UK ground to a sudden halt in the second half of the year and has actually fallen in the last quarter. |
| “As a result, employers in sectors that employ relatively large numbers of EU nationals, which also account for a sizeable proportion of vacancies, are likely to come under further recruitment pressures if, as we expect, this trend continues. As our Labour Market Outlook showed, the demand for labour is likely to remain strong in the near-term, which is reflected by the high number of vacancies reported in this month’s figures.“ | “As a result, employers in sectors that employ relatively large numbers of EU nationals, which also account for a sizeable proportion of vacancies, are likely to come under further recruitment pressures if, as we expect, this trend continues. As our Labour Market Outlook showed, the demand for labour is likely to remain strong in the near-term, which is reflected by the high number of vacancies reported in this month’s figures.“ |
| 10.49am GMT | 10.49am GMT |
| 10:49 | 10:49 |
| These charts from Resolution also show how real earnings growth has slowed.... | These charts from Resolution also show how real earnings growth has slowed.... |
| Real pay growth dropped to 1.4% in December, its lowest level in almost two years. pic.twitter.com/mQ7ZOeuGz6 | Real pay growth dropped to 1.4% in December, its lowest level in almost two years. pic.twitter.com/mQ7ZOeuGz6 |
| ...and how the average worker has never reclaimed the pay growth lost in the financial crisis. | ...and how the average worker has never reclaimed the pay growth lost in the financial crisis. |
| The pay growth slowdown comes with weekly earnings still £21 below their peak – pushing out the point of recovery still further. pic.twitter.com/5sPfxe2v0T | The pay growth slowdown comes with weekly earnings still £21 below their peak – pushing out the point of recovery still further. pic.twitter.com/5sPfxe2v0T |
| 10.47am GMT | 10.47am GMT |
| 10:47 | 10:47 |
| Resolution: Real pay growth will keep falling | Resolution: Real pay growth will keep falling |
| The Resolution Foundation has bad news for UK workers -- they think the squeeze on wages will continue this year. | The Resolution Foundation has bad news for UK workers -- they think the squeeze on wages will continue this year. |
| With inflation set to keep rising, real pay rises will be dragged below the 1.4% reported today. | With inflation set to keep rising, real pay rises will be dragged below the 1.4% reported today. |
| Resolution’s latest pay projection show that real pay growth is set to fall to around 1 per cent next month, less than half the pre-crisis average of 2.2 per cent. | Resolution’s latest pay projection show that real pay growth is set to fall to around 1 per cent next month, less than half the pre-crisis average of 2.2 per cent. |
| Laura Gardiner, Senior Policy Analyst at the Resolution Foundation, explains: | Laura Gardiner, Senior Policy Analyst at the Resolution Foundation, explains: |
| “Today’s figures show the jobs market remains robust, with employment reaching a new record high and inactivity starting to fall again. | “Today’s figures show the jobs market remains robust, with employment reaching a new record high and inactivity starting to fall again. |
| “However, the encouraging news on jobs isn’t feeding through into earnings, which have shown no sign of responding to fast-rising inflation. Unless this changes Britain is set for a fresh pay squeeze later this year. | “However, the encouraging news on jobs isn’t feeding through into earnings, which have shown no sign of responding to fast-rising inflation. Unless this changes Britain is set for a fresh pay squeeze later this year. |
| This chart shows their latest forecasts: | This chart shows their latest forecasts: |
| Professor Geraint Johnes, Director of Research at The Work Foundation – part of Lancaster University - also fears that wages are being squeezed by the rising cost of living. | Professor Geraint Johnes, Director of Research at The Work Foundation – part of Lancaster University - also fears that wages are being squeezed by the rising cost of living. |
| He says: | He says: |
| The rate of price inflation may soon outstrip wage growth, putting a squeeze on wages. Indeed, the single month figure exceeds 2.5% only in construction.” | The rate of price inflation may soon outstrip wage growth, putting a squeeze on wages. Indeed, the single month figure exceeds 2.5% only in construction.” |
| 10.25am GMT | 10.25am GMT |
| 10:25 | 10:25 |
| UK real wage growth hits two-year low | UK real wage growth hits two-year low |
| Today’s report also shows that real wage growth in the UK economy has now fallen to a two-year low, putting more pressure on households. | Today’s report also shows that real wage growth in the UK economy has now fallen to a two-year low, putting more pressure on households. |
| That’s because average earnings only rose by 2.6% in October-December, while inflation averaged 1.2% over the quarter (and has climbed to 1.8% in January!). | That’s because average earnings only rose by 2.6% in October-December, while inflation averaged 1.2% over the quarter (and has climbed to 1.8% in January!). |
| That means real wages, accounting for inflation, only rose by 1.4% in the last year. | That means real wages, accounting for inflation, only rose by 1.4% in the last year. |
| The TUC is urging the government to take more action - including ending the pay squeeze on public sector workers. | The TUC is urging the government to take more action - including ending the pay squeeze on public sector workers. |
| TUC General Secretary Frances O’Grady says: | TUC General Secretary Frances O’Grady says: |
| “With prices rising faster, real pay growth is now slowing down. This will be worrying for families whose have still not seen their living standards recover following the financial crisis. | “With prices rising faster, real pay growth is now slowing down. This will be worrying for families whose have still not seen their living standards recover following the financial crisis. |
| “Next month’s Budget must set out a clear plan for preventing another fall in living standards. The Chancellor should tackle insecurity at work, invest in infrastructure and skills, and end the current pay restrictions on nurses, teachers and other key workers.” | “Next month’s Budget must set out a clear plan for preventing another fall in living standards. The Chancellor should tackle insecurity at work, invest in infrastructure and skills, and end the current pay restrictions on nurses, teachers and other key workers.” |
| Updated | Updated |
| at 10.30am GMT | at 10.30am GMT |
| 10.19am GMT | 10.19am GMT |
| 10:19 | 10:19 |
| This chart plots the UK unemployment rate over the last 45 years (in blue), and also the rates for men (yellow) and women (red) | This chart plots the UK unemployment rate over the last 45 years (in blue), and also the rates for men (yellow) and women (red) |
| It shows that the overall unemployment rate has dropped from 8.4% in 2011 to just 4.8% at the end of last year, the lowest since mid-2005 (not 2006 as I initially wrote earlier, sorry). | It shows that the overall unemployment rate has dropped from 8.4% in 2011 to just 4.8% at the end of last year, the lowest since mid-2005 (not 2006 as I initially wrote earlier, sorry). |
| 10.12am GMT | 10.12am GMT |
| 10:12 | 10:12 |
| Here’s Work and Pensions Secretary Damian Green on today’s jobs report: | Here’s Work and Pensions Secretary Damian Green on today’s jobs report: |
| “With employment at its highest rate since records began, and unemployment at its lowest in over a decade, we remain in a position of strength. | “With employment at its highest rate since records began, and unemployment at its lowest in over a decade, we remain in a position of strength. |
| “Our ongoing welfare reforms will continue to incentivise work and make sure the system is fair to all those who need it and those who pay for it. | “Our ongoing welfare reforms will continue to incentivise work and make sure the system is fair to all those who need it and those who pay for it. |
| With youth unemployment down, women in work at record levels and number of disabled people in work increasing too, we’re delivering on our pledge to build a country that works for everyone.” | With youth unemployment down, women in work at record levels and number of disabled people in work increasing too, we’re delivering on our pledge to build a country that works for everyone.” |
| 10.08am GMT | 10.08am GMT |
| 10:08 | 10:08 |
| The Department of Work and Pensions are tweeting some positive points from today’s jobs report: | The Department of Work and Pensions are tweeting some positive points from today’s jobs report: |
| New independent stats show the number of people in work has risen in every region and nation of the UK since 2010 pic.twitter.com/w2VWPrvWy5 | New independent stats show the number of people in work has risen in every region and nation of the UK since 2010 pic.twitter.com/w2VWPrvWy5 |
| Independent stats show that the number of disabled people in work is the highest since comparable records began in 2013 #DisabilityConfident pic.twitter.com/Ucu2lHgHwH | Independent stats show that the number of disabled people in work is the highest since comparable records began in 2013 #DisabilityConfident pic.twitter.com/Ucu2lHgHwH |
| Employment is at a record rate of 74.6% with a record 31.84 million now in work. Read the news release here https://t.co/8N5CfPM3if pic.twitter.com/A5NqX0trOv | Employment is at a record rate of 74.6% with a record 31.84 million now in work. Read the news release here https://t.co/8N5CfPM3if pic.twitter.com/A5NqX0trOv |
| 10.06am GMT | 10.06am GMT |
| 10:06 | 10:06 |
| ONS: Non-UK nationals now make up 10.9% of workforce | ONS: Non-UK nationals now make up 10.9% of workforce |
| Today’s jobs report also shows how the number of non-UK nationals working in Britain has grown over the last two decades, from almost 4% of the workforce to nearly 11%. | Today’s jobs report also shows how the number of non-UK nationals working in Britain has grown over the last two decades, from almost 4% of the workforce to nearly 11%. |
| The ONS says that between October to December 2015 and October to December 2016: | The ONS says that between October to December 2015 and October to December 2016: |
| UK nationals working in the UK increased by 70,000 to 28.44 million | UK nationals working in the UK increased by 70,000 to 28.44 million |
| non-UK nationals working in the UK increased by 233,000 to 3.48 million | non-UK nationals working in the UK increased by 233,000 to 3.48 million |
| And since October to December 1997.... | And since October to December 1997.... |
| the number of non-UK nationals working in the UK increased from just over 1 million to 3.48 million | the number of non-UK nationals working in the UK increased from just over 1 million to 3.48 million |
| the proportion of all people working in the UK accounted for by non-UK nationals increased from 3.8% to 10.9% | the proportion of all people working in the UK accounted for by non-UK nationals increased from 3.8% to 10.9% |
| this increase in non-UK nationals working in the UK reflects the admission of several new member states to the European Union (EU) | this increase in non-UK nationals working in the UK reflects the admission of several new member states to the European Union (EU) |