Real wages have grown faster than at any point in the last 7 years, official figures out yesterday showed.
Annual real wage growth is now at 2.7% – the highest it has been since 2007.
In further proof that the jobs market is continuing to grow, there are over 2.4 million more people working in the private sector than in 2010, with annual private sector pay growth now up to 3.3%.
More than 400,000 extra people are in work compared to a year ago, while unemployment has also fallen nearly 350,000 over the same period to its lowest level since August 2008.
The proportion of the workforce claiming benefits because they are unemployed is now at its lowest level since 1975 – down to 2.3%.
The Government has taken action to reform the welfare system and is supporting people off benefits and into work. The number of people claiming the main out-of-work benefits has fallen by more than 1 million since 2010 – the lowest level since 1982.
Employment Minister Priti Patel said “Today’s figures confirm that our long-term economic plan is already starting to deliver a better, more prosperous future for the whole of the country, with wages rising, more people finding jobs and more women in work than ever before.
“As the Government for working people, we want to go further and create one nation that is based on security and opportunity. We will continue to help businesses create jobs and support those who want to work hard and get on as part of our ambition to achieve full employment.”
The vast majority of the rise in employment in the last year – 85% – has been in full-time work, and the UK’s employment rate has seen the largest rise of any G7 economy over the last year.
The number of vacancies across the UK economy is well over 700,000 at any one time. Professional, scientific and technical roles saw the largest jobs growth over the last year – while hospitality, retail, manufacturing and construction also grew.
Youth unemployment, excluding full-time students, has fallen below the level it was before to the recession.
Long-term unemployment fell to its lowest level in more than 5 years – supported by the Work Programme, which is the biggest single payment by results employment programme Britain has ever seen.
Last month we announced we would be bringing in new measures to support our commitment to achieving full employment. The measures include:
• Young unemployed people required to take part in training or work placements as part of new, tougher Day One Work Requirements.
• Increasing free childcare for 3 to 4 year olds from 15 to 30 hours.
• Tax-free childcare for every child so parents get 20% off.
• Reducing the benefit cap to £23,000 to ensure people are always better off in work.
Key UK employment facts
• Regular wages (excluding bonuses) rose by 2.7% over the last year
• Employment rate is 73.4%
• Record employment rate for women (68.6%)
• Unemployment rate is 5.5%
• Employment up over 400,000 in the past year alone
• Employment up more than two million since 2010
• There are 734,000 vacancies in the economy at any one time
• There are 1 million fewer people claiming the main out of work benefits than in 2010
• Long-term unemployment now lowest since June 2009 after falling 219,000 in the last year – supported by the Work Programme
• Youth unemployment, excluding those in full time study, fell 85,000 in the last year and is now below where it was before the recession.
Ann Swain chief executive at APSCo, said, “According to the Office for National Statistics (ONS), employment increased by 114,000 in the three months to April driving the employment rate to 73.4%. Average pay including bonuses was also up by 2.7% on an annual basis. News that the number of people in employment has increased once again was confidently expected. We in recruitment continue to witness an ongoing increase in vacancies, with every major sector survey recording an uplift in activity in recent months. Indeed, our latest Professional Recruitment Trends Report found that permanent vacancies increased 16% in the year to April 2015, with contract roles also up 3%. It is unsurprising that average salaries are on the upward trajectory as the war for talent rages. ONS’s figures are in line with APSCo’s latest data, which revealed that median salaries across the professional sectors were up by a robust 2.9% year-on-year. Continued market positivity will only push wages higher as businesses vie to bring on board the skills they need to facilitate further growth.”
Matt Singer, VP of Marketing at Jobvite, said, “This morning the Office of National Statistics announced that the unemployment rate for February to April 2015 was 5.5%, down from 6.6% a year ago. This is positive news for the UK economy, although organisations must ensure they move with the times to continue this trend. For employment figures to keep rising, recruitment and HR professionals must adopt the latest practices and technology. 91% of people have their smartphone within arm’s reach 24 hours a day, but many organisations have not devoted enough energy into recruiting through this channel. Mobile and social must become a priority. Recruiters and talent managers wanting to attract the highest calibre of candidates must ensure their hiring policies are responsive, flexible and forward-looking. This will not only impact the performance of their businesses, but will have a knock-on effect across the entire country. The job market waits for no one. If businesses don’t evolve, then they will face extinction.”
David Kern, chief economist of the British Chambers of Commerce, said, “Once again, we see strong labour market figures with employment continuing to rise and unemployment falling. The flexibility and dynamism of the UK labour market remain a major source of strength for the economy and confirm our optimism that we will continue to see growth in the year ahead. One area of concern is youth employment, which remains stubbornly high – almost three times higher than the national average. The acceleration in average earnings growth to 2.7% confirms that living standards are rising and households will be really starting to feel the benefit. The speed in the rise in earnings will embolden a minority on the MPC who feel the urge to raise rates. However, until there is firmer evidence of comparable increases in productivity, such a move would be premature. With inflation likely to remain around zero for the next few months and to edge up slowly thereafter, the MPC should not jump the gun and, in doing so, endanger the recovery. This is a moment when patience is a virtue.”
Hannah Maundrell, editor in chief of money.co.uk, commented, “Good news on the employment-front: more of us that can work are in work – something that’s not likely to go unmentioned in the Chancellor’s upcoming Budget! What’s really positive for consumers is that wages are actually rising too and low inflation is giving us a little more buying power. Let’s not forget that with turmoil in Europe there are clouds on the horizon, and while the figures look good now many households are struggling.”
Andrew Hunter, co-founder of Adzuna, said, “The labour market appears to be gliding along smoothly. But beneath the surface, the legs of the jobs market are still paddling furiously. Advertised salaries have started to plateau, suggesting the recovery may be slowing down, while inflation is starting to creep up again. And a skills shortage is dampening the recovery in sectors like IT and Manufacturing.
“The next flood of applicants are about to join the workforce – as grads finish their courses and start their careers. At the other end of the workforce, older workers are keen to stay in their positions for longer. Though unemployment has fallen, the workforce isn’t operating at full capacity. There is still plenty of give for workers to contribute more.
“The challenge is to match candidates to the roles that suit them most, and train up workers to meet the needs where we are lacking. Apprenticeships will help the reskilling of current employees, keeping them in the workforce for longer, as well as helping train fresh talent. As unemployment falls, we need to use our workers wisely to maximise our productivity. That will set off a chain of significant salary growth at last.”
Neil Carberry, CBI Ddirector for employment and skills, said, “These figures provide more evidence that the wage squeeze has eased, with private sector pay increasing almost as fast as it was before the crisis. At the same time, firms are creating more jobs. If we are to deliver sustainable higher wage growth, we need to see a rise in productivity. That means businesses investing in skills, and the Government helping firms innovate by supporting investment in next month’s Budget. These figures are testament to the strength of our flexible labour market, which has helped British firms create a strong number of permanent full-time jobs.”
Neil Carberry, CBI Director for Employment and Skills, said, “These figures provide more evidence that the wage squeeze has eased, with private sector pay increasing almost as fast as it was before the crisis. At the same time, firms are creating more jobs. If we are to deliver sustainable higher wage growth, we need to see a rise in productivity. That means businesses investing in skills, and the Government helping firms innovate by supporting investment in next month’s Budget. These figures are testament to the strength of our flexible labour market, which has helped British firms create a strong number of permanent full-time jobs.”