Unemployment down but what’s really happening in job market?

shutterstock_131096951-1-2The unemployment rate in London fell slightly in the last quarter but the city still has the second highest rate of joblessness in the UK at 5.9%. Behind this headline rate is a more complex picture of the jobs market in the capital.

The unemployment rate for the whole of the UK for January to March this year was 5%, the lowest level since 2005, according to the latest data from the Office for National Statistics.  At 5.9% London has the second highest rate along with Yorkshire and Humberside and only the North East of England has a higher rate – 7.3%.

This means 280,000 people in London are without work.  But only 85,000, of them are claiming Jobseeker’s Allowance, the benefit for the unemployed.

Despite having one of the highest unemployment rates, the benefit claimant rate is among the lowest in the country.  Only the South East and the East of England have lower proportions of benefit claimants and these regions also have the lowest unemployment rates.

Yorkshire and Humberside has the same unemployment rate as London but 2.8% claiming benefits compared to 1.8% in the capital.

Uemployment and claimants

There are a number of reasons for the difference between unemployment and benefit claimants. Many of them will be common for the country, some of them may be more peculiar to London.

The most obvious difference between the two rates is who is included. The unemployment figures include all those able to work between the ages of 16 and 64 but those under 18 are, in most circumstances, excluded from claiming Jobseeker’s Allowance. In London this accounts for 9,000 people in the unemployed numbers.

Part time work is also a factor.  People working more than 16 hours per week cannot claim Jobseeker’s Allowance.  This may exclude people working in unpredictable and short term, part time jobs who may be unemployed for periods but not eligible for Jobseeker’s Allowance. People on zero-hours contracts may also be impacted by this.

The residence qualification may also be a factor, particularly in London.  To claim Jobseeker’s Allowance a person must be resident in the UK for at least 3 months. London has a high number of young workers from the EU, particularly southern Europe.  They would not be eligible to claim benefits when they first arrive to start seeking work.

The other key factor is the natural churn of the workforce.  The unemployment figures include people who have found work but not yet started. A number who are between jobs will not go through the process of making a claim for benefits.

London is the leading place in the UK for job creation. Since December 55,000 new jobs have been created. Over the same period the number of people who are economically active and available for work has risen by 50,000.

The Bank of England and the Office for Budget Responsibility have a target rate of 5% for sustainable unemployment – the rate at which people who want a job have one and any lower rate may mean wage inflation.

London may be approaching ‘peak job’ but what may matter more to employers and employees are the quality of the jobs, the wages and the productivity.

Source data

See also

Jobs growth brings decade-high employment rate for young people

Success of creative industries is good news for jobs growth in the capital

Over 750,000 jobs pay less than the living wage in the capital

 

Success of creative industries is good news for jobs growth in the capital

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Photo: Loreanto ┃Shutterstock.com

The creative industries are growing at twice the rate of the wider UK economy and that’s very good news for London which is the heartland of the sector.

Latest government figures show that the UK’s creative industries grew by 8.9% in 2014, the strongest performance of any sector. They are now worth £84.1 billion a year to the economy.

The creative industries were defined by the government at the start of the century as those based upon individual creativity, skill and talent that have the potential to create jobs and wealth through the exploitation of intellectual property.

If that all sounds a bit technical it boils down to things like the music, film, TV, video games, visual arts and the fashion industry. It also includes architecture, craft and design companies. But the biggest part is IT, software and computer services.

There were 1.8 million jobs in the creative industries in the UK in 2014, when they were last counted, and most of them were in London. The last few years has also seen a substantial rate of growth in the East and West Midlands, the South West and the North East.

creative industries

The creative industries account for 11.8% of the jobs in the London economy, a much higher proportion than any other regions.  So, the continued success of this sector is particularly vital for the capital.

Source data

See also

Economic growth carries risk for culture and creativity, says report

Shrinking public sector employment outdone by private sector jobs growth

Self employed map shows huge rise in parts of city

 

Huge pay gap in hourly rates between full time and part time workers

Daniel Wilson shutterstock_95849584-1-2-1People working part time are paid a little over half the hourly rate of those working in full-time employment, and the gap between full time and part time rates is wider in London than any area of the country.

Latest figures for earnings from the Office for National Statistics show that the median hourly rate in London is £9.22 if you work part time but £16.16 for those with a full-time job.

A quarter of the jobs in London are part time and many of them are low skilled. That’s 1.24 million jobs, with some people doing more than one to make up full time hours but being paid a fraction of what they might earn as a full time employee.

In London the gap in hourly rates of pay is 43% but in every other region of the country it is 40% of less. In the South West of England part time workers earn an hourly rate of 68% the full time rate, compared to 57% in London.

The median hourly rate for part time work in the capital is just 14p higher than the next nearest region, the South East of England, but £1.20 higher than the lowest paid region, the North East.

Hourly earnings part time regional

The figures are based on a sample of PAYE records and the ONS calculates a median, or mid point, rather than an average, which might be distorted by a small number of very high rates.

People living in Newham have a lower hourly part time rate than any region of the country and are typically being paid less than those living in Newcastle or Sunderland, where the cost of living is lower.

The rate is only a little higher in neighbouring Tower Hamlets and across the capital median hourly rates for part time workers are below the London Living Wage in 15 of the 33 boroughs – Croydon, Merton, Greenwich, Lambeth, Tower Hamlets, Newham, Barking and Dagenham, Hounslow, Ealing, Brent, Camden, Hackney, Haringey, Enfield and Waltham Forest.

Hourly earnings part time map

The Greater London Authority sets the London Living Wage. It is a voluntary rate and promoted by the Mayor, who is trying to get employers to sign up. At the time of the earnings survey in April the London Living Wage was £9.15. It was increased to £9.40 in October.

As previously reported by Urbs, there are three quarters of a million jobs in London paying less than the Living Wage.  Data shows that women are more likley than men to be in low paid work, and nearly half of those working for less than the London Living Wage are under 24.

Source data

See also

Lowest paid living in Newham as rates remain static across capital

Over 750,000 jobs pay less than the living wage in the capital

Buying a home gets further out of reach, now 11 times annual salary

 

 

Economic growth carries risk for culture and creativity, says report

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Photo: AstroStar ┃Shutterstock.com

The economic success of London may be coming at a cost to the culture and creativity of the city. This is the warning in a report by the World Cities Culture Forum, a network of 27 cities, including London, that share research to help develop policy.

In its 2015 report, published to coincide with a summit meeting in London, it says that the capital’s growth poses significant challenges with pressure on housing and transport, and many people priced out of the city centre.

As reported by Urbs, the affordability of housing means younger people, in particular, find trouble finding a place to live, with many moving back in with parents after finishing higher education.

The report observes that the rising cost of living makes it very difficult for those working in the creative industries to find not only a home but also a space to work. It says, “For some years, places like London and New York have been replacing studios with apartments, artists with bankers. Estimates suggest that in the next four years, London will lose around 30% of its current artists’ workspace.”

The forum says that the emergence of ‘tech city’ in East London in the 1990s demonstrated the value of low cost workspace. Without it cities are prevented form nurturing radical and provocative ideas.

According to data analysis by the WCCF, London has the highest proportion of people working in the creative industries of any of its 27 city members. It says that 16.2% of the London workforce is in the creative industries, according to data from the Department of Culture, Media and Sport.

creative industries employment

Ricky Burdett, Professor of Urban Studies at the LSE says, “The contribution of London’s creative industries to national productivity 
and its ability to attract young and global workforce are central to its survival as a world city.”


Surveys have shown that people globally rate London highly as a city to come to work, as previously reported by Urbs. The cultural and creative life of the city plays a part in their decision.

The report says that while some cities are now making low cost work space a priority they are failing to solve the problem of affordable housing for their artists, producers and young creative talent.

London data

World Cities Culture Forum 2015 report

See also

Where in the world would you like to work?

London leads Europe but lags behind US as tech start up base, says survey

 

 

The city’s workforce: best qualified in the UK and getting smarter

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Photo: pcruciatti ┃Shutterstock.com

London has the best-qualified workforce in the UK. Nearly half the working-age population has a degree-level or equivalent qualification.

The proportion of people educated and trained to this level (so-called level 4+) has been rising over recent years and remains consistently above the UK average.

Data based on the Annual Population Survey from the Office for National Statistics shows London reached 49% with level 4+ qualifications by the end of last year.

Qualifications 4+ chart

Levels are far higher in some areas of the capital. 9 boroughs in the centre and South West have more than 60% of the workforce with qualifications at level 4+. These include Camden, Hammersmith and Fulham, Kensington and Chelsea, Westminster, City of London, Richmond and Lambeth. But top spot goes to Wandsworth where almost 70% of people aged 16-64 have a degree or equivalent.

Only Havering, Barking and Dagenham, and Bexley have levels below the national average.

Qualifications 4+ map

The proportion of people with no qualifications was stable through 2013 and 2014 at 8%, a little below the national average. In Barking and Dagenham the rate is nearly double that at just below 16%. Greenwich, Newham, Tower Hamlets and Haringey all have more than 10% of the working population with no qualifications, which is above the national average.

Qualitfications none map

The skills levels of the London workforce has been praised by foreign business owners as an incentive for operating in the city, according to a survey conducted by the GLA, previously reported by Urbs.

Source data

See also

What National Insurance really tells us about London’s overseas workforce

New workers stick together and head north of river as they settle in the capital

How London boroughs will rival the ‘Northern Powerhouse’

North and East see growth in number of businesses

house plans 2Business growth across London has been more successful in the north and east of the capital in the past 6 years than the south and west.

The number of businesses has contracted in some central areas and fallen by 32% in the City. Data from the Office for National Statistics shows the largest growth in the number of individual business units between 2009-2015 was in Camden and Lambeth.

But a crescent of boroughs from Harrow in the north to Greenwich in the south east have seen growth above 20% since 2009 and in a number, including Newham and Redbridge, it is over 30%. At the same time there has been just single digit growth on the opposite side of the city.

Business unit growth

The data shows that there are currently 461,020 businesses in London. It’s the largest number of any UK region and the equivalent of the combined number for North West England, Yorkshire and Humberside.

More that 10% of businesses are in Westminster, and it has 10 times more than Barking and Dagenham, which has the fewest with 5,865.

Business unit numbers 2

The largest sector in terms of numbers of businesses in the capital is Professional, Scientific and Technical services, as it is in the UK as a whole. In London this accounts for 24% of all business. In the City of London this sector is 40% of all business units.

Information and Communication services is London’s second biggest sector with 13% of all businesses. Business administration and support, and construction are third and fourth. Across the country, construction is the second biggest industry sector in terms of numbers of businesses and retail makes up a higher proportion of businesses than in does in London.

Source data

Jobs forecast shows Tower Hamlets as engine of employment growth

Jobs concentrated in just 5 of London’s 33 boroughs

Shrinking public sector employment outdone by private sector jobs growth

 

 

 

Over 750,000 jobs pay less than the living wage in the capital

Bike work-2Nearly 1 in 5 jobs in London pays less than the living wage and in some areas of the capital between 30 and 40% of work has an hourly rate below the level Londoners need to live on.

The proportion of jobs below living wage has risen from 13% in 2008 to 19% last year, with women affected more than men and under 24s particularly hit.

Data from the Office for National Statistics show that in 2014 more than three quarters of a million jobs in London paid less than the living wage. Part time jobs are affected more than full time employment, 4 times more likely to be below the living wage.

The London Living Wage (LLW) is set by the Greater London Authority. It is a voluntary rate and promoted by the Mayor, who is trying to get employers to sign up. It is currently set at £9.15 per hour. Last year during the period for these job statistics it was £8.80.

The concept of the LLW was introduced in 2008 and followed by an Out of London rate in 2012. From 2008 to 2010 the proportion of jobs in London below the rate was stable at around 13%. In the past 5 years there has been a growth in low pay, low skill jobs but wage stagnation during the economic downturn of 2008/09 has meant that earnings are lagging behind.

Living Wage rate

The data shows that some sectors of the jobs market that are growing fast have a very high proportion of jobs below the living wage – 45% of social care jobs, 55% in retail, 65% in food and accommodation, and 78% of cleaning jobs.

It is not only work for private companies that is paying poorly. 6% of jobs in the public sector also pay below living wage level. That’s 51,000 jobs.

The only legal protection on pay is the National Minimum Wage, currently set at £6.50 per hour for those over 21. In the budget in July the government announced a new legal rate for over 25s, rather confusingly calling it the National Living Wage. This will be introduced in April at £7.20, but it will not get to the current level of the London Living Wage until 2020.

And it will offer no help to those under 24. Nearly half the jobs in this age group pay less than the living wage.

living wage age

Since 2008 the proportion of 18-24s paid below living wage has gone up by 11% and the rate of 25-34s has risen by 7%.

Women are more likely than men to have jobs below living wage – 22% compared to 16% of men.

London’s rate of 19% of all jobs paying below living wage makes it one of the lowest levels in the UK, on a par with the South East of England and Scotland. But it is not a uniform picture across the capital. 5 boroughs, Harrow, Waltham Forest, Enfield, Sutton and Newham, have rates at 30% and above.

Living wage map-2

Harrow has the second highest proportion of jobs that pay below living wage in the UK. Waltham Forest has the 7th rate.

While parts of the capital enjoy a high proportion of jobs paying above the living wage, tens of thousands of Londoners in the outer boroughs will continue to struggle with the cost of living in the city.

Source data

See also

Living Wage helps some but thousands struggling with low pay in London

Paying the rent takes up 72% of income for private tenants

Pay rates underline gap between rich and poor boroughs

Shrinking public sector employment outdone by private sector jobs growth

commuters B&W-2The proportion of jobs in the public sector is shrinking, driven by government cuts under its austerity plans but more largely by the growth in private sector employment.

744,000 people living in London work in the public sector, which includes the NHS, education, central government, local authorities, public bodies, the police and the armed forces. That is 15.3% of the workforce and one of the lowest rates in Britain. The average for England is 16.8% with rates much higher in the North East and in Wales and Scotland.

public sector jobs regional

Since 2010 there has been an 8% decline in public sector jobs. Under government plans heath and education budgets are protected so the cuts have fallen elsewhere. Some of the reduction may be attribute to reclassification. At the end of 2013 Royal Mail was privatized and in early 2014 the Lloyds Banking Group, that had been bailed out by the government and taken in to the public sector, was reclassified as private as the government sold down its share.

During the same period there has been rise of in private sector job, pushing up the proportion of private sector workers from 81% to 85% of the workforce.

This split however is not uniform across London. 27% of the employment in Greenwich is in the public sector. That’s the highest rate of any region in the UK, and neighbouring Lewisham and Newham are not that far behind. At the other extreme, there are just 3% of people in the City working in the public sector.

public sector jobs map

Government pressure to reduce the size of the public sector is likely to lead to it making up a smaller proportion of employment in the next few years. The Office for Budget Responsibility, which analyses public finances, has said that between 2010-18 it expected to see the loss of 1.1 million public sector jobs across the country.

London is fortunate in seeing private sector job growth to compensate, at least in numbers. What is not clear from this data is how successful ex-public sector workers are at finding appropriate work in private organisations.

Source data

See also

Jobs concentrated in just 5 of London’s 33 boroughs

The jobs success and housing failure causing a crisis for the capital

Jobs growth shows changing face of work

 

 

The jobs success and housing failure causing a crisis for the capital

roofer colourIn his speech to the Conservative Party conference the Prime Minister, David Cameron, called for a house building “crusade” to deal with the shortage of homes. Nowhere is this felt more severely than in the capital where the success in jobs growth but the failure in house building has led to a structural shortfall.

Since 2002 London has seen a 21% increase in jobs and a 16% rise in population. Over the same period new homes have increased by 10%. And the pressure on housing will continue as London’s population forecast suggests it will grow at 100,000 a year for the next decade.

Housing growth jobs

House building in the capital has been bumping along at around the 20,000 level for the past 10 years. Following the financial crisis of 2008 it dipped sharply. Most of the homes being built are in the private sector, not social housing, which raises issues about affordability.

Housing growth starts

New home starts are climbing back towards where they were 10 years ago, but it is still not enough and the problem is widely acknowledged. In his housing strategy document last year the Mayor of London, Boris Johnson, said that housing was an epic challenge and that the number of new homes being built in the capital would need to double to 42,000 per year for the next 20 years to keep pace with population growth.

The problem in London is more severe than in other comparable cities. Annualised figures for population growth and home building over the past decade show Tokyo and New York in housing surplus, while Paris has an annual shortfall but not to the same level as London

Housing growth cities-2

London relies heavily on housing stock from the last century and before, as reported by Urbs London. A quarter of the homes were built before 1900. Outer London saw a huge house-building boom in the 1920s and 30s but in recent years there has been very little increase in these areas. Figures from the Department for Communities and Local Government, reported by Urbs, show that since 2000 there has been a 11% increase in new dwellings across London (both new builds and conversions) but in 16 outer boroughs this growth is in single figures with just 4% in Sutton and 2% in Merton.

A survey carried out by the housing charity, Shelter, earlier this year showed that most people in London support the building of new homes in their area. And the number of Londoners who strongly support new building was much higher than in England as a whole.

Housing growth support

Despite the political ambition to build and the apparent public support for it, the housing shortfall that London needs to make up will mean that availability and affordability will continue to be severe problems for years to come, and the issue is likely to be a significant battleground in the election for the next Mayor in May 2016.

Source data

See also

Living in the past: The old housing keeping a roof over our heads

More homes packed into built up inner city as growth stalls in outer areas

Booming population will struggle to find a place to live

 

New workers stick together and head north of river as they settle in the capital

Larger numbers of new overseas workers coming to the capital are settling north of the river than south with Newham and Brent as the favourite destinations.

334,419 people from overseas registered for a National Insurance number, allowing them to work or claim benefits, in the financial year 2014/15. More than 50,000 are in Newham and Brent, but there are more than 10,000 in 13 of the 20 boroughs north of the river.

The City of London has the highest rate as a proportion of the working age population, but the numbers are small. Newham and Brent stand out clearly, and the top 10 are all north of the river areas.

NI top 10 boroughs

In contrast, 8 of the 10 boroughs with the lowest proportions are south of the river.

NI bottom 10 boroughsNew arrivals from Romania are driving the Newham and Brent numbers. Romanians were allowed free access to the UK labour market from the beginning of 2014. In the financial year 2014/15 nearly 67,000 have settled in London and registered for NI. That’s 20% of all registrations in London.

As our map shows, there are more than 8,000 in both Newham and Brent. That’s around a third of all new overseas NI registrations in each of those boroughs. As previously reported by Urbs, these are the areas that have the highest levels of Romanian born Londoners according to data from the last census in 2011.

NI Map Romanians-2

And it is not only Romanians who are choosing to join established national communities in London. Bulgarians, who also gained free movement to work in Britain in 2014, have predominantly settled in Haringey, Newham and Enfield. These are the three areas with the most Bulgarian-born Londoners according to the census.

Ni Map Bulgarians

The same story emerges for Poles. Ealing has more people from Poland than any other London borough according to the census data. It also has by far the most new NI registrations.

NI Map Poles

The group that bucks this trend is the Italians. 35,000 registered for NI in the past year, the biggest national group after Romanians. The census data shows that Italians living in London favour inner London boroughs with Westminster and Kensington and Chelsea as favourite. As our map shows, new arrivals are still living centrally but Tower Hamlets is the number one choice with Brent and Haringey also proving popular.

NI Map Italians

This shift in emphasis may be due to the changing nature and income level of a growing workforce seeking employment in London amid more difficult economic circumstances back home since the financial crisis.

Source data

See also

What National Insurance really tells us about London’s overseas workforce

The importance of the London factor in overseas worker numbers

London population maps