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

 

1 in 3 kids growing up in out-of-work households in parts of London

children legsChildren in Tower Hamlets and Islington are more than 4 times as likely to live in a home with parents who are out of work than those in Richmond.

A borough-by-borough breakdown compiled every May from data from the Department of Work and Pensions shows that 31% of children in both those inner London areas are living in homes where out-of-work benefits are claimed. The map below shows that this is not an exclusively inner city issue with 25% of children in out-of-work households in Enfield in the north, and 27% in Barking and Dagenham in the east.

In comparison, Richmond and Kingston in south west London have the lowest level of out-of work benefit households with children, followed by Harrow and Barnet.

Children out of work households map

338,00 children under 15 are in households claiming out-of-work benefits. London has a higher than average rate at 20%, compared to 18% for England, though since 2010 the rate has been declining and appears to be moving towards the national average. Unemployment rates in London have been static this year and are slightly higher than the national avearage, as reported by Urbs.

London is also seeing a reduction in the number of children being looked after by councils. While this has been historically high in London the rate has fallen below the rate for England since 2011.  It is currently 54 children per 10,000.  That means that in the last year a little over 10,000 children in London have been looked after by social services, children’s homes, foster parents or have been adopted.  Again there is a marked difference between the wealthier and poorer boroughs. In Richmond it is 20 children per 10,000. In Southwark the rate is 91 per 10,000 – that’s 550 kids.

Children looked after map

Source data

Children in Out of work households

Children in borough care

Women harder hit by unemployment

hWomen in London are more likely to be unemployed than they are in the rest of the UK.  With men it is the other way round with the rate slightly below the national average.  Data for the demographics of unemployment produced by the Office for National Statistics show 7.1% of women in the capital out of work compared to 6.1% for the national average.  That’s a 21% difference.

Unemployment gender

The latest demographic breakdown in London employment data for the year to September 2014 shows that people from ethnic minorities are more than twice as likely to be jobless as white people.

Unemployment ethnicity

The rate for young people aged 16-24 is nearly 3 times the London average at 19.8%. For disabled people it is more than twice the London average at 13%.

Unemployment is static in London according to the latest general figures that show 287,000 out of work in the 3 months to February this year.    That’s 6.2% and unchanged on the rate for the 3 months ending in January.

London unemployment remains higher than the national average of 5.6%. That has been the long term trend but the gap has closed over the past 3 years.

Unemployment London v England

London’s 6.2% jobless rate is in line with Wales, the West Midlands, and Yorkshire and Humberside.  It’s the second highest rate in the UK.  Only North East England has a higher rate at 7.7%.  The lowest rate is South East England at 4.2%.

Source data