Guest Author | Patrick Lynch
The employment outlook in the UK seems to be one of doom and gloom. The news has been filled with sad stories about high street retailers biting the dust. 2012 was a record bad year for retailers with dozens of stores closing their doors for good. Many of these stores were big names that would have been considered untouchable just a few years ago. Yet in the world of business, no company is ever safe and more casualties have ensured that 2013 begins on a gloomy note. Yet despite all the closures, British employment prospects are not quite as bad as we think, at least according to data released by the Chartered Institute of Personnel and Development (CIPD).
Why Is There Job Growth During Stagnation?
The CIPDseem to think that UK employment will actually hit a record high in just 2 years time! Although there has been extreme economic stagnation as evidenced in all the high street bankruptcies, unemployment in the UK has actually dropped slightly in the latter half of 2012 to 7.8%. Employment during 2012 rose by 40,000 taking total UK employment to an all-time record high of 29.6 million. Of course, we have to consider population increase in all of this and ultimately, unemployment rate is a better indicator but this is certainly encouraging news. The CIPD say that the 30 million barrier will be broken in 2015.
The reasons for job growth despite the nation’s current circumstances are obscure according to the CIPD. Underemployment would be an obvious reason (this means people with part-time jobs who want full-time jobs) but the CIPD claim underemployment figures have not risen significantly and do not explain the growth.
No Job Security
Yet a separate report suggests that those who are in employment can expect a long and hard slog for the rest of the year with UK employees likely to experience longer hours, static jobs and a limited number of new jobs created in 2013. John Philpott, former chief economist of the CIPD, disagrees with his former employers and believes unemployment will rise to 2.63 million this year, a steady increase from the 2.51 million figure reported in October 2012. On a slightly more positive note, he says that youth unemployment will fall below the 900,000 mark instead of breaching 1 million like it had threatened during 2012. He says that there may be a modest employment rise but even this merely serves to show how difficult things are when this is considered good news.
Although the CIPD are being optimistic, even they admit that the current labour market was hard to understand. Mark Beatson is the current chief economist of the CIPD and he said that the labour market of 2012 where the private sector enjoyed sustained growth was something of a mystery and he expects 2013 to go down the same route. In other words, we should be hoping for the best while expecting the worst. It’s likely that yet another year of economic austerity awaits us so it’s better if we plan and budget accordingly.