Judging by the success of film director James Cameron’s CGI spectacular Avatar, 3D is set to become all the rage at our cinema multiplexes in the next few years. But it’s not only movies that need the 3D treatment. Official statistics, as today’s labour market figures demonstrate, could do with it too.
News looks good on the face of things. Unemployment, of the broadest definition used by the Office for National Statistics (ONS), fell by 7,000 in the three months to November last year. November and December also saw a combined drop of 26,000 in the number of people unemployed and claiming jobseeker’s allowance. Okay, this might not look like much against a backdrop of 2.5 million jobless people. But it’s a lot better than many analysts - including myself - were expecting, and it could indicate that the human cost of the worst UK recession for 60 years will prove to be far less than originally feared.
As a professional economist, however, I’m genetically prone to treating good news with a dose of scepticism. And here’s where the 3D glasses come in handy. A closer look at all the dimensions of today’s job statistics is less comforting. While there may be fewer people unemployed and looking for work, there are fewer in work too (14,000 fewer in the latest quarter). The apparent paradox is explained by a rise in the number of people quitting the jobs market.
These are mostly young people turning to study as an alternative to the dole. There are now 2.5 million students – half a million more than when the recession first hit. Yet the latest figures also show a 6 per cent quarterly rise in people who say they are not looking for work because they are retired. Unlike the recessions of the 1980s and ‘90s, early retirement hasn’t been a noticeable feature of the current jobs slump. Indeed the employment of older workers has proved remarkably buoyant, in large part because many employers have sought alternatives to the kind of large-scale redundancy programmes that traditionally put those closer to retirement age first in the firing line. Worryingly, however, this might be about to change.
According to today’s ONS stats, employment among the over-50s has fallen for the first time since the recession began in 2008. This was also the only age group to register a slight quarterly rise in unemployment (15,000) rather than a fall. School or college is rarely an alternative to work for older unemployed people, so retirement it is. As a result, our 3D look at the jobs market is not particularly rosy for the grey segment of the UK workforce.