The latest quarterly jobs figures reported by Manpower reveal the real truth about the economy. Not the gushing presentation offered by Osborne in his autumn statement, but what the men (nearly always men) with power and money really think. After the supposedly independent OBR upped its growth forecast for this year from 0.6 per cent in March to 1.4 per cent, and next year to 2.5 per cent, one would expect employers to be pursuing an investment and re-employment strategy to exploit the promised surge in growth.
Not a bit of it. Despite the government’s triumphalist forecasts that the economy is now growing at the fastest lick for a decade, employers are taking a much more cautious and nervous line. They’ve continued to hire largely part-time staff, revealing their concern that the recovery still remains fragile. In fact the biggest source of new employment isn’t across the economy as a whole, but actually in energy firms who’ve recruited thousands of new staff to deal with the blizzard of complaints about soaring electricity and gas bills.
The truth is the labour market, so far from confidently expanding to embrace the promised expanding markets, is still beset by the downward pull from shrinking wages, under-employment and skills shortages. The latest figures show that these pressures will persist well into 2014 and part-time work will continue to the employers’ preference for still some time to come. Paradoxically for Osborne, the sheer harshness of these working conditions in the private sector have driven a majority of jobseekers to try to obtain employment in the public sector which is seen to offer a better deal in terms of hours, holidays and flexi-time as well as better pensions.
Employers will also be acutely aware that this situation is not going to change quickly over the next few months or even years. This is partly because the present recovery-of-sorts, based on consumer expenditure and artificially inflate mortgage borrowing, cannot persist as wages continue to fall, but also because the small print of the Autumn Statement reveals that the pace of the cuts is due to increase by more than half as much again per year over the next six-year period. Osborne’s capitulation over the marriage tax allowance, free school meals and the petrol tax freeze, none of which was funded when he announced them last week, will require a further £12bn smash-and-grab from social security benefits in addition to the £19bn cuts by 2015.
And given the Tories’ grand ideological design to squeeze public spending down to its lowest level since 1948, from 23 per cent down to just 16 per cent, it’s hardly surprising that the corporate bosses, sitting on enormous cash stockpiles of £650bn, are certainly not tempted to splash out in new investment or a full-time expanded workforce.
