“Record Numbers in work said the headlines. The Office for National Statistics said 21,000 more Scots were in work, compared with the previous quarter, bringing the total to 2,631,000 and unemployment had fallen by 11 000 to only (!!!) 152 000. Separately a study reported that Median pay* in Scotland had exceeded pay in England for the the first time. A typical Scottish Pay rate is £11.92. compared to £11.84 South of here. All good news then
Well not quite. A report by think Tank the Resolution Foundation into The State of Working Scotland doesn’t paint a particularly rosy picture ( that’s assuming a picture with 152 000 people unemployed can ever be described as rosy). The story of the financial crash was one where Scotland from a higher level of employment lost more jobs than the rest of the UK but pay held up a bit better. It’s not in this report – but part of that will be down to higher public spending ain Scotland and the degree of success in getting the Living wage paid in public services.
Unemployment is still higher than before the crash – don’t be fooled by the ‘more people in work than ever before’ headlines. That happens with a degree of regularity and tells you more about population demographics than the economy. It’s also been caused by a big jump in the number of people becoming self employed and a huge expansion in part time work.
The overall impact has been that wages are still below their 2009 levels median wages are £30 a week down. We may have large numbers in work but the there is a problem with getting enough work. Under employment is a big issue in the economy as a whole and in certain areas of public services where workers have seen hours either cut back or restricted. It is far higher than it was in 2008 and will unless tackled will undermine the progress being made in restoring pay.
The report also looks at the potential impact of the rising Living wage, higher tax thresholds and Universal Credit. The worry about the latter is that it will encourage short hours working. Most, but not all, benefits of raising the tax threshold are likely to go middle and high earners.
It’s an interesting report and if the overall story it tells is bleak - there are areas it points to where some things have improved since the start of the financial . What does come across clearly though is that unless the problems with unemployment and underemployment are tackled, whatever progress has been made to regain wage levels since the crash are under threat.
Massive cuts to public bodies and the possibility of thousands of job losses in public services therefore, aren’t going to help anybody