December 2022

Stephen Evans, chief executive of Learning and Work Institute, said:
Today’s data show almost one million working days lost to strikes in the three months to October, the highest in a decade. While not at ‘winter of discontent’ levels, strike days are likely to increase further with high inflation meaning a whole year of falling real wages, leaving them no higher than before the financial crisis. Pay growth of 2.9% in the public sector was far below 6.8% in the private sector. If the Government wants to improve public services, it will surely need to increase pay with inflation running at almost 10% and high vacancies running in some services. There was a slight fall in the number of people outside the labour market, but economic inactivity remains higher than pre-pandemic. As a result, employment is still 300,000 below pre-pandemic levels with the UK having the slowest employment recovery from the pandemic in the G7. The Government can unlock a £23 billion economic boost by using some of the £2 billion underspend on its Plan for Jobs to widen access to find work to more over 50s and disabled people.
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One million days lost to strikes in the three months to October 2022 

This is the highest level in the last decade, and likely to rise further with a range of strikes planned for the months ahead. However, days lost to strikes remain well down on levels seen in recent decades, this is not on the same scale as the winter of discontent. 

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Real earnings continue to fall due to high inflation 

The latest data show average regular earnings grew by 6.4% in the year to October 2022 – for public sector workers average regular earnings grew by 3.8%, while average regular earnings grew by nearly twice that (7%) for private sector workers. However, high inflation (9.6% in October) means real wages have now fallen for a year, and by 2.9% in the year to October 2022. Further falls are likely while inflation remains high.

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Employment is relatively flat and remains 300,000 below pre-pandemic levels 

Employment rose by 27,000 in August to October 2022 compared to the previous quarter and remains 300,000 lower than before the pandemic.  

Unemployment increased by 23,000 in August to October 2022 compared to the previous quarter. 

Economic inactivity fell by 76,000 compared to the previous quarter but is still 565,000 higher than its pre-pandemic level. Over 8.9 million people aged 16-64 are economically inactive, over 2.6 million of whom say this is due to sickness or disability (long or short term), 15% higher than pre-pandemic. Our research shows the UK is an international outlier in seeing this rise in economic inactivity, highlighting the need to extend employment support and widen our labour force. 

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There are fewer potential workers for employers to recruit, with 657,000 fewer over 50s in the labour market since the pandemic started 

Vacancies remain high at 1.2 million in September-November 2022, down slightly from their peak of 1.3 million in March-May 2022. With just 1.2 million people unemployed, recruitment is more challenging for employers because of rises in economic inactivity – people leaving the labour market. This has been primarily driven by those aged 50 and over and people with long-term health problems and disabilities. The number of people aged 50-64 who are economically inactive has increased by 9% since the pandemic started.  

This is a key challenge – for the Government to support people in this group who want to work and for employers to think about recruitment and job design that will meet their needs. However, while the number of over 64s who are economically inactive increased by 92,000 to just over 11 million in August-October 2022 compared to the previous quarter, the number of 50-64 year olds who are economically inactive decreased by 84,000, to 3.53 million. It may be that the cost of living crisis is leading people to rethink whether they want or need to work. 

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The employment picture varies across the country

Employment rates this quarter are higher than the equivalent pre-pandemic quarter in 2019 in the North East, Yorkshire & the Humber, Eastern England, and London and Scotland, but are lower everywhere else. Economic inactivity is highest in Northern Ireland, Wales and the North East. Four regions have a lower economic inactivity rate now compared to 2019 – Yorkshire & the Humber, Eastern England, London, and Scotland. This varying picture, which is even greater at sub-regional level, shows the importance of tackling inequalities so everyone has a fair chance in life wherever they live. 

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