S E R V I C E

FACT S E R V I C E

161

Earnings growth falls in most sectors

162 Inflation falls again Councils spend huge sums fighting equal pay

163 Benefit reforms fail disabled people Unemployment rises but growth slows 164 Unemployment

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Earnings growth falls in most sectors Earnings growth stalled in most sectors of the economy in the latest three-month period, according to the latest figures from the Office for National Statistics, Headline earnings growth (the latest rolling threemonth average) for the whole economy was down to a provisional 1.6% in the three months to August from 1.8% for the three-month period to July. Earnings growth in the service sector was 1.7% against 2.1% in the previous three-month period. Earnings growth for the private sector was down to 1.2%, against 1.4% in the previous three-month period to July. Meanwhile, in the public sector, earnings growth was down to 3.2% from 3.4%.

Volume 71, Issue 41, 15 October 2009

Average earnings indices 1 2000 =100

Whole economy annual Manu- Services Private % rise facturing sector

Public sector

2008 July (r) 136.8 August (r) 136.6 September (r) 137.0 October (r) 137.2 November (r) 137.3 December (r) 137.8

3.8 3.2 3.1 3.6 2.7 3.2

135.1 134.6 135.0 135.3 135.5 135.5

137.4 137.4 137.8 138.1 138.2 138.8

136.0 135.9 136.3 136.5 136.4 137.1

139.7 139.7 140.3 140.5 141.5 141.4

2009 January (r) February (r) March (r) April (r) May (r) June (r) July (r) August (p)

-0.7 -2.3 1.5 3.3 2.3 2.0 1.2 1.6

135.3 135.1 135.4 136.5 135.7 136.3 135.6 137.2

132.9 131.1 138.8 139.4 139.3 139.4 139.3 139.6

131.4 129.5 137.0 137.7 137.4 137.3 137.1 137.6

141.8 142.1 142.1 142.8 142.9 143.5 143.2 143.7

% annual rise for August

2.0

1.6

1.2

2.9

% increase in headline rate for August 2 1.6

1.3

1.7

1.2

3.2

133.3 131.8 138.0 138.5 138.4 138.5 138.4 138.8

Average weekly earnings in Great Britain, seasonally adjusted, including bonuses. 2 The average of the seasonally adjusted data for the latest three months compared with a year earlier. (p) provisional, (r) revised 1

The manufacturing sector bucked the trend. Here the rise in earnings was 1.3% — up from 0.7% in the three months to July. Monthly figures show average earnings for the whole economy rose by a provisional 1.6% in the year to August — up from the revised figure of a 1.2% rise in July.

The table over gives estimates of full-time average weekly earnings by occupation. It is based on figures from the Annual Survey of Hours and Earnings 2008, uprated by the 3.5% increase in the average earnings index between April 2008 and August this year.

LABOUR RESEARCH DEPARTMENT

Published weekly by LRD Publications Ltd, 78 Blackfriars Road, London SE1 8HF. 020 7928 3649 www.lrd.org.uk

162

Fact Service Full-time average weekly earnings by occupation £ a week

All workers All male All female Managers Professionals Associate professionals Admin & secretarial Skilled/craft Services Sales Operatives Other manual jobs

594.40 653.20 502.50 882.50 795.80 614.30 411.60 499.30 352.80 326.50 461.90 358.40

Volume 71 Issue 41

Eleven of the 14 groups that make up the RPI posted increases above -1.4%. The housing group showed an 11.2% fall, including a 45.6% cut in mortgage interest payments and a 9.6% cut in “council tax and rates”. The fuel and light group’s fall of 7.9% included a 26.9% fall in oil and other fuel prices; a 7.2% fall in gas prices and a 5.8% cut in the cost of electricity. Offsetting that was a 9.2% rise in coal and solid fuel prices. A 9.8% fall in women’s clothing prices contributed to the 3.2% fall in the clothing and footwear group.

www.statistics.gov.uk/pdfdir/lmsuk1009.pdf

Inflation falls again Inflation fell and was in negative territory for the seventh consecutive month, according to the latest official figures. Under the Retail Prices Index (RPI), inflation was minus 1.4% in September — against minus 1.3% the previous month. The main contribution to the fall came from energy prices, which rose last year but were unchanged this year, according to the Office for National Statistics. Food prices also fell more this year between August and September than a year ago. Under the government’s preferred measure, the Consumer Prices Index (CPI), inflation fell to 1.1% in September and is under the Bank of England Monetary Policy Committee’s 2% target. The CPI rise was last lower in September 2002 (1.0%). Retail Prices Index (Jan 1987 =100)

% increase on year earlier RPI RPI except CPI mortgage interest payments

2004 2005 2006 2007

186.7 192.0 198.1 206.6

3.0 2.8 3.2 4.3

2.2 2.3 2.9 3.2

1.3 2.1 2.3 2.3

2008 September October November December

218.4 217.7 216.0 212.9

5.0 4.2 3.0 0.9

5.5 4.7 3.9 2.8

5.2 4.5 4.1 3.1

2009 January February March April May June July August September

210.1 211.4 211.3 211.5 212.8 213.4 213.4 214.4 215.3

0.1 0.0 -0.4 -1.2 -1.1 -1.6 -1.4 -1.3 -1.4

2.4 2.5 2.2 1.7 1.6 1.0 1.2 1.4 1.3

3.0 3.2 2.9 2.3 2.2 1.8 1.8 1.6 1.1

Dearer foreign holidays contributed to the 4.8% rise in leisure services as they rose by 7.2%, while in the household goods group a 6.2% rise in furniture prices contributed to the overall 4.5% rise for the group. More than -1.4%

%

Less than -1.4%

Leisure services Household goods Tobacco Alcoholic drink Motoring expenditure Household services Personal goods & services Catering Food Fares etc Leisure goods

4.8 4.5 3.8 3.2 2.9 2.8 2.4 1.9 1.7 0.4 -0.6

Clothing & footwear Fuel & light Housing

% -3.2 -7.9 -11.2

www.statistics.gov.uk/pdfdir/cpi1009.pdf www.statistics.gov.uk/pdfdir/cpibrief1009.pdf

Councils spend huge sums fighting equal pay Millions of pounds of council taxpayers’ money are being spent on fighting legal battles to stop low-paid women winning equal pay, according to the public services union UNISON. A survey of 50 authorities by the union found that more than £11.5 million has been spent to obstruct equal pay — a figure the union believes is “the tip of the iceberg”. Local authorities are spending up to £1.3 million each on private barristers’ and solicitors’ fees and up to £1.2 million on their own staff’s time attempting to resist the fight for fair wages. Using freedom of information legislation, the union discovered that among the most free-spending authorities is Sandwell Council which has paid out more than £1.3 million to external solicitors and barristers after refusing to negotiate equal pay with UNISON. Coventry’s bill for external legal help was more than £1.2 million.

Volume 71 Issue 41

Fact Service

Some local authorities have also spent hundreds of thousands on their in-house legal teams. Leeds, for instance has admitted incurring nearly £1.2 million in internal costs and paying £300,000 to outside lawyers. Sandwell Council has spent £124 per female employee resisting equal pay, while the equivalent figure at Rotherham is £115 and in Coventry is £104. The spending is in shocking contrast to the earnings of some of the low-paid members of UNISON. Some local government employees including cleaners, cooks, and care assistants earn as little as £6.30 an hour, or £12,145 a year. Dave Prentis, UNISON general secretary, said it was a “national disgrace” that local authorities were spending so much money on fighting to keep women’s wages down. The figures that the union has unearthed underestimate the total costs because some councils “couldn’t or wouldn’t” reveal their expenditure. “What a waste of money. Councils are stuffing money into lawyers’ pockets to put off the inevitable,” Prentis said. “Taxpayers’ money is being poured down the drain and low-paid women continue to be underpaid for jobs that society simply couldn’t function without.” www.unison.org.uk/asppresspack/pressrelease_view.asp?id=1603

Benefit reforms fail disabled people Disabled people are being denied access to government-funded programmes to help them into work because of changes to welfare policy, the Shaw Trust charity has warned.

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get trapped on long-term benefits. That’s why we’ve introduced this stronger early medical assessment alongside more support in work,” said Yvette Cooper, work and pensions secretary. But the Shaw Trust, which helps disabled people into employment, warned that people with disabilities are failing to qualify for ESA, which also excludes them from accessing training and skills programmes such as Pathways to Work or New Deal for Disabled People. Catherine A’Bear, chief officer for corporate affairs at the trust, told BBC Radio 4's PM programme that the workplace capability assessments, snapshot tests carried out by medical experts that are mainly based on physical capability, failed to pick up on people with fluctuating medical conditions, such as multiple sclerosis or mental health problems. “It’s too early for a government to claim this is a successful process. We are creating a massive underclass of people who are on Jobseeker’s Allowance but who need the type of support that the employment programmes which are restricted to people on the ESA can provide,” she said. The National Autistic Society has claimed that government support was failing to help people with autism into work. The charity has launched a campaign, called Don’t Write Me Off, to ensure the UK’s 300,000 workingage adults with autism are given better access to employment and benefits. Only 15% of adults with autism have full-time jobs, while a third are unemployed and have no access to benefits. The majority (79%) who currently claim IB want to work, the society said. www.peoplemanagement.co.uk/pm/articles/2009/10/benefit-reforms-fail-to-helpdisabled-people-into-work-claims-charity.htm

The first official analysis of the Work Capability Assessment, a new test introduced last year to determine whether people are able to work or claim Employment and Support Allowance (ESA), reveals a significant drop in the numbers eligible for benefits. Under the new system, which is part of wider government welfare reforms, over one in three (36%) of those who applied for ESA were found to be fit to work — up from less than one in five (17%) under the old arrangements for incapacity benefit (IB).

Unemployment rises but growth slows

The government welcomed the reduction in benefit claimants. “Those who can work need help to get back into jobs as soon as possible, so they don’t

The rise in the number of unemployed was the lowest since July last year, according to the office for National Statistics (ONS).

Unemployment has risen on both counts, according to the latest official figures. Under the Labour Force Survey (LFS) count, unemployment rose by 88,000 to 2.47 million in the three months to August — the highest figure since the three-month period ending May 1995.

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Fact Service

The increase in numbers pushed the jobless rate up from 7.6% to 7.9%. The number of unemployed men rose by 76,000 to 1.53 million and the unemployment rate was up to 9.0%. Meanwhile, unemployment among women rose by 12,000 to 935,000 and their unemployment rate went up from 6.4% to 6.5%. The LFS count includes people who are looking for work but are not eligible for benefits and is the government’s preferred measure. TUC general secretary Brendan Barber said: “These figures give some cause for hope that the recent rapid rises in unemployment are beginning to slow. “However the jobs crisis has not gone away and the economy remains very fragile. The number of people unemployed for over six months is now well over one million.”

Volume 71 Issue 41

which only includes those receiving Jobseeker’s Allowance. This count rose by 20,800 to 1.63 million in September — the lowest rise since May 2008. The unemployment rate was up to 5.0% from 4.9% in August. Unemployed men on benefit numbered 1.19 million and their unemployment rate was up at 6.8% from 6.7%. And the number of jobless women was up to 438,300 but their jobless rate was unchanged at 2.9%. Regions The claimant count rose in all 12 regions in September on the previous month. London topped the increases, followed by the South East and the North West. The unemployment rate was above the UK average of 5.0% in seven regions. The highest rates were 7.3% in the North East, 6.7% in the West Midlands and 6.2% in Northern Ireland.

Unemployment seasonally adjusted

2003 2004 2005 2006 2007 2008 2008 August September October November December 2009 January February March April May June July August (r) September (p)

Claimants (000s)

%1

LFS 2 (000s)

%

933 853 862 945 864 905

3.0 2.7 2.7 3.0 2.7 2.8

1,489 1,424 1,465 1,669 1,653 1,776

5.1 4.8 4.9 5.4 5.3 5.7

914 957 1,007 1,092 1,176

2.8 2.9 3.1 3.4 3.6

1,792 1,825 1,864 1,923 1,971

5.7 5.8 6.0 6.1 6.3

1,254 1,390 1,456 1,506 1,536 1,558 1,583 1,606 1,627

3.9 4.3 4.5 4.6 4.7 4.8 4.9 4.9 5.0

2,029 2,100 2,215 2,261 2,381 2,435 2,470 2,469

6.5 6.7 7.1 7.2 7.6 7.8 7.9 7.9

Percentage of working population — the employees, unemployed, self-employed and the armed forces. 2 The Labour Force Survey definition of unemployment — the number of unemployed people who want a job and are ready to start work in two weeks, and have looked for work in the past four weeks. Each figure is the average of the past three months — a rolling average. (p) provisional (r) revised 1

The official figures show that over 1.1 million people have now been unemployed for over six months against 963,000 in the previous three-months to May 2009. Those unemployed for more than six months now account for 45% of the total unemployed against 37% in the three months to May. ONS figures show that there was also a slowdown in the other official measure, the claimant count,

The LFS count also rose in nine regions on the previous three-month period. The largest increases were 24,000 in Wales, 17,000 in the North West and 13,000 in both Scotland and the East. The unemployment rate was above the UK average of 7.9% in five regions. The highest rates were 10.4% in the West Midlands, 9.5% in the North East and 9.1% in Wales. Region

September claimants Number %

LFS June — Aug Number %

North East North West Yorkshire & the Humber East Midlands West Midlands East London South East South West Wales Scotland Northern Ireland

87,600 203,700

7.3 5.8

118,000 300,000

9.5 8.7

158,900 114,600 185,900 123,400 227,300 160,100 97,500 81,400 132,600 53,800

6.0 5.1 6.7 4.3 4.7 3.5 3.5 5.8 4.7 6.2

226,000 165,000 281,000 200,000 354,000 267,000 179,000 130,000 192,000 57,000

8.6 7.1 10.4 6.7 8.7 6.1 6.6 9.1 7.1 7.1

Looking at other official employment-related figures, redundancies in the three months to July numbered 233,000 — down 68,000 on the previous three months. Manufacturing employed just 2.63 million people in the three months to August and 223,000 jobs have disappeared from the sector over the past year. www.statistics.gov.uk/pdfdir/lmsuk1009.pdf

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