Hours Worked Increase
The Office of National Statistics release a monthly labour market overview, which estimates levels of employment, unemployment, economical activity, and other employment-related statistics for the UK. The latest UK Labour Market Overview shows, among other things, that the number of hours worked is on the increase.
At a time when latest figures state that UK inflation has hit a 40 year high of 9%, the fact that the number of hours worked has increased might suggest desperation from UK workers.
But could it be explained by something else? Read on to find out.
The latest UK Labour Market Overview just dropped, and it reveals some interesting insights about the state of our current labour market. It comes just days after the State Opening of Parliament, during which the government declared its intention to “grow and strengthen the economy and ease the cost of living for families.”
And the latest figures from the Labour Market Overview suggest that things have still not recovered from the pandemic, proving that the government’s priorities appear to be in the right place.
What is the Labour Market Overview?
The Labour Market Overview is released monthly by the ONS and is based on figures from the previous 3 months. This means that this release works on information provided from January 2022 to March 2022.
Some of the data included in the report is gathered from the Labour Force Survey (LFS) which is run by field interviewers each month, and some data, such as average weekly earnings and vacancies, rely on data collected from surveys of employers.
While the report is designed to provide only estimated predictions about the current state of the labour market, it does give useful information about what is going on.
Labour hours grow
One of the key measures in the report is the number of total actual weekly hours worked.
This increased by 14.8 million hours to 1.04 billion hours in January to March 2022, compared with the previous quarter. This might suggest that, due to the surging cost of living, people are taking on additional work to make ends meet in the forms of overtime or even additional part time roles.
But this is still 10.7 million hours below the pre-pandemic rates. So, this could be a bounce back as people return to work after the pandemic, especially with things still unlikely to have fully settled since the end of the furlough scheme in September.
Falling Unemployment Levels
Unemployment also fell to its lowest level in 47 years, and for the first time since records began, there are officially fewer unemployed people than job vacancies. This reflects recruiters experience of the candidate led market, where demand for candidates is outstripping supply.
But again, this could be down to the pandemic. What has been dubbed “The Great Resignation” continues, as people rethink their priorities in the wake covid, with a reported 500k or more people completely disengaging from the labour market since the pandemic began.
Bonuses Show Pay Growth, but that’s not the full story
After taking inflation into account, pay including bonuses rose 1.4% from January to March. But excluding bonuses pay fell by 1.2%, showing just how much the average employee is being squeezed.
Bonus payments are at their highest levels since 2013, as employers look for ways to help workers navigate the higher living costs, but without committing to wage deals which beat inflation. Ultimately, the increase in bonuses is being driven by the lack of candidates, as employers frantically scrabble to attract and hold on to workers knowing that they might find them difficult to replace in this scarce market.
The next release of the Labour Market Overview is due mid-June, which will be based on figures from February-April. It will be interesting to see the impact of issues such as the Russia-Ukraine conflict, growth in worldwide travel as restrictions ease and the end of free covid testing (which could put further strain on an already stressed labour force).