The Coalition’s employment record – Labour’s jobs myths or Conservatives’ massaged figures?

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January 20, 2015 by Paul Goldsmith

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David Cameron has put the Conservatives’ record on employment at their heart of their election battle plan. In a speech yesterday he talked again of his aim for ‘full employment’. The problem is that their record, which involves the creation of almost 2 million jobs since 2010, is subject to much debate, in terms of what kinds of jobs have been created amongst other things. Over the next four months you are going to see a battle of statistics being played out in this area between a Labour Party concerned about the types of jobs created and a Conservative Party concerned that “myths” are being peddled by both Labour and the Unions about something that should in fact be celebrated.

There is a reason why if you put two Economists in a room you are likely to get four opinions on something, and it’s because data can be read and interpreted in many different ways. For instance, one Economist could say that the UK having more people in work than ever before is a sign of good Coalition policy on welfare and employment. Another Economist may argue that it is only because the UK has a higher population than ever before. Another Economist could point to the fact that GDP is back where it was before the Great Recession and another Economist might counter that GDP per capita is down as we have so many more workers but are not producing much more than we did before, so productivity is down.

The Labour Party have argued during the past five years that the reason so many jobs have been created is that the Coalition has been presiding over a boom in “zero-hours” contracts, where workers are given no guarantee of hours or pay and live week to week not knowing whether they will earn enough to pay the bills. Labour argue that, like anyone can sell a product for a price that is way to low, anyone can persuade firms to hire workers on zero hour contracts as they have a ready supply of flexible labour at potentially no cost. Labour also point out that many of the new jobs created are low-skill, low-paid or part-time jobs. They have also said much about youth unemployment being over a million, and how much of the country are being left behind by London.

To counter this, the Secretary of State for Work and Pensions, Iain Duncan Smith, commissioned some research from his department. The aim of the research was to try and demolish the five biggest “jobs myths” that he sees being peddled.

The research found that:

1) 19 out of 20 new positions created in the past year have been full-time

2) The number of part-timers that are seeking full-time positions was down by 148,000

3) Two-thirds of the rise in employment over this Parliament have been in professional and managerial occupations.

4) Youth unemployment is in fact just over 500,000 once you take out those who are in education.

5) Three quarters of this growth in employment had been outside the London. The East Midlands, the East of England, Yorkshire and Humber, Scotland and the South West of England have better employment rates than London does

The study pointed out that there are 690,000 job vacancies these days. This is up by 126,000 on where it was last year, and around the same as it was in 2008 before the recession started.

Duncan-Smith has seized on this research to suggest that the doom and gloom that Labour and the Unions have been spreading about the welfare and employment reforms of the Coalition government have been unnecessary and unhelpful.

The trouble, of course, is that the research is by Duncan-Smith’s own department, and not an independent source. So it may well be that Labour might find a source of information that challenges these figures. They will need to, because the figures are really quite impressive.

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