Monday, September 17, 2012


Every second Wednesday of every month, the Office for National Statistics releases the official employment and unemployment data for Wales.

And every second Wednesday of every month, the usual group of economists and business groups come out with the general consensus that jobs are not being created within the economy thanks to the UK Government’s austerity measures.

But if anyone bothered to look carefully at the detailed job statistics, then they actually paint a very different picture. Take employment, for example. One would think from all the doom and gloom that seems to pervade our media that no jobs were being created.

Yet, the data clearly show that, since the current UK Government took power back in May 2010, employment in Wales has actually increased by over 35,000, compensating for the fall of 27,000 in those employed during the previous two years. In fact, 68.6 per cent of all working age adults are now in employment in Wales, which is the same proportion as when the UK economy first went into recession back in the third quarter of 2008.

And whilst the latest data suggests that unemployment remains stubbornly stuck at around 9 per cent of working age adults, most of this increase actually took place between 2008 and 2010, when an additional 28,000 individuals became unemployed in Wales. In contrast, unemployment in Wales has risen at a far slower rate since the UK Coalition Government came to power.

One of the major drags on the Welsh economy during the last two decades has been the high number of those who are economically inactive. These are the group of individuals who are not in work, but who do not satisfy all the criteria for unemployment (wanting a job, seeking in the last four weeks and available to start in the next two).

Yet Wales now has the lowest level of economic inactivity since records began in 1992, a fact which seems to have been missed completely by both politicians and the press. Another claim that some commentators continue to make every month when the jobs figures are released is that there has been a major shift from full-time to part-time work.

Whilst the data indicates that the number of part-timers gone up since May 2010, the increase is about 1 per cent. Similarly, there have been claims that people are moving from employment to self-employment but again, the data doesn’t seem to bear this out for Wales, with only 4,000 more people working for themselves in the period 2008-2012.

Another major issue for those commentating on the economy has been the over-reliance on services, especially banking and finance, at the expense of manufacturing, with some politicians calling for a shift in the structure of industry in the UK.

In that respect, there is some good news, with an additional 15,000 manufacturing jobs have been created in Wales since June 2010, which equates to two thirds of all net new jobs created during this period. Given the lack of consumer confidence, it is not surprising that the largest decrease in the number of jobs has been in the retail trade, with 15,000 jobs gone in the last two years.

Perhaps the biggest surprise, given the picture painted of the effect of public sector cuts, is that there has been an increase of 17,000 new jobs in those sectors associated with the public sector such as health, education and public administration. Despite these better set of statistics, there remains a major concern in that the employment situation of young people in the economy is worsening. Indeed, the numbers of those employed in Wales and aged between 16 and 24 has fallen by 43,000 during the period 2008-2012.

Whilst the majority of this decrease was during the 2008-2010 period, the fact that the number of young people in employment has continued to go down by 21,000 in the last two years should be a major concern to government. It is worth noting that the official unemployment data shows that there are 51,000 young people in Wales who are classed as unemployed, which is approximately the same number as when the current UK government took office two years ago.

One potential explanation for this is that rather than staying unemployed here, a significant number of young people are leaving Wales to look for opportunities elsewhere. But for some of those remaining, the situation seems to be worsening, as the latest claimant count for those aged between 18-24 years of age shows.

In the last eight months, the number of long-term claimant benefits has gone up from 2,700 in January 2012 to 4,500 in August, an increase of nearly 70 per cent. The political debate, of course, is how this number can be reduced, and quickly. Whilst it was inevitable that some did try and point the finger at Westminster last week, the fact remains that much employment and training support is actually in the hands of the Welsh Government.

Given this, surely it would be better to focus on how to get these individuals, who can be directly identified from the claimant register, onto the various programmes currently being supported by tens of millions of pounds of European and Welsh Government funding. In fact, there is one specific amount of European money that has been allocated £104m to directly supply young people with the skills needed for learning and future employment.

Yet only a third of this funding has been paid out to date when we have a youth employment crisis on our hands and, more worryingly, it is well behind its own targets.

For example, 3,000 fewer individuals had gained qualifications by May 2012 and 8,000 fewer young people had gained other positive outcomes.

More worryingly, given concerns about a lost generation, only five per cent of participants on the various projects being funded are to be found in the hard to reach NEET (not in employment, education or training) group, against an overall target of twenty five per cent.

Whilst Welsh politicians may well be able to do little to influence macroeconomic forces around the World, they can, nevertheless, use the levers at their disposal to ensure that we maximise the job and training opportunities for our young people. Rather than listening to those trying to blame this on others, one would hope that they would instead take positive steps to ensure that this underspent pot of money is quickly allocated to dealing immediately with the issues facing a those young people in Wales today who remain at risk of becoming the ‘lost generation’.