Two million jobless misery: whoís hit hardest by worst jobs outlook in UKís post-war history?

As expected, official labour market figures published earlier today by the Office for National Statistics (ONS) show that UK unemployment has topped the 2 million mark. Analysing the latest ONS figures John Philpott, Chief Economist at the Chartered Institute of Personnel and Development (CIPD) finds that these are the ëmost doleful set of jobs figures since the start of the recessioní and highlights the groups, sectors and regions that have so far borne the brunt of the jobs downturn.

Dr Philpott comments as follows:

Overall labour market situation and outlook

ìThese are the most doleful set of UK labour market figures since the start of the recession. Not only is unemployment back to where it was in 1997 but it now looks as though we are heading towards the worst outlook for jobs in the UKís post-war history. Full employment is not just slipping away, it is sinking without trace.

ìThe rise in the headline level of unemployment above 2 million is only part of the sorry story. Much more alarming is a surge in claimant unemployment in February – the monthly increase of 138,000 in the number of people claiming Jobseekersí Allowance surpasses even the darkest days of rising unemployment in previous recessions. The surge was driven by a flood of new claimants, reflecting todayís other ONS statistics showing that firms cut almost a quarter of a million employees (248,000) in the final three months of 2008 and made 266,000 people redundant in the three months ending in January 2009.

ìThe only bright spots in the figures are increasing part-time employment and temporary working, which people are turning to as an alternative to the dole, and self-employment, though CIPD soundings suggest that this might reflect a noticeable tendency of some firms to cut in-house services and instead contract former employees to supply the same services as external suppliers.

Sector impact

ìThe impact of the recession on jobs is fairly broadly based across the private sector. In proportionate terms the big losers according to the latest ONS figures are finance and business services, closely followed by manufacturing, with shops, hotels and restaurants another sector being hard hit. These sectors are at the forefront of a slump in job vacancies as well as redundancies.

ìAs the CIPD expected, the latest figures show that the private sector is bearing all the pain of the recession, with employment in the public sector continuing to rise and public sector pay running away from that in the private sector. In the year to January, pay rises for public employees were rising at 4% (including bonuses) compared with just 1.4% for employees in the private sector and 1.8% for the economy as a whole.

Gender impact

ìAs has been the case so far during the jobs downturn, men are being hit much harder than women, whether one looks at job prospects, redundancies or unemployment.

Age impact

ìThe recession is having a far bigger impact on employment for young people aged under-25, with older people now protected by anti-age discrimination laws and employers far less willing than in previous recessions to meet the pension liabilities associated with allowing older staff to take early retirement.

ìHowever, the age-impact of the recession looks different if one instead looks at unemployment. As the downturn bites, more young people seem to be turning to education as an alternative to joblessness. Older people meanwhile, although more likely to keep their jobs in the downturn, are finding it harder to get jobs if they do end up unemployed.

Regional impact

ìCompared with previous recessions, this jobs downturn looks far more broadly based in its regional impact. Different regions are experiencing their own monthly ups and downs but overall this is a ìweíre all in it togetherî recession with no obvious ëNorth-Southí divide so far.