Falling employment rate highlights urgent need for policy action on jobs

November 2004
Management Services;Nov2004, Vol. 48 Issue 11, p4
This article reports on the official labour market figures released by the British Office of National Statistics as of November 2004. The labour market figures point to a fall in the employment rate, while the number of people of working age without a job has reached yet another record high. These results highlight the urgency for tougher policy action to free up the supply side of the British jobs market, a fact that must not be overlooked despite a further welcome reduction in the unemployment count, according to John Philpott, Chief Economist at the Chartered Institute of Personnel and Development. He said that a combination of more economically inactive people and rising numbers of job vacancies signals a mismatch between labour demand and supply that might trigger higher wage inflation. Increased hiring of immigrant workers is helping ease the resulting pressure, which in part explains why average earnings are not rising faster at present. Philphott also stated that the new Secretary of State for Work and Pensions, Alan Johnson, must immediately reinvigorate the government's welfare to work agenda with a more vigorous package of measures combining tougher benefit sanctions with active support to overcome the various barriers preventing economically inactive people from job filling vacancies.


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