Are employment levels one of the “better stories” of the Coalition, as Fraser Nelson claims? Not really.

by Stephen Tall on June 6, 2013

The Spectator’s editor Fraser Nelson is — rightly — very hot on politicians being accurate in their use of stats. For instance, he’s — rightly — called out both Nick Clegg and David Cameron for confusing (whether accidentally or deliberately) the terms ‘debt’ and ‘deficit’, claiming the former is falling when they mean the latter.

However, Fraser is sometimes a bit casual with facts himself — for instance, wrongly claiming that an old report for the Department for Education ‘proved’ the pupil premium was flawed when it did no such thing.

And today he makes a point of highlighting what he calls the “better story” of employment levels under the Coalition:

The truth is that, while there is much to worry about in Osborne’s policies, employment has been one of the better stories as the graph below demonstrates:

spectator employment graph may 2013

But, despite what Fraser implies, raw numbers are NOT the best way to understand what’s happening in the labour market. What matters most is the employment rate — ie, what proportion of people of working age are currently in employment.

And that graph (from the ONS) tells a much more sobering story of the past five years. The employment rate remains significantly below where it was in 2008, the opposite of Fraser’s happy graph:

ons employment rate - may 2013

To understand the current jobs market even better it’s well worth a look at this graph of under-employment in the UK — ie, the extent to which workers are willing to supply more hours of work than their employers are prepared to offer — devised by David Bell and David Blanchflower and published by NIESR:

niesr under-employment rate - may 2013

As NIESR highlights:

Underemployment is particularly concentrated among the young, where unemployment rates are close to 20 per cent. In 2012, 30 per cent of those aged 16 to 24 that did have jobs wished to work longer hours. This means that the labour market for the young is even more difficult than the raw unemployment rates imply. Even if there was an upturn in demand, employers would likely extend the hours of existing workers before taking the risk of hiring new young employees. Ethnic minorities also have high rates of underemployment, particularly those that describe themselves as Black or Black British.

There will always be lies, damned lies and statistics. But I hope we can agree that using absolute figures (like the numbers employed) without also offering the context (the numbers available to be employed) is unhelpful.

* Stephen Tall is Co-Editor of Liberal Democrat Voice, a Research Associate for the liberal think-tank CentreForum, and also writes at his own site, The Collected Stephen Tall.