Record levels of under-employment and the longest real wage squeeze in over a century have left job quality close to a 20-year low, despite the recent rise in employment, according to the TUC’s job quality index published today (Wednesday).
The TUC job quality index, published ahead of the latest employment figures later this morning, tracks pay rises against the rising cost of living and the number of people who can’t find enough hours in their current job. The index uses ONS data on wage growth, under-employment and inflation from 1992 onwards.
The index shows that employment rates and job quality have broadly tracked each other for most of the last 20 years. Employment and job quality both rose sharply between 1995 and 2001, stayed constant until mid-2006 and fell sharply during the recession.
However the index shows that the link between rising employment and increasing job quality has broken down in recent years. While the employment rate is back to its 2009 level (though it is still someway short of its pre-recession health), job quality has remained close to a 20-year low.
The TUC welcomes rising employment levels but is concerned about the quality of jobs being created. With under-employment at a record high of 1.45m and workers suffering the longest real wage squeeze in over a century, the TUC fears many people are feeling little or no benefit from the economic recovery.
The fact that job quality has remained close to an historic low raises serious questions about the kind of recovery we are experiencing, says the TUC. It is vital that the recovery doesn’t just create any old jobs, but the right kind of employment with decent pay rises for all.
The index follows recent analysis by the Office for National Statistics which found that real household disposable incomes have barely risen in the last four years despite the economy growing by over £60bn. A recent TUC report The Low Pay Recovery also found that 80 per cent of net job creation since June 2010 had taken place in industries where the average wage is less than £8 per hour.
TUC General Secretary Frances O’Grady said: “A growing economy is supposed to improve people’s living standards through better jobs and higher wages. But too few workers have felt these benefits during the recent recovery.
“Job creation – whatever the quality – is better than rising unemployment. But for too many people this simply means moving from the hardship of unemployment into working poverty.
“Working people deserve a fair share of the benefits of recovery. Otherwise, there is a risk that the poorly paid, insecure contracts that were seen as a pragmatic response to recession will become a permanent feature of the labour market.
“We need to see start seeing healthier pay rises and more high quality jobs created. Otherwise, this joyless recovery is going to pass most people by.”