Immigrants have been among the main beneficiaries of the employment boom but not at the expense of workers born in the UK, and London is not the main driver for the boom.
These are among the findings of Setting the Record Straight, a Resolution Foundation analysis which, using ONS statistics, looks into the reasons behind the record 75.7% employment rate, up more than two percentage points from the rate in 2008.
The findings indicate that London’s disproportionate contribution to jobs is down to population growth and that there has been employment rate catch up in urban areas across the country. Weaknesses across UK employment over the past 10 years include stagnation in some rural and smaller urban areas and the “extremely” poor performance of pay and productivity.
Migrants, the study finds, have accounted for two-thirds of the increase in employment since 2008 (in part because they have grown as a share of the population) but in the same period the employment rate for people born in the UK has risen by more than two percentage points to a record high of 75.8%.
The report does not support those who suggest employment growth is London-centric or that urban centres outside the capital have been “left behind”. Rising employment, it finds, has been driven by parts of the country with relatively low-employment catching up.
The report states: “The story of the last decade is that of lower-employment urban Britain catching up with the rest of the country, while low-employment rural areas have done less well.” The reason why London accounts for one third of the net employment increase since 2008 is its population growth. “It is the size and expansion of the capital, not its labour market performance, which stands out,” the study’s authors say.
It is also often claimed that the employment growth witnessed in the UK recently is only in poorly paid and minimum wage roles. This, the analysis suggests, is not the case (despite pay performance being poor across most sectors), with half of all jobs growth since 2008 coming in professional occupations, business services and real estate jobs.
Sectors that have seen a decrease in jobs include retail and finance while the ageing society means that there has been an in increase in jobs in health and social care.
As widely recognised, rising employment has been accompanied by greater job insecurity, particularly for 18-29 year olds, where it has risen 50% faster than for older people. However, over the past year, most jobs growth has been in full-time employee roles.
The UK has 780,000 people on zero-hour contracts, 950,000 agency workers and one in seven work workers are self-employed – all above pre-2008 financial crisis levels.
Co-founder of the report Stephen Clarke, senior economic analysts at the Resolution Foundation, said: “Record employment levels have changed Britain and seen falling employment inequality, as the 2.7 million jobs boom has particularly benefited lower-income families and disadvantaged groups.
“While the jobs surge has not been as dominated by London or low-paid work as some claim, new challenges have developed – particularly for younger workers and with a big rise in insecure work. And while more people are working, as a country, we are still earning less each week for doing so than we were 10 years ago.”
The launch event was addressed by employment minister Alok Sharma who said that the report highlighted three priorities for government: “good jobs, rather than any job; further employment progress for disadvantaged groups; and a focus on progression so that workers can escape out of low pay”.
He warned against complacency and said the government would be “taking further action to increase employment rates for under-represented groups by developing innovative support programmes.”