Government target of 80% of working age population in work looks set to fail

The government’s aim of having 80% of the working age population in work is looking more unlikely than ever, a leading economist has warned.

The latest official job market figures, published today, show that the employment rate is 74.4%, down 0.1 percentage point on the quarter, and down 0.3 percentage point on the year

Ian Brinkley, chief economist at The Work Foundation, said: “After a promising start to 2007, it looks as if the labour market might be stalling once again.

“Employment is still up and unemployment still down this month, but the movements are small. And we seem to be going backwards on the working age employment rate.

“The government’s aspiration of having 80% of the working age population in work is looking more remote because the rate has fallen.”

The number of economically inactive people of working age increased by 41,000 over the quarter and by 190,000 over the year to reach 7.97 million, the highest figure since comparable records began in 1971.

Brinkley warned that the situation may get worse before it gets better as the job consequences of the credit crunch, the continued squeeze on wages, and the forecast slowdown in overall economic growth starts to bite.

Meanwhile, average earnings rose by 3.7% during the quarter. The Office for National Statistics said the rise was mainly spurred by increases in private sector services wages, which included bonuses in the financial sector.

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