Labour market statistics highlight “yawning gap” between public and private sectors

The latest labour market statistics highlight the need for the incoming government to address the “yawning gap” in performance between the public and private sectors, according to business groups.

The figures for the three months to February, released this morning, show public sector employment rose by 46,000 year on year, while private sector employment was down by 527,000.

On a quarterly basis, public employment was up 7,000 and private employment down 61,000, while earnings growth in the public sector stood at 3.7% – compared to 1.8% in the private sector.

Graeme Leach, chief economist at the Institute of Directors, said: “These latest figures reveal more worrying evidence that the government is still not taking appropriate steps to bring public spending under control. There remains a yawning gap between the performance of the public and private sectors.”

Adam Marshall, director of policy at the British Chambers of Commerce, added: “Despite the UK’s huge deficit, the figures show that public sector earnings are still increasing at more than double the rate of private sector earnings. This is unsustainable – and must be addressed whatever the result of the election.”

Long-term unemployment remains an issue, with today’s figures revealing an 89,000 increase in the number of people who had been out of a job more than 12 months to 726,000 – the highest figure since July 1997.

Nigel Meager, director of the Institute for Employment Studies, said: “Previous recessions left a devastating legacy of long-term worklessness in many communities and the real test for government policy is now to ensure that these people do not become locked-in to longer-term unemployment and inactivity.”

Kevin Green, chief executive of the Recruitment and Employment Confederation (REC), struck a more positive note, predicting that unemployment has now peaked.

“Despite positive figures in the last three months, it is clear that the jobs market is fragile. However, it is important to note that these figures are a lagging indicator of our dynamic labour market,” he said.

“The latest feedback from employers and recruiters confirms an increase in confidence and more hiring activity. The latest REC JobsOutlooksurvey shows that 96% of employers expect to maintain or grow their workforces over the next three months.”

Comments are closed.