The labour market continues to present a gloomy picture. While not as bad as some have feared, most of the important indicators are negative.
Employment and vacancies are slightly down, inactivity remains a problem, and unemployment is up again.”
One particular issue is entirely predictable. The hike in employer national insurance contributions, plus the Employment Rights Bill threatening to bring in unfair dismissal from day one and the clampdown on zero hours contracts, all mean that employers are extremely wary of taking on untried labour market entrants.
When the shrinking demand for graduates is coupled with near-record numbers with degrees and higher degrees, even well-qualified young people find it hard to get work. So it is not surprising that unemployment is rising fastest amongst young people, a worrying development as it is easy for early unemployment to slip into inactivity and permanent welfare dependence.
Although the data refer to a slightly earlier period, self-employment appears again to have drifted back and remains below the pre-Covid level. Again, Government policy (in relation to IR35 and the demands of the Making Tax Digital scheme) is making the environment for the self-employed much more difficult. This discourages people from setting out on their own account, or for older people continuing to be economically active.
Government policy towards the labour market should be much more considered and less ideologically driven.
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