Labour market statistics released today were broadly positive, with the ILO unemployment rate falling to 7.6%, its lowest level since the three months to June 2009. At the same time, the number of people in employment rose 177,000 over the three-month period, and now stands at 29.95mn.
Despite these positive figures, the squeeze on household incomes continues, with average total pay rising 0.7% over the year, compared with a CPI inflation rate of 2.2%. This squeeze on incomes has put pressure on households but the flipside is that across the economy, employment has fared far better than in previous recessions.
In manufacturing in particular companies took steps to hold onto their employees. As a result, the number of jobs in the sector fell considerably less than in previous recessionsThe graph below shows what happened to employment and output in the manufacturing sector in the 1990s and late 2000s recessions. Despite a smaller fall in output in the 1990s, employment fell by a far greater extent.
Manufacturing output and employment
Index (Q1 recession = 100)
In addition, while pay rates in manufacturing have not keep pace with inflation during the recession, nominal pay has risen, and it has risen considerably more than the whole-economy average.
- Across the whole economy, nominal pay increased 7.1% between 2008 Q1 and 2013 Q3. For manufacturing the correspondent figure was 12.3%.
- The average person working in manufacturing would now earn 16.4% more than the average person in the whole economy. That amounts to £75 per week.
Average weekly earnings (nominal)
Index (2008 = 100)
There is also a broader picture of support manufacturers offer to their employees to consider:
Manufacturers pay apprentices well, and offer more hours of on- and off-the-job training:
- The average pay for an engineering apprentice in 2012 was £7.03, up from £6.23 on the previous year. This is well above the national minimum wage for apprentices, which currently standard at £2.68 per hour, moreover, it is the second highest paid framework, falling just behind team leadership and management.
- Businesses employing technical and manual apprentices such as those taking engineering and electro technical frameworks are far more likely to pay overtime then in other frameworks such as business admin and team leadership and management.
- As in 2011, those learners in technical/manual apprenticeships spent the most time training – both on the job and off the job.
Manufacturers are also highly likely to offer their employees pensions
- 84% of manufacturers operate at least one type of DC pension scheme
- 28% of manufacturers still operate a DB scheme of some type
- 89% of non-manual staff in manufacturing are covered by an occupational pensions scheme