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The dark side of the jobs miracle

The flipside of rising employment is stagnant productivity – which means either little growth in real wages or a squeeze on profit margins
March 26, 2019

We’re seeing a jobs miracle. Last week’s figures showed a net increase of 222,000 in employment in the three months to January. In truth, though, this is the silver lining to a dark cloud.

We can discount some reasons for this jobs growth. It’s not the case that the growth is in zero hours contracts. We know this because actual hours worked have also risen a lot. They rose 0.3 per cent in the three months to January. And in the past 12 months they’ve risen by 12.9m hours per week – equivalent to almost 350,000 full-time jobs.

Nor is it simply because vacancies are being filled faster. In fact, the number of unfilled vacancies has also risen – by 1 per cent in the last three months to a record 863,000.

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