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Friday, 18 November 2016

New Quarterly Labour Market Report from the Fraser of Allander Institute and Scottish Centre for Employment Research

Recent headline indicators of employment and unemployment provide some apparent good news about the Scottish economy. Yet some of these recent trends – including this week’s further fall in unemployment – are masking a number of underlying challenges, according to a new report out today by the Fraser of Allander Institute and the Scottish Centre for Employment Research at the University of Strathclyde.

On the basis of headline indicators such as the unemployment rate, Scotland’s labour market continues to perform relatively well in what continues to be a challenging economic environment.  However, some of the recent positive statistics hide a number of underlying challenges in the Scottish labour market. For instance, this report shows that over two thirds of the growth in employment over the past decade has been in part-time employment. In addition, the recent sharp fall in unemployment appears to stem, not from people finding work, but from people exiting the labour force.

Looking forward, the most significant development over the next 6 – 12 months will arguably be the impact of rising inflation on earnings and household incomes. This will erode the value of existing pay awards and with sluggish demand in the near term, this could translate into weak real earnings for those already in work and fewer opportunities for those seeking to gain work.

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