Comment
By Gavin Mochan
The good news this month is that, seemingly against all the odds, Scotland’s unemployment rate remained steady in the latest tally published by the Office for National Statistics (ONS). Having tracked ahead of the rest of Britain for the past several months, we might have expected to see a further escalation in job losses, but instead Scotland is now on level pegging as the UK unemployment rate jumped to a three-year high.
There are other reasons for cautious optimism, with hiring demand up for the fifth consecutive month since April’s crash. Nearly 48,000 jobs were advertised across Scotland in September, a 154 per cent increase on April. The cumulative rises in demand within supply chains, logistics, health, social care and science means their respective job levels are almost normal with last year, with each down less than 10% on the same period in 2019.
Furthermore, the new claimant count – an indicator of those who have recently lost their job – was relatively flat. There were 224,000 claimants in September, a modest increase of 2,000 from August.
On the surface, this all seems to indicate that we could be at a turning point in this catastrophe. But those are just the historical numbers, and they are only part of the story.
READ MORE: Scotland's unemployment rate remains steady as UK unemployment hits three-year high
The real-time context is that these figures are not yet capturing the impact from the closure of the Government’s job retention scheme at the end of this month. Although the furlough programme is set to be replaced by the job support scheme, this fresh programme from the Chancellor is far less generous than its predecessor as it will only top up incomes of employees who can work at least a third of their normal hours.
We’re also facing a second wave in coronavirus infection rates that has led to enhanced restrictions on people – consumers – and business in Scotland, particularly those in the Central Belt.
Hiring demand, the most leading indicator in employment market statistics, shows that October has the potential to regress on September’s progress. Hiring demand in the first 10 days of October was down 38% on the same period a year earlier, compared to an overall reduction of 29% in September.
READ MORE: Employment Scotland: Jobless total 'could hit three million next year'
Not surprisingly, young people between the ages of 16 and 24 still account for 41% of all unemployed people in Scotland, and hiring demand in lower wage categories is lacklustre, to say the least. In September, the number of vacancies with a salary of £25,000 or less was still down 38% year-on-year, while demand for people earning more than £37,000 had staged a near-full recovery, down just 3%.
We have not found an effective way to use this idle workforce, and this is a major concern. It risks the wholesale loss of skills for the broader economy, and the loss of confidence and self-esteem of individuals.
There is no silver bullet, but we must find better solutions. One possibility is the use of commission-only employment in the likes of sales posts, with workers allowed to continue collecting job seeker benefits. This would come at no additional cost to Government, while keeping young people in the flow of work.
Creativity will be required to keep the workforce in the game. It’s time to get our thinking caps on.
Gavin Mochan is Commercial Director at s1jobs.
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