Scotland's employment rate falls behind UK's, but wages surge

At the same time, the UK employment rate rose from 74.6 to 75.5%.

The Scottish Government said it was firmly focused on the economy, but the Tories said the employment rate fall, especially against the UK rise, was “extremely worrying”.

Scotland’s unemployment rate remained unchanged at 4.1%, while the UK’s fell 0.2 percentage points to the same level.

There was also striking new data on wages, with early HMRC PAYE estimates for January putting the median monthly wage for payrolled employees at £2,096 in Scotland, an increase of 12.1% since pre-pandemic February 2020.

This was higher than the growth in median pay for the UK as a whole over the same period, which was 10.3%.

Looking at last year alone, Scotland had the biggest such pay jump of any region in the UK other than Northern Ireland, as wages rose 7.1% against a UK average of  6.3%.

One factor has been people leaving their previous jobs and then picking up higher wages when they get new ones as employers have to pay more to overcome staff shortages.

The estimated rate of economic activity - the proportion of working age people not in work and not seeking or available to work - was 22.6% in Scotland in the last three months of 2021, up 0.6 points in a quarter, and higher than the UK rate of 21.2%.

The experimental claimant count, which includes people on Jobseeker’s Allowance and Universal Credit for being unemployed, was 140,500 in Scotland in January, a drop of 3,600 or 2.5% in a month, but still 27,500 or 24.3% higher than before the pandemic. 

The Scottish claimant count rate last month was 4.4%, but 4.6% for the UK as a whole.

SNP employment minister Richard Lochhead said: “For October to December 2021, Scotland’s estimated employment rate fell over the quarter to 74.1% while the estimated unemployment rate remained unchanged at 4.1%.

“Separate HMRC early estimates show 2.4 million payrolled employees in Scotland in January 2022, 14,000 more than in February 2020, prior to the pandemic.

“Despite a period of further economic uncertainty due to the spread of Omicron, the Scottish Government is firmly focused on doing all we can to seize our economic potential and build an economy of secure, sustainable and satisfying jobs.

“That is why the 2022/23 Scottish Budget will invest an additional £68.3 million in employability and training to help businesses address skills shortages and help build a fairer, more prosperous economy for everyone.”

Tory MSP Liz Smith said: “It is extremely worrying that the number of people in work in Scotland fell in the last three months of the year – especially given that employment levels rose in the UK as a whole.

“This is yet more alarming evidence that Scotland is starting to lag behind our closest neighbours in our recovery from the pandemic.

“Despite their promises, the SNP failed to protect jobs and livelihoods in the wake of the Omicron variant. Scottish employers suffered through harsher restrictions than elsewhere in the UK in December, and the SNP’s dismally slow roll-out of support funding put businesses under even more pressure.

“The SNP must now take real action to support Scottish businesses to rebuild from the pandemic, to boost jobs and employment and to allow our wider economy to recover.”

However Tory Scottish Secretary Alister Jack sounded less alarmed.

He said: “The UK Government’s Plan for Jobs is working, with the number of Scots on the payroll remaining higher than before the pandemic, and unemployment rates stable. That is good news.

“While we must keep a close eye on the jobs market, our economy is proving resilient, thanks to the unprecedented package of measures we put in place at the start of the pandemic.

“We will continue to support people in Scotland to get jobs and to progress in work. This is a key part of our Levelling Up agenda, which will create opportunities and improve the lives of people in all parts of the UK.”