The employment rate in the UK was the highest it had ever been before the pandemic struck in 2020, causing a huge number of job losses as businesses were forced to close. Now the government has revealed there has been a steady increase in the number of people in jobs, with the employment rate having risen by 0.4 per cent over the last quarter.
Its latest Employment in the UK: July 2022 report showed the rate of employment in the UK was 75.9 per cent last month. While this is a growth on the previous three-month period, it is still 0.7 percentage points lower than between December 2019 and February 2020, before Coronavirus took over the world,.
A spokesperson for the Office for National Statistics (ONS) stated: “During the first year of the coronavirus (Covid-19) pandemic, there was a decrease in the employment rate and increases in the economic inactivity and unemployment rates for both men and women.”
“However, the unemployment rate for both men and women has now returned to levels similar to those seen before the coronavirus pandemic,” it was added.
In February 2020, ONS reported a record high employment rate of 76.5 per cent, showing the job market had significantly improved over the preceding few months and years. It had grown by 0.6 percentage points over the 12 months, and 0.4 percentage points from the previous quarter.
At the time, the government also revealed annual growth in total pay was 1.4 per cent and annual growth in regular pay was 1.8 per cent, with employees reaping the rewards of a stable economy.
The current situation is not so favourable, however, with The Guardian revealing pay rises have not been able to keep up with the soaring inflation increases.
Earnings across the private and public sector rose on average by 4.3 per cent in the three months to May 2022. However, as the cost of living is increasing at a rapid rate, this represents a 2.8 per cent drop in pay from the previous year.
According to the Trades Union Congress (TUC), the pay decrease is more likely to be as much as 3.7 per cent.
The Confederation of British Industry (CBI) believes businesses failing to recruit new members of staff is causing the problem of pay to become even worse.
Matthew Percival from CBI told the publication: “Persistent labour and skills shortages are hitting growth and business investment, exacerbating the cost-of-living crisis.”
Although the employment rate has been rising, the unemployment rate has remained relatively steady at 3.8 per cent, which is the same level it was before the pandemic.
This shows there is still a huge number of people who have yet to re-join the labour market since the outbreak of Covid-19, leaving many businesses short of staff. This has meant they have not been able to operate as effectively and efficiently as they had been previously, affecting the economy in the long-run.
Companies, therefore, should be focusing on recruiting more employees, such as those looking for Web3 jobs, as this will make their team more productive, and, subsequently, provide a much-needed boost to the overall economy. This may prevent inflation levels from soaring and the cost-of-living crisis from worsening, experts told the newspaper.