Guardian:
Unemployment is at its lowest since 1975, so why do people feel worse off?
17 May 2017
One reason for the weakness of earnings growth is the ferocious squeeze on public sector pay, which – stripped of bonus payments – is rising at just 1.3% a year. A second factor is that employers are able to buy in cheap labour from overseas. Migration from other EU countries has not fallen off a cliff despite the result of last summer’s referendum: according to the Office for National Statistics, the number of non-UK nationals from the EU working in the UK rose by 171,000 to 2.32 million between the first quarter of 2016 and the first quarter of 2017. This continues a trend, which has seen the number of workers from the other 27 EU countries double since the recession of 2008-09. Finally, the nature of work seems to have changed. Work by David Blanchflower, Rui Costa and Stephen Machin has shown that earnings growth for the self-employed – who account for 15% of the workforce – has been particularly weak in recent years. People are working flat out in the gig economy but still struggling to make ends meet. The labour market has, for want of a better word, been Uberised.