Executive summary

Over the long term...

• Aggregate employment performance has improved. Employment rates are close to historic highs. Unemployment rates are close to historic lows.

• But a focus on aggregate performance obscures important changes around this average.

• The employment gaps between best and worst performing parts of the country have changed little over time.

• Any job growth is split between jobs that provide security of tenure and income and those that do not. Just under half the working age population are in a full-time permanent job.

• The chances of escaping low pay were rising over time until around 2015, since when the chances of escaping low pay have fallen back somewhat.

• The chances of getting a full-time permanent job from insecure work or non-employment are broadly unchanged. All movements into full-time work vary with the economic cycle - rising in good times and falling in bad times - but only the share of people moving between economic inactivity and full-time employment has risen, a little, compared to similar points in previous economic cycles.

• The UK has replaced its long-term unemployment problem with a long-term sickness problem. Aggregate economic performance seems to be linked to rates of sickness.

• Earnings, adjusted for inflation, have risen for most groups over the past 30 years, but they have stagnated for those in the middle and towards the top over the last 15 years.

• Faster recent pay growth at the bottom - largely the result of increases in the minimum wage and associated spillovers for those earning just above the minimum wage – has not been enough to stop pay levels between top and bottom from widening over the longer term. Relative pay has narrowed. The absolute pay gap has widened.

• Work is still unevenly divided across households: Since the pandemic, there have been renewed rises in the proportion of households where everyone is working and in the proportion of households where no-one is working.

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24 June 2024     Paper Number CEPEA060

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This CEP election analysis is published under the centre's Labour programme.

This publication comes under the following theme: Labour market inequalities: Causes and cures