Winners and losers in the 2011-12 jobs market

I’m slightly hesitant about naming anyone in my blog at the moment. Within days of mentioning Clive Dunn, the Dad’s Army actor died at the age of 91. Last week’s Dallas themed post was equally swiftly followed by the death of 81 year old Larry Hagman. The latter was most famous for playing the character JR Ewing, whose fictional close encounter with death a generation ago meant that “Who Shot JR?” for a short while usurped “Who Killed JFK?” as the question most associated with the Texan city. It was therefore somehow fitting that Mr Hagman passed away on November 23^rd, just one day after the 49^th anniversary of the assassination of the former United States president.

Back here at home 22 November saw the Office for National Statistics (ONS) release the latest Annual Survey of Hours and Earnings (ASHE). The results confirm the extent of the real pay squeeze between spring 2011 and 2012, with hourly median pay growth for full-time employees only around half the corresponding 3% rise in price inflation as measured by the Consumer Prices Index. But with the national minimum wage helping to support pay in the lower half of the earnings league, the top 10% of earners felt the biggest squeeze. The pay of full-time employees in the bottom tenth of the distribution increased by 2.3%, while pay for those in the top tenth fell by 0.2% (i.e. a real hourly pay cut of 3.2%).

My initial response to this was that although the pay gap between top, middle and low earners remains very wide in the UK and is still far wider than a generation ago, 2011-12 has as least turned out to be something of a ‘we’re all in it together’ year in Britain’s jobs market with pay at the top hit hardest by the double dip recession. However, I was also interested to see how pay growth between spring 2011 and 2012 compared with employment growth during roughly the same period (April-June in each year), as discussed in my blog posting of 12 November which listed the top 10 fastest growing occupations in the past year and the 10 occupations recording the biggest loss of employment.

Growing demand for certain types of labour might result in a combination of relatively strong growth in both employment and pay, or vice versa where demand is weak. But it’s also possible that faster or slower pay growth could help price some types of workers out of or into jobs, thereby causing pay and employment growth to diverge.   

Although the ASHE lists the number of jobs in each occupation as well as pay and hours these are considered indicative rather than accurate estimates, so it’s best to compare the ASHE results with the broadly corresponding Labour Force Survey employment estimates.

Listed according to their position in the Standard Occupational Classification (SOC) the 10 fastest growing occupations saw the following percentage change in median hourly earnings for full-time employees: Production Managers and Directors in Manufacturing (+1.1%), Human Resource Managers and Directors (+2.2%), Information Technology Specialist Managers (-0.5%),  Management Consultants and Business Analysts (-0.3%), Quality Assurance and Regulatory Professionals (-2.8%), Graphic Designers (+1.0%), Financial Accounts Managers (+0.7%), Credit Controllers (+0.5%), Chefs (+0.5%) and Sales and Retail Assistants (+1.9%).

The corresponding changes for the 10 occupations registering the biggest jobs losses are: Financial Managers and Directors (+0.2%), Chartered and Certified Accountants (+5.5%), Youth and Community Workers (-2.8%), Local Government Administrative Occupations (+0.8%), Typists and Related Keyboard Occupations (+1.8%),  Electricians and Electrical Fitters (+0.1%), Plumbers and Heating and Ventilating Engineers (-0.5%), Teaching Assistants (+2.5%), Nursing Auxiliaries (+1.4%), Security Guards and Related Occupations (+0.8).

Interestingly the only one of these 20 occupations to register a real hourly pay increase, Chartered and Certified Accountants, was one of the biggest job shedders (down 39,000 or 16.8% on the year), suggesting that this group was content to trade-off higher pay against jobs. The biggest losers are Youth and Community Workers, who suffered a 5.8% real hourly pay cut as well as shedding 25,000 jobs, a 30% reduction in numbers. Of the remainder, Human Resource Managers and Directors is the occupation that fares best (a modest hourly pay cut of 0.8%, alongside employment growth of 22,000, or 19.2%), indicating relatively strong demand for this group. Ironically, therefore, HR managers and directors, who are employed to deliver news about pay and job cuts to others in the workplace, have of late been keeping the best news for themselves.