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News : UK Economy Last Updated: Dec 13, 2012 - 7:06 AM

UK underemployment rises by 1m; Most new jobs growth at top and bottom of economic pyramid
By Michael Hennigan, Finfacts founder and editor
Dec 13, 2012 - 6:56 AM

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Office for National Statistics (ONS)

While it was reported on Wednesday that UK employment hit a record in the three months to October, other data shows that the number of underemployed workers in the UK i.e. those who want to work more hours, has risen by an estimated 1m (or 47.3%) since the start of the economic downturn in 2008 to stand at 3.05m in 2012. Nearly two thirds of the 1m increase took place in the 12 months between 2008 and 2009, when the economy was in recession. From 2000 to just before the 2008/09 recession the number of people underemployed was relatively steady and since 2009 the number has been rising, although at a much slower rate than during the recession. Almost two-thirds of the underemployed were part-timers. Most new jobs growth since 2010 has been at the top and bottom of the economic pyramid

Professionals, technicians and managers are leading a jobs boom that is defying economic gravity and reshaping Britain’s labour market, Financial Times research has found. Jobs are being created at the top and bottom of the skills scale, while those in the middle ranking jobs -- including office administrators and manufacturing workers - - are losing out.

The FT reported last month that net UK employment had grown more than 750,000 since a low point in early 2010. However, this rise has coincided with the squeezing of pay with the median salary for a full-time worker in the UK up 1.4% in 2011 to £26,244, against a headline CPI inflation rate of 5% or higher, according to the Annual Survey of Hours and Earnings from the Office for National Statistics (ONS).

Wednesday's data showed that average earnings were still behind inflation in October with average annual growth of just 1.3% - - - less than half the rate of inflation.

Real earnings have been falling since the summer of 2010.

There has been a rise in part-time and temporary work and self-employment, much of it not by choice. FT research last month showed that employment in professional occupations – which include lawyers, accountants and management consultants - - has grown more than 230,000, or 4.4%, since early 2010, the fastest increase of any group. The second biggest rise has been in associate professional and technical occupations, which range from engineering technicians and IT support staff to financial advisers, graphic designers and sports coaches. The number of managers has also grown in number.

The biggest drop was the 160,000 or 4.8% losses among administrative and secretarial staff. Process, plant and machine operators also fell, including electricians and machine fitters. But at the bottom end, so-called elementary jobs - - a category that includes waiters, bar staff, kitchen assistants, security guards and cleaners - - are up 2.5%.

Just over half of the new employment is part-time and a fifth is temporary. More than 260,000 of the new workers are self-employed, taking the total to a near-record 4.2m but three-quarters of this increase has also been part time.

The ONS said [pdf] that the number of underemployed workers was fairly stable until the run-up to the recession in 2008, but grew sharply after that. Almost two-thirds of the increase took place in the 12 months between 2008 and 2009, when the economy was in recession. The number has continued to rise since then, but at a much slower rate.

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