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Adam Peacock Principal Development Officer Research & Information Team

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1 Adam Peacock Principal Development Officer Research & Information Team
People and the Lincolnshire Economy – A look at the local labour market Adam Peacock Principal Development Officer Research & Information Team

2 The Local Labour Market
People who Work in Lincolnshire Live in Lincolnshire Invest in Lincolnshire What do we mean by ‘labour market’? Definition The market in which wages, salaries, and conditions of employment are determined in the context of the supply of labour (the labour force) and the demand for labour These 4 aspects all impact on the local labour market in some form or another Concentrating on the top two Visit Lincolnshire

3 Local Labour Market Indicators
Unemployment Employment Economic Inactivity Vacancies Qualifications Earnings Job creation

4 Local Labour Market Overview
Indicator No. % England (%) Working age people 429,000 Working age people in employment 318,000 74 70 No. of employees 272,000 86 87 No. self employed 46,000 14 13 No. of people not in employment 111,000 26 30 No. of people unemployed 22,000 6.4 7.8 No. of people economically inactive 89,000 21 24 No. of people on out-of-work benefits 60,000 Looking at the period July 2010 – June 2011 Economically inactive includes students of which there are approx 20,000. Also 16,000 of these state that they want to work Regarding people on out of work benefits this measure does include those who have been moved onto ESA whereas there are other measures Source: Annual Population Survey

5 Measuring Unemployment
Claimant Count (Job Seekers Allowance) ILO unemployment rate Worklessness Looking at unemployment in more detail, a key indicator of economic performance and one of our key focuses when it comes to monitoring trends ‘Unemployed claimants’ includes eligible people of working age (16-64) claiming unemployment benefit (currently Jobseekers Allowance - JSA) and National Insurance credits. It excludes large groups of people who may consider themselves to be unemployed and looking for work, such as partners of JSA claimants. It can include some people who are employed under the International Labour Organisation (ILO) definition, but still claim JSA because they work less than 16 hours a week. An alternative measure of unemployment is the International Labour Organisation (ILO) definition, which includes all those who are out of work, available to start work, and actively looking for a job. ILO unemployment is measured by a regular survey of the national labour force. The Government commonly uses the ILO figures, which tends to be higher than the claimant count. The claimant count however does provide useful, timely, and detailed statistics on unemployment trends at the local level. Worklessness - Expanding the measure of claimant count so that it considers all those who are claiming out of work benefits (such as Incapacity Benefit and Severe Disablement Allowance) and not just those on Job Seekers’ Allowance, results in a measure of worklessness.

6 Claimant Count Key point here is that Lincolnshire’s claimant rate has consistently remained below the national rate Source: Office for National Statistics

7 Unemployment Over Time
31,064 26,291 Source: Office for National Statistics 24,332 16,401 16,390 15,682 12,995 14,617 13,356 First set of data available Highest recorded figure Time taken to halve – 3 years Peak post early 90s recession Time taken to halve – 4 years Halve again – 5 years Lowest recorded figure Start of the increase – recessionary period Peak post recession Latest figure 7,565 6,528 5,484

8 ILO Unemployment Rate This is measure of unemployment which is preferred by government and subsequently is the one that gets reported on the news The ILO, which stands for International Labour Organisation, measures all those who are out of work, available to start work, and actively looking for a job Source: Annual Population Survey

9 ILO Unemployment Rate Average Rate 2009 Source: Taylor Associates
this map highlights areas across the county and demonstrates that higher levels of this type of unemployment are not confined to urban areas. Many rural areas are highlighted, particularly those that are between service centres. This could point to accessibility issues playing a role in higher levels of unemployment in these areas. The ILO measure also highlights that unemployment may be more of an issue for the county, and certain areas within it, than JSA statistics alone portray. It also indicates that there is a larger available workforce in these areas than official figures indicate. Source: Taylor Associates

10 Worklessness Average Rate 2009
Around one in three wards in the county have levels of worklessness that are higher than the national average. At a zone level, worklessness ranges from 8% in Bourne up to 22% in Mablethorpe. There are a number of areas, particularly in the east, that have levels that are well above the national average. Most of the wards in the Mablethorpe economic zone have rates that are double the county and national average, with the Mablethorpe East ward being almost three times higher. However, high levels of worklessness can also be seen in rural areas of the east as well, such as Halton Holegate and North Holme wards. In the west of the county, worklessness is mainly concentrated in the urban areas of Gainsborough, Lincoln and Grantham. Over the last decade there has been little change in those areas where levels of worklessness are high. Four in five of these wards also had high levels of worklessness back in This demonstrates the deep rooted and complex nature of the problem and how it can to take hold in a community. Source: Department for Work and Pensions

11 Types of unemployment 9% of the population locally compared to 8% nationally Youth unemployment in Lincolnshire also increased to 5,560 people with 110 more claimants amongst the age group than there were in January. This age group now make up 34% of all those unemployed in the county compared to 30% nationally. The number of people who have been unemployed for longer than six months increased by 280 people to 5,925 in total. The long term unemployed currently make up 36% of all people unemployed in Lincolnshire compared to 41% nationally. Source: Office for National Statistics

12 Usual Occupation of Job Seekers
The most recent data shows that the numbers of jobseekers across all of the occupations have risen since the beginning of 2012, though the most sustained increase can be seen in administrative, sales and customer service roles since summer This is no doubt a result of cuts in the public sector which would have started to take effect at around this point. Figure 2 also shows that it was those in skilled trades, management posts and professional roles that saw the greatest impact as a result of the recession compared to their historical claimant patterns. Source: Office for National Statistics

13 Job Vacancies These are Jobcentre Plus figures, with the job centre capturing around a third of all job vacancies advertised Source: Office for National Statistics

14 Vacancy Types to Jobseeker Types
Sales, customer service, and elementary occupations have the biggest gaps in number terms between jobseekers and vacancies In % terms the biggest gap is in admin and secretarial posts potentially reflecting some of the job losses we have seen recently in the public sector Source: Office for National Statistics

15 No. of Job Seekers per Vacancy
Source: Office for National Statistics Overall we can see that the ratio of job seekers to vacancies has closely mirrored that of the national rate Again we can see the seasonal peaks in unemployment at the beginning of the year and the increased rate since the recession 2008 2009 2011 2010

16 Employment I referred earlier to the better than national employment rate in the county on the other hand……………….. We can see from this chart that the number of people in employment fell during the recession and as of 2011 subsequently got back close to levels seen in 2008 We can also see the impact that the recession had on levels of part time and full time employment shows that those employment trends that began in the second half of 2010 have continued into 2011 with full time employment and the overall employment rate generally rising and levels of part time employment falling. In fact the county’s level of full time employment (77.8%) amongst those aged is at its highest ever recorded, whilst part time employment levels are at their lowest, this being quite the opposite compared to the national picture. Source: Annual Population Survey

17 Employment by Gender Looking at employment in more detail, specifically by gender Source: Annual Population Survey

18 Employment by Gender Source: Annual Population Survey

19 Population aged 16-74 with no qualifications

20 Qualifications Source: Annual Population Survey

21 Education 82% of school pupils achieve 5 GCSEs A*-C compared to 79% nationally Approx 20,000 students in the county University of Lincoln graduate retention rate of 27% Disparities in skills levels between areas are not due primarily to the quality of education being offered in each area; Lincolnshire schools consistently perform above the national average for pupil attainment at Levels 2 and 3. A problem that Lincolnshire experiences is that once people have gained higher level skills, they are more likely to migrate to areas of the country where growth and incomes are higher41. Those that remain in the county, more often than not, do not go on to translate early educational attainment into higher levels skills and qualifications. So whilst 82% of school pupils in the county achieve 5 GCSEs A-C, 66% of the working age population are qualified to at least NVQ level 2. This pattern continues when we look at higher education. Above Loughborough and Leicester’s De Montfort University but below some of the more established universities in the region. Overall, the East Midlands region has one of the lowest retention rates in the country. Therefore, Lincolnshire, like other counties in the region, does appear to lose those with higher level skills on graduation to other areas of the country where employment opportunities are greater

22 Travel to Work Areas 1991 2001 This loss of skills to the county is continued when we look at Travel to Work Areas (TTWA’s), where at least 75 percent of the resident economically active population work and live, and live and work. When compared to the TTWA’s produced using 1991 Census data, it shows that Lincoln and Grantham have both extended their spheres of influence on the west side of the county with other notable changes being the influence exerted on the county by areas outside of the county e.g. Peterborough and Grimsby. The change from 1991 also shows the increased mobility around the county with the number of TTWA’s down from 13 to 9. We know from the 2001 census that approx 15 per cent of all Lincolnshire residents in employment worked outside of the county. This represents over 45,000 people leaving the county to work compared with around 30,000 in Residence based employment growth in Lincolnshire has been stronger than workplace based growth in Lincolnshire over the past 10 years. • The outflow of commuters represents a loss of 10,500 people qualified to degree level or above. • The greatest concentration of out-commuters live on the boundary of the county, with the largest proportion living in the south in the southern extremities of South Kesteven and South Holland. • The destinations of out-commuters vary according to where they live. However, 26 per cent of out-commuters from Lincolnshire travel to Peterborough, with North East Lincolnshire and North Lincolnshire together accounting for a further 20 per cent. • Three out-commuting hot spot areas have been identified as part of this research, each of which represents a slightly different profile of commuters: - the north of the county (9,290 out-commuters, 21 per cent of the total) - the west (6,150 out-commuters, 14 per cent of the total) - the south (18,510 out-commuters, 41 per cent of the total) Source: Census 2001, Office for National Statistics

23 Skills Gap Proportion of organisations that feel there is a significant gap between the type of skills their current employees have now and those that they need to meet their current business objectives So despite these improvements and in light of these educational and worker mobility issues, employers are still reporting skills issues with their workforce. For the first time in nearly a decade of employer surveys, results from the 2009 survey showed an increase (albeit small from 9% in 2005 to 11%) in the proportion of employers experiencing a skills gap i.e. a gap in the skills that their employees have and those they need to meet current business objectives. This gap in skills in the workforce is lower than national rates (both 13% in 2011). Recession has maybe woken up some employers to the health of their business and what they need to do survive and prosper So we can actually see this in a positive light It is unclear at this stage how much of a part the economic downturn in the latter half of 2008, and the subsequent recession in 2009, will have played in increasing the skills gap. Businesses when responding to the recent countywide employer survey were most likely to state that they had reacted to the current economic conditions by cutting costs and expenditure, with training budgets likely to be included in this. Those employers that are reporting skills gaps now are most likely to report personal skills lacking whereas in previous years it The proportion of those employers reporting ICT skills gap has remained fairly constant (38%)

24 Earnings 4.1% 6.7% 7.2% Source: Annual Survey of Hours and Earnings
The rise in earnings between 2008 and 2011 has been greater in the county than nationally

25 Job Creation Source: Office for National Statistics, Experian
Working age population growth against job growth What this slide demonstrates is that despite continued growth in the working age population, growth in jobs has kept pace, whilst, if we ignore the recessionary period, unemployment has fallen. This shows that the county economy has been consistently good at creating working opportunities for its growing resident population Source: Office for National Statistics, Experian

26 In Summary Unemployment levels should(!) start to fall
Compared nationally, unemployment rate is generally lower, and employment rate is higher Employment tends to be lower skilled and lower wage (though situation is improving) With current high levels of unemployment, the short term challenge is one of job creation and safeguarding Longer term, the challenge is to create higher skilled jobs Both in the short term and longer term

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