Newspaper headlines report shortages of workers in some sectors in London so are we looking at the green shoots of an economic recovery for the capital in the Autumn? The GLA’s new economic forecast (Labour market update for London – August 2021 – London Datastore) paints a more complicated and precarious picture across London with challenges facing many London workers. And inevitably the situation for older workers is very uncertain, though precise data is always more difficult to obtain.
The number of payrolled workers in London is broadly similar to a year ago, yet still lags behind the rest of the UK. But they are less than the level before the pandemic and worryingly the annual rate of growth in payrolled workers remains relatively weak in all parts of London, especially in Outer London – the West and North-western parts.
Employment rates in London look more stable in recent quarters of nearly 75 percent but remain down on the previous year.
The unemployment rate (for the three months ending June 2021) is 6.4 percent which fell slightly yet still is up by 1.5 percent from a year earlier, though crucially remains higher than the UK average of 4.7%.
The share of residents claiming unemployment-related benefits of 7.3 percent though did stop falling in London for the first time since April.
London’s economic inactivity rate ( this is the proportion of 16- to 64-year-olds not in work and either not looking for or unable to work ) was a fifth, which increased marginally on the quarter but is virtually unchanged on the year. Commentators are also flagging up the growing problem of low pay in London (Richard Brown: London’s economy can no longer afford to pay low wages – OnLondon). It’s been estimated pre-pandemic that 40 percent of Londoners had an income below what is needed for a minimum standard of living in London well above the 29 percent figure for the UK – London is a costly place to live. A quarter of workers in retail, hospitality, admin support, social work and entertainment are being paid less than the minimum hourly rate needed to live in London. Hospitality wages are particularly low – nearly two-thirds of those working were paid less than the London Living Wage.
Yet it’s noteworthy that those low-paid sectors are where there are the well-publicised labour shortages. The ending of furlough and the temporary £20 per week increase in Universal Credit may change that picture, but the risk as Richard Brown argues is that this could push more workers (including older workers ) into poverty with the resulting problems.
Tim Whitaker, Trustee, Wise Age