Employment figures: how the unpaid get counted

http://www.guardian.co.uk/news/datablog/2013/jan/15/employment-figures-how-unpaid-get-counted

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Every month the Office for National Statistics (ONS) produces a set of rolling employment figures. Before the credit crunch and downturn these were largely ignored but as the UK's depression has deepened, every month's release has become a moment of truth for the government.

Over the past year or so, the government has been able to breathe somewhat easier: total employment has risen by 513,000.

Of course the number of those out of work will not always fall as employment rises – the total number of jobs created has to keep up with population growth or, to be more specific, growth in the numbers of those who are of working age. But unemployment has also decreased. James Ball has more on this debate.

But to go back to those monthly releases: here they all are dating back to 2008 (and further in the archive). Click through to November's release. If you scroll down on the PDF, you will eventually get to table three. We have reproduced it below.

The table shows us the breakdown in the types of work people are doing. Column one shows the total number of those counted as employed. In November this stood at 29,576,000. Drop a little lower and you will see the change from the year before, +513,000. That's your increase in total employment over the past 12 months.

Columns two through five are subcategories of total employment (column one). Obviously people do different types of work. Some are self-employed, some are unpaid family workers but the vast majority are employees for shops, companies, law firms, the NHS and the like.

As you may have also noticed by now, column five counts those who are in government schemes but defined as employed.

It is totally usual to claim jobseeker's allowance (JSA) – more than a million do – without being part of a government scheme. Those people aren't counted in column five. And not everyone on a government scheme is claiming JSA. There are for example people in the government's Work Programme who are being given non-financial support while they work in a paid job. But there are others who are still claiming the dole while on a programme. So being on a government scheme per se doesn't tell you if you are paid or not.

What is interesting here is that the number in this column has grown considerably: by some 86% over the past year. All of this is added to new employment. We also know that the majority of back-to-work schemes don't involve subsidy or payment.

So experts were aware of what the ONS was doing in counting people on such schemes as employment and most – including of course the minister for employment Mark Hoban – didn't like it.

Is that where it ends? No. A number of months ago, parliamentarians and those campaigning against work-for-your-benefit schemes noticed that people doing unpaid work experience – a growing band of people – could be classified by the ONS as employees of companies.

This meant that although they were on government training and employment schemes (as seen in column five) they were actually being lumped in among the 25 million plus employees in column two.

We asked the ONS in November whether they could tell us how many people on government back-to-work schemes were being classed as workers – in effect we wanted to separate out the columns.

After some serious crunching the ONS eventually gave us an answer with comparisons dating back to 2005.

The results were eye-opening. It turns out that on top of the 166,000 in government training and work schemes counted as employed (154,000 when not seasonally adjusted) there were another 57,000 who were also on such schemes but hidden away among general employees. This figure has almost doubled from the year before.

This gives us a total of 214,000 people (non seasonally adjusted) who are being counted as employed but are actually on government training and back-to-work schemes.

So are all these people still claiming benefits rather than working in a paid job? The ONS derives the UK's employment data from the labour force survey (LFS) and for their purposes they don't bother to directly record whether people are getting a wage or not.

What they do ask is what government scheme people believe they are on (the LFS is self-reported and therefore comes with a general health warning) and what kind of work they might be doing.

Looking at the micro data from the survey itself, we can say with high certainty that of those 57,000, at least one-third aren't being paid. That is because the 57,000 number is made up of 18,000 people on the Work Experience scheme.

This is an unpaid but voluntary scheme which the unemployed are encouraged – some say coerced – into doing by jobcentre case managers, while still claiming unemployment benefits.

Examining all of the micro data

By the nature of each scheme and the ONS categorisation we can say with certainty that a clear majority of these people are on benefits, rising to one sixth. It is the "any other" scheme column that is hard to categorise, given that it is obscure.

In conclusion, we have 214,000 people of whom 75% are likely to be still claiming the dole. 105,000 of these are classified as new jobs (the increase in the same category from the year before).

But since the 105,000 number is a random allocation of the total 214,000 to represent the "new jobs", we can also say that one in six of all new jobs over the past 12 months are likely to be people who are still claiming the dole.

All the data mentioned in this story can be found in the downloadable spreadsheet. The tables below show the breakdown for the types of employment people are doing and also the number of people classified on a government scheme, by economic status.

Data summary

All in employment by employment type (UK, seasonally adjusted)

Released in November 2012

Source: ONS

People classified on a government scheme, by economic status, Thousands

Click heading to sort table. Download this data

United Kingdom, not seasonally adjusted, July to September each year. Excludes those with an additional paid job in the reference week

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