2: The Labour Market
earnings can be indicative of a region’s
competitiveness if they are supported by high
productivity, if not they can have an adverse
effect on long - term competitiveness.
2000, hourly earnings were highest in London
at £13.60 for full time employees, with
earnings in the South East next highest at £10.90
per hour, compared to an average of £10.30
for the UK as a whole. The lowest hourly
earnings were recorded in the North East, the
East Midlands, Wales and Northern Ireland (all
£9.20 per hour).
comparisons of the value of hourly earnings
both between regions and over time should be
interpreted with caution. These estimates do
not take account of regional variations in the
cost of living over these years and because of
this, do not represent the true ‘buying
power’ of these earnings. No Retail Price
Indices are produced for individual regions.
6(a), 6(b) and 6(c) show gross average hourly
earnings for full-time employees by
manufacturing and service industries by sex..
Spring (March-May) 2001 nearly three quarters
of working age people in the UK were in
employment. The number of persons in
employment was at the highest level ever
measured by the Labour Force Survey. By
region, the greatest proportion of the working
age population employed was in the South East
at more than 80%. The lowest proportion in
employment was in Northern Ireland (67.8%).
7(a) details the number of people of working
age in employment by region of residence and
Chart 7(b) illustrates this as a proportion of
working age people.
7(c) shows the proportions of total UK
employee jobs for each region. The chart
illustrates how London contributes a greater
proportion of employee jobs to the overall
total (15.7% in March 2001) than is accounted
for by the proportion of the workforce who are
resident in London (12.3%).
is a key measure of labour market performance.
The unemployment rate is sometimes used as a
measure of the ‘tightness’ of the regional
labour market, although within a region there
can be significant differences at local labour
market level. The proportion of long-term
unemployed is a measure of long term exclusion
from participation in the labour market.
are two main measures of unemployment used in
the UK. The first is derived from the Labour
Force Survey (LFS) which uses the
International Labour Organisation (ILO)
definition of unemployment. The second measure
is the claimant count which is taken from the
monthly records of people claiming
unemployment-related benefits. The claimant
count and LFS unemployment rates are included
in Charts 8(a) and 8(b).
LFS and claimant count unemployment rates are
complementary: the former gives the proportion
of ILO unemployed out of the total number of
economically active residents; the latter is
an indicator of unemployment in an area
relative to the size of its workforce
(workforce jobs plus claimants).
there is a large degree of overlap between
these definitions and rates of unemployment,
the ILO and Claimant Count levels and rates do
differ in some regions. Claimants may appear
in one set of unemployment figures and not the
other if, for example, a person is not
eligible for Job Seeker's Allowance and has
not registered as unemployed. On the other
hand some of the registered unemployed would
not be included in the ILO measure if they had
done some paid work in the reference week.
between the two measures of unemployment can
occur where a region has significantly more
commuting in to or out of the region for work.
For example, in London where there is a high
level of in-commuting, the claimant count is
lower, partly because the workforce is
significantly larger than the economically
active resident population.
the spring quarter of 2001, the North East
(7.4%) had the highest ILO unemployment rate
of the regions and countries, while the lowest
rate (3.1%) was in the South East. The pattern
for the claimant count unemployment was
similar in July 2001, with the North East
again having the highest rate (5.3%) and the
South East the lowest (1.5%). Although
unemployment on both measures has been falling
steadily over the time series shown in the
Tables (since 1996) the relative position of
the regions and Countries has remained fairly
8(b)(ii) shows the proportion of all claimant
count unemployed in receipt of benefits for a
year or more. For the UK as a whole, this
proportion has fallen from over 35% during
January 1996 to 20% in July 2001. For regions
and countries, the highest proportions of long
term claimants in July 2001 were in Northern
Ireland (just over 30% of the claimant
unemployed) followed by London (at just under
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