UK Economy: Workers Face A 'Hard Year Of Slog'

A number of reports are warning of a tough 2013 in the jobs market, with one study predicting it will be a "hard year of slog" for even those in work.

Dr John Philpott, director of The Jobs Economist, believes workers can expect longer hours, a continued squeeze on pay and fewer jobs being created.

His analysis suggests job insecurity will remain high, with workers having to maintain a "grin and bear it" attitude.

The study forecasts that the trend in falling unemployment will come to an end with the jobless total increasing by 120,000 to 2.63 million in 2013 because growth in the workforce will exceed the number of jobs being created.

However, youth unemployment would fall below 900,000, while long-term unemployment will remain broadly the same.

The outlook also forecasts that pay deals would continue to be affected by unemployment, with increases lagging behind inflation, leading to wage cuts for workers in real terms.

He said: "Our jobs outlook for 2013 is relatively optimistic in that we expect only a modest rise in unemployment. However, the fact that this can be considered good news merely underlines the harsh reality of current economic austerity.

"GDP may grow somewhat faster but 2013 will be another year of hard slog, with longer hours for those lucky enough to have jobs and a further squeeze on living standards for workers and the jobless alike."

But a separate study painted a slightly better picture for the longer term.

A report for the Chartered Institute of Personnel and Development (CIPD) said that continued growth in employment was likely in 2013, with the number of people in work potentially reaching a historic milestone of 30 million before the next general election in 2015.

Latest figures showed there were 29.6 million people in employment in the quarter to October, an increase of almost half a million on a year earlier.

However, the study also warned that excess capacity had built up in some firms as employers held on to skilled and talented staff, which could lead to weaker employment growth even if the economy picks up.

Mark Beatson, chief economist at the CIPD, said: "The jobs enigma, of strong growth in private sector employment in the absence of sustained economic growth, has been one of the most mystifying economic features of 2012, and if 2012 proved an enigma, the labour market appears equally difficult to pin down for 2013.

"Although the flexibility of the UK labour market is an important factor, the popular focus on under-employment as a major factor in explaining rising overall employment seems overplayed.

"While there are undoubtedly significant numbers of people working fewer hours than they would like, and this is an issue that merits further investigation and consideration by policy makers and employers alike, the numbers have not increased significantly this year, making it a poor explanation on its own for the 2012 jobs enigma.

"On balance, there are likely to be further increases in employment. Rising employment alongside muted growth indicates that employers have significant reserves of skilled labour capacity on which to call to support growth."