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February 21, 2013



Congratulations, Chris, for having the balls to indicate there may be something rotten in the stats of labour.

So many in your profession, as well as in the media, accept the headline figures issued by the government without challenge. Relying on ILO definitions of employment status for justification may be disingenuous and lazy.

For the man on the Clapham Omnibus, it is puzzling that so many people classed as "inactive" find work with apparent ease and without the intervention of DWP's back-to-work Poundland strategy. This is puzzling given that prolonged periods of inactivity virtually destroy chances of re-entering the workforce.


what discernible difference is there in real wage changes now and in the 1970's etc?

Its a big issue this, as some would say it props up disposable income and hence demand.

Luis Enrique

(can you change the colour of your dots so that post 2007 are obvious - I presume they are the horizontal cluster?)

Did you see recent stuff about how real living costs have diverged from CPI/RPI so for many "real" real wages are much lower?


so perhaps what you worry about has already happened?


I wouldn't be at all surprised if someone got a job but needed 2 weeks to - for example - make childcare arrangements or get a car or wriggle out of informal responsibility for someone else's kids or problem. Both the Jobcentre, private recruitment agencies, and no doubt the A4e Archipelago, have the habit of assuming that anyone who can't literally be there on the next bus is a skiver.

(Also, there is a very large group of people considered economically inactive and ineligible for JSA who frequently do switch back into the workforce, but then there's this little gem: http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2008/06/against-women.html)


Great article on an under-used dataset, labour flows. You're right about the difference between unemployed and inactive being fuzzy. To be unemployed you have to have looked for work in the last 4 weeks, what if you looked in the last 5? inactive.

However, its important to note that a large chunk (about half) of the inactives moving into work were full-time students who were inactive because of their studies. So there are some key difference between this group and those classified as unemployed


So ideally, ONS should be compiling 7-state flow data, the 7 states being

- PAYE employed
- self employed,
- govt work schemes,
- FT students,
- unemployed seeking work (claimants + LFS data)
- unemployed not seeking work (inactive)
- retired

Published flows to and from each of the states might begin to present a complete picture of what is happening in the workforce.

At the moment, because significant groups have been subsumed one into another, the potential for misunderstanding and political spin is too great.



this is exactly what ons do:


You just need to scroll down to the tables or can download the data as xls files.

There is a direct link in the BBC article by the way.


Such a grey area. I wonder how may of the 'inactives' are spouses not entitled to claim benefits so not in the 'system' but wanting to work though only if the right job/conditions was available (worthwhile pay and often flexibility for childcare responsibilities)? My wife's been in this position: when she wasn't working (which was not through choice) how different did she look to a housewife/homekeeper? Was whe unemployed or economically inactive?



Thank you. I will try to digest these numbers.


Why would wages be sticky? That's not a question, the real question ought to be, why would anyone ask, and play around with formulas and theories to try to figure it out?

Suppose you are working half time, at minimum wage. You will gross 20 hours x 50 weeks x 7.25 per hour, or about $7,250 before taxes, $604 per month. This is not an uncommon income at the grass roots, especially because hours are altered all the time and capricious layoffs are common.

So, the answer to why wages aren't falling is the same reason why you can't train your donkeys to live on air.


Career Coach

These numbers tell us that, for practical purposes, the distinction between “unemployed” and “inactive” is blurred. In practice, there’s not much difference between being “inactive” and being unemployed.

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