Young jobless rise as pay plummets

The Office for National Statistics said the number of people claiming jobseeker's allowance has fallen to a near two-year low after a huge increase in employment.

But youth unemployment increased by 11,000, the highest rise for a year, and the number of people with more than one job increased by 41,000 to 1.1 million. The number of self-employed workers increased by 25,000 to 4.2 million.

TUC general secretary Frances O'Grady stressed the youth problem. She said the Chancellor could: "start by introducing a guarantee of paid work for any young person out of work for six months or longer."

And GMB general secretary Paul Kenny criticised the government's use of headline figures, arguing that "to this must be added the millions in enforced temporary and part-time jobs and those massively underemployed."

The Star has also pointed out recently that the employment figure includes those on work schemes - and benefits sanctions are being widely imposed.

Alongside the mixed jobs picture there was also a cut in the real value of pay with average earnings increasing by 1.4 per cent in the year to December, down by 0.1 per cent on the previous month, with inflation still running at 2.7 per cent.

Shadow work and pensions secretary Liam Byrne said: "People have now taken an average £1,200 pay cut since the election because jobs are so hard to come by."

Overall, unemployment fell by 14,000 between October and December to 2.5 million giving a rate of 7.8 per cent compared with 7.9 per cent in the previous quarter.

Jobs Economist director Dr John Philpott said: "This is unlike anything seen since the second world war, with the economy using more and more people at falling real rates of pay to produce a static level of output."

And Unison general secretary Dave Prentis said: "These figures appear to show some relief after years of stagnation, but it is just an illusion."