Scotland lagging behind England in post-crash jobs recovery

Scotland is at least 15 months behind England when it comes to restoring job levels. Picture: Contributed

Analysis published today suggests Scotland has languished 9,000 jobs short of its pre-financial crisis employment rate. The disparity between Scotland and England has been identified in a report on the Scottish labour market by the Resolution Foundation, an independent think tank specialising in research into living standards.

The State of Working Scotland finds that Scotland is one of just three parts of the UK yet to restore pre-crash employment rates. Northern Ireland and the south east of England are the other areas.

According to the Foundation, Scotland’s employment rate stood at 74.6 per cent immediately before the recession. Recovery after the crash had been slow and the Scottish rate was still stuck at 74.3 per cent, according to the most recent available statistics.

In contrast, England closed its “jobs gap” in May 2014 when the employment rate south of the Border reached the 73.2 per cent seen before the 2008 financial crisis. Historically, Scotland has had a fractionally higher employment rate than England. But the English employment rate now matches Scotland’s, at 74.3 per cent.

Today’s report coincides with the latest official employment figures from the Office for National Statistics (ONS).

Analysts from the Resolution Foundation will be watching closely to see whether these reveal that the 9,000 jobs gap has been finally closed. Even if this is the case, the foundation expects unemployment in Scotland to remain higher than in England and full-time employment to stay below its pre-crash level. This risks holding back pay in Scotland by limiting workers’ ability to argue for higher wages.

The report also finds that while Scotland has experienced a comparatively disappointing performance on employment since the crash, it has undergone a less severe squeeze on pay. Typical pay in Scotland is 5.7 per cent below its 2009 peak, compared to a drop of 9.1 per cent across England. Analysis released earlier this week by the Foundation showed that typical pay in Scotland is now – at £11.92 an hour – marginally higher than England, which is £11.84.

Conor D’Arcy, policy analyst at the Resolution Foundation, said: “Scotland enjoyed a significantly higher employment rate than England in the years running up to the financial crisis. But its relatively poor track record in recent years means that it has fallen back in line with England. This puts Scotland’s newfound pay advantage over England at risk and it’s vital that its job gap is closed sooner rather than later.”

Last night, Labour’s Jackie Baillie said: “This expert report confirms that the new powers coming to Scotland will offer the opportunity to shape a fairer, stronger economy. The reality is that since the SNP won a majority, six out of ten new jobs created have been in low paid insecure work.”

A Scottish Government spokesman said: “Recent job figures, including December’s Annual Population Survey, have offered further evidence of Scotland’s growing economic strength with rising employment, a fall in unemployment and excellent news for youth employment.”