By John Charles Dyer, UK Correspondent
12 Feb 2013. Statistics readily accessible through the Office of National Statistics (ONS) prove government & BBC claims concerning monthly employment statistics are misleading and/or inaccurate.
ONS released its latest monthly estimates of employment on 29 January. On 30 January Prime Minister David Cameron claimed once again during Prime Minister’s Questions that the economy under his government's policies had generated 1 million new private sector jobs.
Whirled View previously published ONS' written disavowal of the claim, a claim allegedly based on ONS reported net gain in employment over a year’s period of time. I pointed out the ONS standard for counting one person as “one person in employment” is the person worked at least one paid hour per week. I also pointed out the figures are estimates not audited actuals.
The day the first article published I brought it directly to the attention of the Twitter accounts of Prime Minister David Cameron, Deputy Prime Minister Nick Clegg, Labour Leader Ed Miliband, Labour Shadow Chancellor Ed Balls, BBC News and others.
Subsequently, I brought it to the attention of Liberal Democrat Party President Tim Farron, the Vice Chair of the British Competition Commission and others.
Mr. Farron and the Vice Chair discussed the figures with me but I argue even the public figures who did not should be considered “on notice” when I contacted their Twitter account.
BBC (unlike the Prime Minister) adjusted their account. BBC described the ONS “headline” figure as a 556,000 net overall increase in employment. But BBC described it as a 556,000 net growth in employment over the course of last year, as if 556,000 jobs of equal value to the economy had been newly created. BBC also “analyzed” these figures as “good news” "indicative" of a “strengthening” economy. The presenter expressed puzzlement how an economy that flat lined could have produced so many jobs, but affirmed it had.
BBC itself undercut that story 6 Feb with a report on the growing category of “Independent Contractor.” BBC explained that a large number of people, especially men over 50 who have lost their regular jobs but cannot afford to retire, set up their own businesses. For many their “business” is gardening or other light work more designed to take advantage of a marginal benefit to tax credits over benefits. BBC explained this increase in raw numbers is not necessarily evidence of earnings or good news to the economy.
The government claimed the ONS figures indicate that their management of the economy is “on the right track.” BBC reported that claim without an in depth analysis that compared claims to facts.
Available statistics debunk the claims
BBC’s regular reports have been misleading although arguably technically accurate as far as they go. The Prime Minister’s claims were and are both misleading and inaccurate. The facts that could give an appropriately nuanced view have been available all along. There is an abundance of statistics that could put the raw increase in “in employment” into appropriate perspective.
ONS publishes on its web site data which hardly paints a picture of a strengthening economy. Particularly useful is a graphic representation of the relationship between employment and overall population. Even in headline form, the ratio of UK employment to UK population remains stubbornly below pre-recession levels. That is neither cause for celebration as good news or an indicator of a strengthening economy.
In a follow up FOI request I asked ONS for clarification. On 12 February 2013 ONS replied.
Comparing September through November 2012 to September through November 2011, ONS reports 552,492 net more people “in employment.” This ties roughly with the BBC headline figure. But significantly, of the 552,492 in employment, 67,607 were in government supported training and employment programmes, 239,282 were employed part time and 30,013 were “self-employed working part time.” Less than half - a total of 254,097 - worked as full time employees. The largest percentage increase was among part time self employed. The rate of increase in full time employment was only 1.4% on the year.
ONS does show a 1 million increase in private sector employment in the three years since 2010 but at least 196,00 of that is due to the reclassification of public jobs. Over 150,000 is attributable to Labour according to the Vice Chair of the Competition Commission. More importantly, the headline figure disguises what the detailed data shows.
ONS also publishes an Annual Survey of Hours and Earnings. Its "headline" shows an average plus 1% Median increase for 2012 among full time employees. Sometimes Press cite this figure as if the small annual increase in the wages of Full Time Employees applies across the board. But the figure for Part Time Employees, found in the detail tables, is a .3% increase in Median wages. Median Earnings were £155 a week for Part Time employees. That is less than one pound in a year. Median Earnings for Full Time employees were £548 per week for women, £556 for men. Moreover the highest earning salaried employee category dropped.
Nor is the increase in Independent Contractors documented by BBC.
Take two examples, John X and Judith Y, both known to me. John X was an Engineer who designed retrofits to Royal Naval vessels. Made redundant during the Thatcher Union busting purges John X at 70 something must work as a gardener to make ends meet. He is an Independent Contractor. Judith Y is a young mum who from time to time sells hand sewn items on EBay. By listing herself as an Independent Contractor she moved from benefits to tax credits, marginally better off as a result. Both John X and Judith Y count the same as a software engineer making thousands each year, a presenter making hundreds of thousands or a football player making millions.
A shift from engineers on good salaries and benefits to gardeners and single mums barely making ends meet is in no sign of a “strengthening” economy.
Why doesn’t BBC publish this information and compare it to the claims?
Perhaps a partial explanation is ONS disclaims some of the documents posted on line with a caveat. The information isn’t “designated as national statistics.” What does that mean? It means officialdom chose not to receive the information in the monthly report.
Dr. David Blanchflower explained this to me in a Twitter exchange. The UK is one of a select few OECD countries who do not publicize this data. The other two countries are Greece and Latvia.
The information is, on the other hand, readily accessible to those who know it is there. Dr. Blanchflower, an economist and (perhaps more relevantly) a former member of the governing board of the Bank of England, knows the information is there. I know it is there. I know others know and have cited it.
So how come the BBC either doesn’t know or chooses to ignore it in analyzing ONS headline figures? Shouldn’t the Coalition and the Prime Minister regularly receive all information so they have a full picture of the economy? Shouldn’t Parliament? Shouldn’t the public? Isn’t that the role of public servants and the fourth estate -- transparent full disclosure in furtherance of public accountability?
Calling on Parliament to act to protect the public
Whatever may be the reasons, it is clear ONS reports simply do not support inferences of a strengthening economy as a result of Coalition policies. One wonders if those who say they see “signs” the economy is strengthening in the kitty litter of British statistics have been chewing too many coca leaves trying to commune with the spirits of dead economists.
Various members of the government, the press and Parliament have been on notice of this for at least 3 weeks. For such unsubstantiated claims to continue unchallenged is a disservice to the British people. I call upon Parliament to open an inquiry into these claims and the standards under which ONS reports employment statistics to the British government and the British people.