Business leaders say a small fall in unemployment figures in the West Midlands does not reflect the jobs shortage faced by the region.
Unemployment has fallen by 8,000 in the region over the last quarter – but there are still 274,000 people out of work in the region, a rate of 10.1 per cent, which is an increase of more than three per cent year-on-year.
Kiran Virk, Policy advisor at Birmingham and Solihull Chamber of Commerce and Industry, said the situation was actually worse than the data showed, as many people have taken on short term work in the run up to Christmas.
It is thought that more than million people are now working part time because they cannot find a full time position, according to the chamber.
Ms Virk said: “In the build up to Christmas many firms take on part time staff to deal with the busy period and the rise in employment is due to an increase in part time jobs.”
She added: “The decision by the Chancellor, in last week’s Pre Budget Report, to further increase all National Insurance contributions by 0.5 per cent is nothing short of a tax on employment. It will only serve to make firms think twice before employing someone.”
In a recent survey by the chamber, 63 per cent of members reported that employment costs are the biggest deterrent to hiring new staff.
Across the UK, youth unemployment has reached a record high yesterday as the jobless total nudged 2.5 million, the worst total since the mid-1990s.
The number of 16 to 24-year-olds out of work was 952,000 in the three months to October, a quarterly rise of 6,000 and the highest figure since records began in 1992.
Total unemployment increased by 21,000 to 2.49 million, the highest level since early 1995, although the quarterly rise was the smallest for 18 months.
But there was some good pre-Christmas news for the Government in today’s figures, which showed the first fall in the number of people claiming jobseeker’s allowance across the UK since February last year.
TUC general secretary Brendan Barber said: “After falling for two successive months, today’s rise in youth unemployment is disappointing. The UK is nowhere near the levels reached in the 1980s, when over two million young people were still out of work after the recession ended, but the Government must continue to invest to prevent a second wave of rising unemployment amongst 16 to 24-year-olds.
“Government investment to help people off the dole and stimulate the economy has ensured that joblessness has not spiralled out of control in the way it did in earlier recessions. But this is no time for complacency, especially while many - particularly the young - still remain out of work.”
Dr John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development, said: “While it would be wrong to conclude that unemployment won’t continue to rise for much of 2010 the 6,300 fall in the number of people on jobseeker’s allowance (JSA) in November is remarkable.
“The fall reflects another dip in redundancies, limiting the inflow to the JSA count, and further improvement in an already surprisingly strong flow off the count. Even the most optimistic forecasters would not have expected such a turnaround at this stage in the economic cycle which underscores the degree to which the UK’s flexible labour market is performing much better than in previous recessions.”