Responding to the Labour market overview February 2023 released by the Office for National Statistics, Ben Harrison, Director of the Work Foundation, said:

“Today’s figures suggest the cost of living crisis is pushing young people back into work from economic inactivity at time when everyone is feeling poorer – with employment rising by 53,000 people (0.2 percentage points). This should not mask the fact that real pay is down 2.5% on the year for workers, with those in the public sector hit hardest despite moderate pay growth that continues to fall short of double-digit inflation.

“Employers, workers and job seekers are feeling the squeeze. With the IMF singling the UK economy to be the only major economy to shrink in 2023, persistent worker shortages are likely to become a vital political topic in the months to come.

“The Government has hinted it will double down on its approach of increasing welfare sanctions, notionally intended to get those out of work into any job and those in part-time work to up their hours. The reality is this will not help grow the UK economy nor support people into sustained employment. But it will acutely increase the stress and anxiety of low-income workers and their families.

“Instead, we need long-term investment and reform to make employment services more inclusive and effective, and an Employment White Paper to strengthen worker rights and protections to be fit for the 21st century.”