How the UK Economy Is Creating More Jobs Instead of Pay Raises

Last year, we reported that unemployment in the UK has dropped to 45-year lows, giving the UK reason to celebrate with more than 24 million people in a secure full-time job. During the Brexit panic, the UK Government can smile and point to the robust job machine that is the UK economy. In fact, in 2015, the UK made more jobs than every EU country combined.

The job market has been full of opportunities for people all over the UK, with Jobrapido advertising more jobs in Hull, Manchester, London, Edinburgh, Sheffield and other urban areas. However, despite increased opportunities, some are questioning if there are reasons to postpone champagne corks hitting the roof.

Investigating Under the Bonnet

If you dig deeper, there is a different story unfolding. By looking at trends over the last two years, there is little to suggest that the UK is now a hub of entrepreneurial activity and innovation. Still, the unemployment decrease is more likely a result of spending in the public sector.

Private sector wage growth has been improving over recent years. However, a rise of 4% is more likely to be a consequence of loosening pay restraints within the UK’s public sector. It is not significant – ask any NHS nurse or teacher – but it remains enough to reduce the public sector’s heels digging in and increase figures for average wage growth across the UK.


Not to forget that self-employment is up by 125,000 with almost 5 million UK workers now working for themselves in an array of industries. Full-time workers have also increased but compared with job growth; self-employment figures trump it.

Those that did take up full-time jobs were more likely to be older people from 55 to 70 years old due to increases in state pension age. Many of these have taken up senior professional roles and manager-type jobs while young people are more likely to be one of the half a million jobs classed as low-skilled or the 400,000 new jobs that are classed as semi-skilled.

The bottom line is that young people may be active in a landscape with plenty of jobs, but most of those jobs are not high-paying roles. In fact, research has suggested that despite more jobs available, the average person is £128 poorer each year compared to 2008. This figure has also been identified in line with VAT rises.

Looking to the Future

With this in mind, what is next for the UK job market? The answer to this question is not easy to answer or predict due to Brexit negotiations and their repercussions remaining mostly unknown. Projects such as HS2 may provide further opportunities for higher-paying jobs in the UK, but the long-term future is anybody’s guess right now.