Women win in labour market

BY PAUL WALLACE

Economics Editor

Men are losing out to women in the labour market as the Government's double whammy of higher taxes and interest rates brakes the economy. The latest employment figures reveal a growing gender gap in the workplace, with women grabbing over 70 per cent of new jobs.

The figures come from the Labour Force Survey, which the Royal Statistical Society suggested last week should become the basis for a new measure of monthly unemployment.The statistics, at present collected quarterly, showed that employment rose by 90,000 between the autumn (September to November) and the winter (December to February). But 64,000 of these jobs went to women, only 26,000 to men.

Furthermore, almost all the new jobs for men were part-time while most new jobs for women were full-time. Traditionally, part-time work has been dominated by women, who still account for five-sixths of the total.

The failure to create new jobs for men meant that the sharp decline in male unemployment was almost exactly matched by a rise in the number of men of working age who were economically inactive - neither working nor seeking employment.Many economists believe that this measure includes a large number of discouraged workers who have involuntarily dropped out of the labour market - for example, by taking early retirement in their fifties.

The emerging gender gap in the workplace was graphically displayed by another set of statistics for employment, based on returns from employers. This showed that women are poised to close the gap with men in the workforce, with only 245,000 more men employed than women at the end of last year. At the start of the 1990s, there were over a million more men than women in employment.

Meanwhile, the usual measure of unemployment, the claimant total, fell by 20,000 in March to reach 8.4 per cent of the workforce. But the drop in the jobless total was the smallest since last July, confirming the marked slowdown this year in the pace of decline. Unemployment has been falling in the first quarter of this year at half the rate seen in the last quarter of 1994.

The new labour market figures painted the unfamiliar spectacle of a manufacturing sector outperforming the rest of the economy. Underlying manufacturing earnings rose 5.25 per cent in February compared with a year before, while earnings in services rose by only 2.5 per cent. While these continued to be affected by the "echo" of the large City bonuses a year ago, they were also a consequence of particularly weak retail sector earnings growth.

Manufacturing jobs grew again in February and have now risen by 50,000 since July of last year, when they first started to pick up. This increase in employment combined with the slowdown in manufacturing productivity meant that unit wage costs in manufacturing rose by 1.6 per cent in the three months up to February on the year before - the highest increase for nearly a year.

But with average underlying earnings growth for the whole economy unchanged at 3.5 per cent, the City interpreted the latest figures as further evidence that the economy was slowing down in response to the continuing fiscal squeeze and the tightening of monetary policy that started last September. But Ciaran Barr, UK economist at Morgan Grenfell, warned that despite the easing of labour market pressures, sterling's weakness would still probably necessitate a further increase in interest rates next month.