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Women have given the jobs market a helping hand — but now the Brexit handbrake is on

Feminine side: the women’s state pension age been steadily rising, supporting the labour force: PA Wire/PA Images
Feminine side: the women’s state pension age been steadily rising, supporting the labour force: PA Wire/PA Images

Practically every piece of major economic data released these days has become a battleground in the Brexit culture war, and this week’s jobs figures were no exception.

You could hear the social media jeering from Leave supporters when the Office for National Statistics — the referee in this particular scrap — revealed a 47,000 fall in unemployment in the quarter to August and the lowest jobless rate for more than 40 years. Look how well we’re doing #DespiteBrexit, they laughed; Guido Fawkes crowed that he was “still waiting” for the big spike in unemployment promised by the Remainers.

The trouble is that the yah-boo stuff barely even begins to scrutinise the data and tell us what’s really going on. It’s much easier to pick out a selective statistic, post a smug tweet declaring victory and move on rather than actually read the figures you’re shouting about.

For example, the fall in unemployment — technically defined as those actively looking for a job, but not able to find one — was driven by a rise in the number of “economically inactive” people neither in nor seeking work. Reason for cheer? I’m not so sure. And though the Leavers were keen to talk about the extra 289,000 in work over the past year, there was less mention of the 5000 drop in employment in the latest quarter, compared with the March-May period. That could be a signal of far less solid recent momentum in the labour market. Except in times of outright recession, the number of employed workers usually rises.

Besides, one of the main drivers of the jobs market is less to do with leaving the EU and more with structural levers pulled in the early days of the Coalition, when Brexit was just a twinkle in the eye of the fanatics.

The raising of the pension age for women has had a dramatic effect on the jobs market over the past three years, although it rarely merits a mention in the press. To recap, David Cameron’s government accelerated the process of increasing the women’s state pension from April 2016 — when it was 63 — to reach 65 by this November rather than in April 2020. The state pension age for women is rising by three months every four months, and the savings are huge.

Back in 2011, the government estimated a cumulative £30 billion would be saved in unpaid pensions, as well as an extra £8 billion in tax paid, although it spawned a campaign group against the changes, Women Against State Pension Inequality.

Protests aside, the ONS’s breakdown of the jobs market since the referendum period — roughly when the female pension age began to rise more steeply — underlines the impact of these extra women.

Between the Brexit vote and the quarter to August, the number of economically active women jumped three times faster than male counterparts. There were an extra 282,000 “active” women, taking the total to 15.87 million, compared with a much lower 88,000 increase in men to 17.9 million. Among older workers, economically active women aged 50 to 64 increased 6.5%, and, among women 65 and older, “actives” rose 11.4% to 512,000.

Measured by average weekly hours worked, the UK is up 2.3% to 1.04 billion since the vote. But by sex, women’s hours are growing almost four times as fast as men, up 4.1% compared with 1.1%. Participation rates are up for women, and down for men, since mid-2016.

The growing influence of women in the workforce may help to explain why wages — until now at least — haven’t really taken off. Despite the best efforts of campaigners, they’re much more likely than men to be in low-paid areas such as care, admin and secretarial jobs. They earn an average 9% less per hour than men in the same job, according to the ONS. Even more dishearteningly, in professional occupations such as science and engineering their pay is typically 11% below men. The average weekly earnings figures are exactly what they say on the tin: total wages divided by the number of workers. If there are more, lower-paid, female workers, that affects the average, and full-time women workers have entered the workforce at twice the rate of men since the Brexit vote.

There’s also likely to be a substitution effect, as the growth in workers from the EU stalls since June 2016. Helped by more women, the number of UK-born employees has risen moderately — around 1.5% since the vote. But over the same period there are now 5000 fewer EU 27-born staff working over here, after a slowdown in recent quarters. So a supply-side boost to the economy in raising the female retirement age has been negated by new EU workers staying away — even before the inevitable-looking curtailment of freedom of movement.

When the UK already has a major productivity shortfall compared with the rest of our major rivals, you can only marvel at the self-inflicted economic wound we’re gouging for ourselves.