South Yorkshire and Merseyside recorded the strongest levels of jobs growth in the decade since the financial crisis, according to a report that also finds low-income households have benefited more than richer ones.
The rise in the national employment rate to 75.7%, the highest level on record, has been driven by comparatively low-employment areas of the UK “catching up” over the past decade, according to the Resolution Foundation.
While it is often assumed that job creation is centred on London, the thinktank’s report found that the biggest regional increase in the employment rate since the 2008 financial crash was in South Yorkshire. Employment rose by 6.5 percentage points to 71.7% in the region, which contains Sheffield, Rotherham, Doncaster and Barnsley.
Dan Jarvis, the Labour mayor of the Sheffield city region, said: “Investment to attract global manufacturers like Boeing and McLaren Automotive to the region is paying off.”
Merseyside – which comprises the city of Liverpool and the surrounding metropolitan boroughs of Knowsley, Wirral, Sefton and St Helens – recorded the second-biggest rise in the past decade of 6.4 percentage points. However, its employment rate still lags the national average at 69.3%, among the lowest in the country.
Steve Rotheram, the Labour mayor of the Liverpool city region, said the jobs recovery had been kickstarted by Liverpool’s European capital of culture year in 2008, adding: “Our challenge as a combined authority is to build on that success, despite government austerity and the uncertainty of Brexit.”
Despite the gains in major urban areas blighted by deindustrialisation under Margaret Thatcher, rural areas and second-tier towns have failed to keep pace, in a reflection of the growing divide between metropolitan Britain and the rest of the country. Yorkshire, excluding its biggest cities, recorded a decline in its employment rate of 0.6 percentage points.
About 2.7m jobs have been created since the financial crisis, outstripping many major European economies where unemployment rates remain high.
However, questions have been raised over the type of work, with the growth in precarious employment on zero-hours contracts and in the gig economy. While the Resolution Foundation found that growing numbers of low-income households and disadvantaged groups had been helped into work, it warned that job insecurity had risen, in particular for younger workers.
Half of all jobs growth since 2008 has come in professional occupations, although the share of 18- to 29-year-olds working in lower-paying roles has expanded over the last decade. Employment on zero-hours contracts and in agency work has also risen 50% faster for 18- to 29-year-olds than the rest of the population.
There are still 780,000 workers in Britain without the guarantee of fixed hours, a further 950,000 agency workers, while one in seven worker are self-employed. All these more precarious working roles are significantly above pre-crisis levels.
Average wages remain around £25 below the peak recorded before the financial crisis, following a “lost decade” of pay growth for British workers.
Contrary to the arguments of some Brexiters, the report suggests that migrants have not displaced British workers. While migrants have accounted for about two-thirds of the rise in employment, the employment rate of people born in the UK has risen by more than 2 percentage points to a record high of 75.8%.
Almost two-thirds of the jobs growth since 2008 has gone to those on the bottom-half of the pay ladder, while workers with low qualifications account for almost half of the growth in employment.
Stephen Clarke, senior economic analyst at the Resolution Foundation, said: “While the jobs surge has not been as dominated by London or low-paid work as some claim, new challenges have developed – particularly for younger workers and with a big rise in insecure work.
“While more people are working, as a country we are still earning less each week for doing so than we were 10 years ago.”
Alok Sharma, the employment minister, said: “All this is very good news but we are not complacent and are taking further action to increase employment rates for under-represented groups by developing innovative support programmes.”