Economists have long argued about how exactly to define when an economy has reached "full employment". Whatever the definition, the economy here is now close to that goal. The latest jobs figures from the Central Statistics Office show that such is the growth of employment that there are now two jobs available for every one person coming on to the jobs market. Even the stubborn problem of long-term unemployment is easing, with the total number in this category now just under 52,000, compared to 138,000 a decade ago.
The latest employment figures, drawn from the quarterly survey of households now under way for more than a year, paint an extraordinary picture.
The total numbers at work last year rose by 72,000 in the 12 months to last October, indicating that the exceptional increase shown by the figures earlier in the year continued. The services sector was again the main source of jobs growth. And, notably, while it appeared a few years ago that much of the rise in employment was due to part-time jobs, the latest figures show that almost all of the rise last year was due to more full-time employment. Nor was the 1998 performance a once-off, with employment having risen typically by 50,000 to 60,000 per annum over the past few years. To put it in context, the number of people employed here has risen by more than 350,000 over the past five years.
The flip side of the coin - the unemployment situation - is equally striking. The latest figures estimate that just 106,000 people are unemployed, bringing the unemployment rate to just 6.4 per cent of the labour force. The figures showed a 65,000 drop in unemployment between October 1997 and October 1998 (the survey is taken between September and November). While about a third of this decline was due to statistical changes in the way female part-time workers are counted, the fall is still significant.
The labour force figures, of course, always raise the old question of what is the "real" measure of unemployment - the survey data published yesterday or the live register figure. Statisticians in the Central Statistics Office favour the survey method. The live register is a legitimate method in that it measures the numbers signing on for benefit each week, but the surveys are based on international norms and on how companies judge their own status. The live register unemployment figure is higher than the survey figure for a range of reasons. In general, many people are qualified to sign on for unemployment payments benefits, but when asked in a survey would not classify themselves as unemployed. The survey figures thus give a better picture of unemployment, in the sense that it shows the number of people who are seeking employment. For those with the appropriate skills, there is now more than enough work, meaning that the issue in tackling unemployment now involves helping those out of work to attain the relevant skills. The increase in the population of working age fills one in every two jobs on offer, meaning that the rest can be filled by the unemployed, people returning from overseas, or older people - typically married women - returning to the workforce. But now there are fewer unemployed looking for work and signs of serious shortage of labour are appearing.
The CSO calculates indicators of the supply of labour available in the economy. To do this it looks at all the groups from which potential workers might come - the unemployed, those who are not actively seeking employment but might do so and those employed part-time who would like full-time work. Five years ago the figures showed that these groups represented almost 23 per cent of the labour force; now the figure is down to just 10.6 per cent.
An indication of the tightness starting to appear in the jobs market is that in October 1997, the CSO estimated that there were 25,400 part-time workers looking for full-time work. By the end of last year the figure had fallen to 7,500. This statistical evidence is reflected in the practical experience of many businesses. Employees are increasingly difficult to attract, while companies are resorting to all kinds of ways and means to hold on to the people they have. Forecasters believe that this will be a key factor now starting to slow the economy from the record growth rates seen in recent years, particularly if this labour shortage is reflected in higher wages.
