National Minimum Wage

Chapter 1: The Economic Context to the October 2011 Upratings
Figure 1.6: Hours and Employment in Recession and Recovery, UK, 1979-2011
Employment and total hours worked
(pre-recession peak = 100)
101
100
99
98
97
96
95
94
93
92
91
90
89
88
0
6
12
18
24
30
36
42
48
54
60
66
72
78
84
90
96
102
108
114
120
126
132
138
144
150
156
163
Months since pre-recession peak
1980s employment 1990s employment 2008-2009 employment
1980s hours 1990s hours 2008-2009 hours
Source: LPC estimates based on ONS data, total employment (MGRZ), and total weekly hours (YBUS), monthly, seasonally adjusted,
UK, 1979-2011.
Note: Month 0 is the pre-recession peak for each measure (January 1980, July 1990 and May 2008 for employment; and September
1979, December 1989, and March 2008 for hours).
Productivity
1.37 As a result of the labour market’s resilience, labour productivity has been affected. In the two
previous recessions, as shown in Figure 1.7, the productivity performance was better as the
fall in output was less than the fall in employment. Indeed, throughout the 1990s recession,
productivity increased. We noted above that the fall in hours was greater than the fall in
employment in all three recessions. As a result, the fall in productivity as measured per hour
has been more moderate than the fall as measured by job. The fall in productivity on both
measures is much more evident in the recent recession than in the two previous recessions.
But the recovery this time also seems to have been weaker and productivity growth has
fallen back again as output growth has stalled.
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100
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