2015-08-18 10:32:29
Aug 12th 2015, 22:24 by C.R. | LONDON
SINCE the recovery gained speed, opposition politicians in Britain have taken pleasure in accusing the government of overseeing an economy based on long hours and low pay. Between 2008 and 2014, the number of Britons in work rose by 2m. But average weekly earnings fell by 8% in real terms, in spite of a rise in working hours. Economists have labelled this the productivity puzzle , referring to the fact that, in spite of an otherwise strong recovery, output per worker per hour has fallen.
But there are now signs that these job-market trends are going into reverse. At first glance this may not appear to be unalloyed good news. After several years of rapidly falling joblessness, figures published by the Office for National Statistics on August 12th showed that unemployment grew by 25,000 in the three months to the end of June, to 1.85m. Worse, the number of people in work fell by 63,000 over the same period. That decline, which started in January, has lasted longer than any since the recovery began.
Yet there was better news on the wages front. After years of stagnant earnings, Britons are now getting a pay rise. Wages rose by 2.4% year-on-year in the second quarter. That appears to be fuelled by productivity rising overall, says Michael Saunders at Citi, a bank.
In other areas, too, the jobs market is returning to its pre-recession norm. Productivity has been creeping up partly because there has been a slowdown in hiring in low-paid industries (such as social care and hospitality) while sectors that pay well (such as finance and business services) have gone on a spree. And although part-time and self-employed jobs have helped to fuel the rise in employment since the recession, they no longer do. Over the past year the number of full-timers has risen faster than employment overall, while the number of part-timers and freelancers has fallen. Churn , a measure of how many workers are changing employer (and a sign of confidence in the jobs market) is also returning to pre-crisis levels.
Economists are mainly upbeat about these trends, which suggest that the period of low productivity and low wages may be coming to an end. They see the period of falling productivity and real wages after the recession as an aberration. Immigration from crisis-struck Europe and welfare cuts have increased Britain s labour supply, keeping wages down and encouraging employers to hire more workers and invest less in machinery and other forms of capital. But with unemployment now nearing its post-2000 average again, labour shortages are pushing up wages, cooling hiring.
Although the government boasts that this is all part of its long-term economic plan , forces beyond its control have helped considerably. Nominal wage-growth is still stuck at around 2% a year, lower than its long-term average of 4.5%. Surging real wages have instead been as much the result of low inflation which is due to the collapse in global commodity prices as of more generous pay. Yet these benign conditions will not last for ever. And with real earnings still 5.7% below their peak in 2008, the recovery still has much further to go.