(a) Uses Workforce Jobs by industry data seasonally adjusted by ONS. Industries are grouped by Standard Industrial Classification (SIC) 2007. Chart 7: Employment growth has been strong among the most highly skilled since the crisis, but low-skilled employment has recently rebounded. Chart 8: The UK Beveridge curve has been returning towards its past position. Sources: Labour Force Survey and Bank calculations. (a) Uses the Standard Occupational Classification (SOC) 2000. Seasonally adjusted by Bank staff. (b) Includes managers, professional and associal professional and technical occupations. (c) Change in total employment less changes in high and low-skilled occupations. (d) Includes elementary occupations, plant machine operatives, sales and customer services. Sources: Labour Force Survey and ONS Vacancy Survey (a) Total vacancies divided by number of people aged 16+ in employment. (b) Number of unemployed aged 16+ as a share of the active population aged 16+. 12  BIS central bankers’ speeches  Chart 9: UK wage growth is substantially weaker than would have been predicted by its past relationship with unemployment. Chart 10: Aggregate participation rate would have been around 1ppt lower had participation rates across age cohorts remained constant at 2007 levels from the start of the crisis. Source: Broadbent (2014). Source: Labour Force Survey and Bank calculations. (a) Economically active as a share of the 16+ population. (b) Counter-factual estimate fixing age- and gender- specific participation rates at their 2007 levels, and using actual population shares.
In the US, the burden has been much more concentrated on those who have lost, and not regained, work. And in contrast to the UK, American companies have increased their profits significantly as a share of national income. The euro area What makes the UK performance even more remarkable is that we have faced the added challenge of rebuilding competitiveness. In the run-up to the crisis, the UK’s economy had become increasingly imbalanced. When the crisis hit, sterling fell by a quarter. Prices of imported goods rose sharply and that fed through to higher inflation. The squeeze on real incomes was pronounced. And yet there were relatively few calls for higher wages to compensate. As a result of that painful adjustment, the UK is more competitive. And if the world economy returns to a surer footing, there is a real prospect that the UK can properly rebalance its economy. 5  4  Outturns for unemployment have remained some way below what would have been expected given the past relationship between changes in unemployment and growth (Okun’s law). Year-on-year increases in unemployment during 2008-9, for example, remained around 1ppt below a simple Okun relationship based on data since the early 1970s. That is in stark contrast to the experience of the US in that period, where unemployment outturns were some way above past Okun’s law relationships. 5  See Carney, M (2014), Speech at the Mansion House, June; and Broadbent, B (2014), “The balance of growth”, Speech at the London School of Economics, January.