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Scotland is working

Like an alternative version of Goldilocks, the Scottish Government would have preferred last week's porridge of employment statistics, one of the last before the September referendum, to be piping hot (denoting widespread, complacent prosperity) or stone cold (general misery).

The happy medium suggested by the Office for National Statistics (ONS) jobs figures - a rapidly improving but still problematic economy - is probably not that happy from the point of view of the Yes campaign. If your main offer is based on injecting new dynamism and exciting risk, it doesn't help if things are already moving fast.

Particularly in the area of self-­employment, rapid shifts do appear to be happening. They are being spun by Westminster as overwhelmingly positive, though there are inevitable differences on how they should be interpreted.

This left-right dilemma is another reason why it is hard for either of the two ideologically confused teams in the referendum debate to weaponise the employment and unemployment numbers for their own constitutional purposes.

At first and even second glance, the figures do appear to be predominately positive, with the labour market undoubtedly improving in tune with the faster-than-expected headline growth figures. As David Kern, chief economist at the ­ British Chambers of Commerce (BCC), said: "The figures continue to demonstrate the flexibility and resilience of the jobs market, which is a source of strength for the economy."

Fraser of Allander's Professor Brian Ashcroft was prepared to give credit, despite rarely endorsing any positive development or trend for which "hubristic" George Osborne might take credit. He did, however, cast his net wide to find reasons not to be too cheerful.

"We are experiencing a recovery that is getting stronger. There is a good chance that it will be sustained.

"Not everything is rosy though. The spectre of deflation haunts the Eurozone and we may not be immune from its effects. Growth in China and perhaps even the US may be faltering. Meanwhile, domestic households in Scotland and the UK remain burdened with historically high levels of debt, which could limit and constrain the growth of consumer demand. Investment is recovering but remains weak and there is very little positive news on the export front."

Across the UK, the number of people out of work fell by 133,000 to a new five-year low of 2.2 million in the three months to March, representing a fall in the jobless rate to 6.8%. For Scotland the picture was marginally better, as the Scottish Government pointed out.

"Employment levels are at their highest since records began in 1992, with 2,585,000 people over 16 now employed in Scotland [in] the period January-March 2014," a spokesman said.

"After rising by 29,000 over the quarter, the employment level has increased for 15 consecutive monthly releases. Over the quarter, the unemployment level fell by 18,000. The unemployment rate fell by 0.7 of a percentage point compared to the previous quarter, and is at 6.4%- below the UK rate of 6.8%.

He added: "Scotland has improved across all headline labour market indicators over the last quarter and has again outperformed the UK with a lower unemployment rate, higher employment rate and lower ­inactivity rate.

"Both the rise in the employment rate and the fall in the unemployment rate of 0.7 of a percentage point in Scotland over the quarter has been stronger than in the UK as a whole. Over the year, while the employment rate in the UK has increased by 1.3 percentage points, in Scotland the employment rate increased by 1.7 percentage points."

The stand-out feature of last week's ONS figures was not the Scottish difference but the figures showing 283,000 more people across the UK found work in the three-month period. This was the largest quarterly increase since records began in 1971 although, as the STUC's sceptical number-cruncher Stephen Boyd pointed out last week, all-time record rises are firmly in the realm of lies, damned lies and statistics.

"Achieving the 'highest employment level ever' really isn't a historically ­significant event. By my reckoning this is a claim that could've been made precisely 40 times since the current data series for Scotland started in 1992."

Nevertheless, across the UK, boosted by a substantial rise in self-employment, the number of people in work rose to 30.43 million. For what it is worth, this the highest since records began in 1971.

Added to this, average earnings in the three months to March were up 1.7% from a year earlier.

Although the growth rate in wages was slower than analysts had expected, it still inched past the 1.6% inflation rate for the first time since 2010, suggesting Labour's hard-working "cost of living crisis" line might soon be retired.

Also attracting much comment was the number of people working for themselves, which reached a record high of 4.55 million, with self-employment jumping by 183,000 in the quarter to March, compared with a rise of 375,000 over the whole of the past year. Six months' worth of growth last year has been achieved in three months this year, a pick-up in pace that can be fairly described as spectacular, or "startling" as the BBC reported it.

That notwithstanding, the fact that self-employment accounted for more than two-thirds of the 283,000 new jobs over the latest quarter was seen as the stand-out figure of last week's statistics.

The majority of these new self-employed jobs counted as full-time positions, but it is still not clear how many of these are working for themselves by necessity after losing a job elsewhere. How much that matters is, of course, more a question of politics and sociology than economics.

David Blanchflower, former Bank of England monetary policy committee member and arguably the most ideologically dogmatic of all UK-based economists, has called self-employment "the last refuge of the desperate".

He said: "Particularly after a prolonged downturn, there is a well-documented pattern of people failing as jobseekers and then moving into self-employment status, often out of desperation rather than anything more positive."

Sceptics can also point to work by the respected centre-left think-tank the ­Resolution Foundation, which found that, while weekly wages for employees have fallen 6% since 2007, typical self-employed pay has fallen by 20% in the same period. This means the typical self-employed person is now being paid 40% less than the ­average employee.

But for every commentator wringing their hands over the plight of sacked company men and women forced to become their own bosses (although the mass sackings that would anecdotally support this are absent), there is another praising the legion of "laptop entrepreneurs".

This glass half full side argues that the rise in self-employment could also point to a more entrepreneurial spirit, with the potential to reap long-term dividends in future. The Resolution Foundation found that 73% of those classified as self-employed had chosen this path, although the minority who indicated they had gone self-employed because of a lack of alternative options is growing.

Finally, another cause for closer study of the self-employment surge is its effect on productivity growth - defined by Paul Krugman and others as the single most important indicator of the future fate of a nation.

As has been argued on these pages previously, a recovery without significant rises in output per worker will always be open to criticism and suspicion.

Economists can and will slice and dice the headline employment and unemployment figures to support their underlying hunches about the direction of the UK and Scottish economy and society.

However, the fact that productivity growth has never recovered its pre-2008 trajectory - for all the laptop-accessed e-commerce, digital networking and other aids to entrepreneurialism introduced since then - is the best reason to treat last week's ONS figures as positive signposts rather than an end in themselves.

In Scotland, the UK and indeed everywhere else, the only safe and sustainable jobs are the jobs that deliver more output with less input than those of our global rivals.

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Careers and Jobs

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