James Moore: Good news on jobs, but the trouble is we're turning into a low-wage economy

Outlook So is the jobs glass half full or half empty? Both interpretations on yesterday's unemployment data were on display during a rowdy Prime Minister's questions. In reality, the Government probably has more to be happy about, although it's very marginal.

There are more people in work, and fewer people out of work and seeking it, and the claimant count has dropped. Happily, that means the social security bill decreases and the tax take increases, with the virtuous circle completed by the fact that the new jobs are coming from the private sector rather than the public sector.

The early indications were that the numbers would be better. Therefore, they come as something of a disappointment. That said, after a couple of bad months, the fact unemployment is again falling is a very welcome sign to a Coalition that is in need of evidence to help it back up the claim that its stewardship of the economy is sound as it approaches an election its own backbenchers are doing their best to help it lose.

The problem it faces is that those who are in work aren't enjoying much in the way of reward, at least outside the confines of London's financial centre. Wages rose at below the rate of inflation, even allowing for the fact that some of the firms operating in the City and Canary Wharf put off paying bonuses for a month to allow their staff to benefit from the "millionaires tax cut".

The trend of steadily reducing living standards identified by the TUC and the Institute for Fiscal Studies continues. That will feed through into people's spending habits, which will affect the performance of the economy.

It will also feed into a deep well of resentment as yet more of Britain's big public companies lavish their chief executives with rock star-sized rewards fuelled by the money that ordinary people invest with the aim of funding their retirement. Rewards that the Coalition appears to view with equanimity.

Britain is gradually becoming a low-wage economy for the majority of its citizens. Still, if it carries on like this, who knows? All those calls-centre jobs that were shipped to booming India and factory jobs that have migrated to booming China may some day start trickling back. Well, at least it will keep the claimant count down. Ain't globalisation grand?