UNEMPLOYMENT

WHAT IS
UNEMPLOYMENT?
Unemployment is an economic indicator that refers to
the number or proportion of people in an economy who
are willing and able to work, but are unable to get a
job. A person in this situation is said to be unemployed.
People who are not willing or able to work, for
whatever reason, are "economically inactive" and do
not count towards unemployment figures.

Presented by John Fairest as a brief view of Unemployment 1

 Unemployment also carries
significant social costs
 People who are unable to find work must
frequently rely on benefits for income
social costs.
 People who are unable to find work must
frequently rely on benefits for income: if
they have financial or family
commitments, this can make life
extremely difficult. Moreover, the sense of
failure, boredom and rejection that being
unemployed can generate has real social
consequences. Studies have repeatedly
linked unemployment to rising crime and
suicide rates and the deterioration of
Presented by John Fairest as a brief view of Unemployment 2
 Background

 The history of unemployment in the UK is

central to both the economic and social
history of the country.

Presented by John Fairest as a brief view of Unemployment 3

History of Unemployment
 The 1950s and 1960s saw a very low rate
of unemployment (around 3 per cent
on average) as a result of the "postwar
boom".
 The economic orthodoxies of the boom
years collapsed in the 1970s. The
energy crises of 1973 and 1979
generated "stagflation", rising inflation
and rising unemployment

Presented by John Fairest as a brief view of Unemployment 4

 History of Unemployment
70’s & 80’2
 Unemployment topped one million for the
first time in January 1972. During the 1979
"Winter of Discontent", when even
gravediggers went on strike to protest
against pay freezes, unemployment stood
at 1.1 million, and the Conservatives
swept to power on the message that
"Labour isn't working".
 However, during the early 1980s,
unemployment rose further still - it topped
three million in 1982. The January 1982
figure of 3,070,621 represented 12.5 per
cent of the working population, and in
some parts of the country it was even
higher: Presented by John Fairest as a brief view of Unemployment 5
 History of Unemployment
 Unemployment did fall through
most of the 1990s and fell
below one million for the
first time since 1975 in
March 2001. The causes of
this achievement are
disputed. The Conservatives
argued that the Labour
government had been left a
"golden economic legacy"
by the outgoing Major
administration, and that it
had ridden an eight-year
global boom, following Tory
economic plans. Labour, by
contrast, put the figures
down to its successful
economic management and
reforms (particularly the
independence given to the
Bank of England), the
extensive attention it paid to
education and skills, and the
impact of its New Deal So u rc e -De p t o f Wo rk &
programme for reducing Tra n s p o rt
joblessness.
Presented by John Fairest as a brief view of Unemployment 6
 Low Employment
 Long period of economic growth

 Disguised unemployment, many unemployed were

allowed to take sickness and disability benefits.
Therefore, they are not counted as unemployed. See
also: What is True Level of Unemployment?

 The Labour Force survey has consistently been higher

than the government record of people on Job seekers
allowance. This reflects the fact it is very difficult to get
benefits these days. Some unemployed are not eligible
for benefits for a variety of reasons.
 Regional Recovery. Former depressed areas like South
Wales and the North East have been relatively
successful in finding new industries to replace the old
heavy manufacturing.
 New Deal & WBL . Better education and training for the
unemployed to get back to work.
 Presented by John Fairest as a brief view of Unemployment 7
Why Unemployment is set to
Rise in UK
 Contraction of Credit. Credit crunch has
made banks reluctant to lend loans,
mortgages and credit. The impact is a
reduction in consumer spending, lower
investment and lower economic growth.
Big investment projects are being delayed
until lending becomes easier.
 Global Downturn. The global economy is
slowing down, leading to lower exports
and international trade.
 Sectors. Certain sectors have been
particularly badly hit by the financial
crisis, estate agents, banks, construction
industry. There will be increasingly a knock
on effect to the rest of the economy.
 Presented by John Fairest as a brief view of Unemployment 8
The True Level of Unemployment in
UK
October 30th, 2007
 According to government statistics
unemployment in the UK, is under 1
million.
 The claimant count for Jobseeker’s
Allowance was 835,800 in September
2007
 This represents less than 3% of the
workforce. This is pretty close to full
employment; most economist argue
that in a modern economy there will
always be some frictional
unemployment of perhaps 2-3%. This
figure of 3% is calculated using the
number of people eligible for Job
Seekers Allowance JSA.
 However, despite the attractive figures,
there are many reasons to suggest
that this is an under estimate of
unemployment
 The JSA excludes many groups of people
from claiming unemployment benefit,
even though they are actively seeking
work. Examples include:
 A husband or wife who’s partner is working
and earning above a certain amount.
i.e. JSA is means tested depending on
a partner’s income. After 6 months it
is also means tested depending on
savings
 People under 18 are not eligible – in theory
they should be on training schemes
 Presented by John Fairest as a brief view of Unemployment
People over 55 are often excluded
 Economic Inactivity.
 The definition of unemployment becomes
blurred in some areas. For example, in
recent years there has been a marked
increase in the number of people
receiving sickness or disability
benefits. These people used to be
employed, but, for various reasons
are no longer able to work. Rather
than be classed as unemployed they
have effectively left the labour force.
In one sense they are not unemployed
because they are not seeking work.
However, on the other hand this
economic inactivity is a type of
unemployment. Under different
circumstances they could be working.
Often sickness benefits disguise the
extent of unemployment in certain
areas. For example, many former
miners were given sickness benefits,
rather than be classed as unemployed
when the mines closed down.
 This types of unemployment is often known
as hidden unemployment

9
 Graphic Employment
Economics 2008
 Yesterday, Britain
experienced the
quickest rise in around time of
unemployment since Banking crisis
the last recession, 17
years ago. Statistics
from the International
Labour Organisation
showed a rise in
unemployment to 1.69
million (an increase of
164,000 in the 3
months to August).
The Government's
claimant count is
978,000. Over the
coming months,
unemployment is
liable to rise to well
over 2 million and
could reach 3 million
the rate of Presented by John Fairest as a brief view of Unemployment 10
 Reasons for Youth
Unemployment

May 19th, 2008
In the UK, people aged 16-18 are not 

eligible for unemployment benefits;

instead they either have to be in full
time education or on a government
training scheme.  BBC Youth figures May 2010
 The reasons for youth unemployment are
fairly similar to other causes of  Youth unemployment has risen, with
unemployment. They include: 941,000 16 to 24-year-olds out of work
in the January to March period - a rise
 Lack of Qualifications. Young people
without any skills are much more of 12,000 on the previous three
likely to be unemployed. (structural months.
unemployment) However, the service
sector has increased in importance
and this creates unskilled jobs such as
bar work, supermarket checkout and 
waiters.
 Geographical Unemployment. Youth
unemployment is often focused in  The latest figures also showed that the
certain areas – usually inner cities employment rate dropped to 72 per
where there is a cycle of low cent, the lowest in 14 years. The
achievement and low expectations. number of people employed fell by
 Black Economy? Official Unemployment 103,000 while the number of part-time
may occur in areas where there is a workers rose by 27,000.
thriving black economy. i.e. there are
unofficial jobs for people to take. The number of people classed as

These jobs may be illegal such as economically inactive rose 88,000 in

dealing in soft drugs. However, it is the last quarter to a record total of
hard to ascertain the extent of these
unofficial jobs and it is easy to make 8.17 million. This total includes
sweeping generalisations about students, people looking after a sick
deprived areas. relative or those who have given up
looking
Presented by John Fairest as for work.
a brief view of Unemployment 11
 Youth unemployment
21 April 2010
 Unemployment in the UK rose by 43,000 to
2.5 million during the first quarter of
2010, according to new figures from
the Office for National Statistics.
 This brings the rate of unemployment to a
staggering 8 per cent - its highest in
almost a decade and a half. Youth
unemployment makes up a significant
portion of this figure, with 929,000
people between the ages of 16 and
24 now out of work.
 Older workers are also finding it hard to
secure employment. There are not
396,000 over-50s out of work, many
of whom were casualties of the very
first round of redundancies seen
during the downturn.
 But many analysts are positive about the
figures, saying that they had
predicted the picture would be much
bleaker. Although unemployment has
risen, it has risen less sharply than
many had expected.
 Amongst those in work, the picture is even
better. Average weekly wages rose by
2.3 per cent during the first quarter
when compared with the same period
in the previous year.
 Yorkshire and the East Midlands saw the
biggest increase in unemployment,
while London saw a significant drop.

 Presented by John Fairest as a brief view of Unemployment 12

 The Geography of
Unemployment
Unemployment across UK cities and
 
regions
Looking at the local authority
level, if we simply take absolute
increases in the
number of claimants from January
2008 to January 2009 across the
UK, then the
labour market downturn is a story
of the core cities. The largest
increases in the total
number of people claiming
unemployment benefit have been
in the North’s largest
cities – Manchester, Liverpool,
Sheffield, Leeds, Hull, Glasgow
and Birmingham.
Birmingham has seen a rise of
over 9000 claimants amongst the
city’s resident
population from January 2008.
Presented by John Fairest as a brief view of Unemployment
The percentage change in claimant counts
presents a different geography. Whilst
the
absolute figure captures the total
increase in numbers of people
claiming
unemployment benefits, the relative
figure is a percentage that varies
according to
the levels of unemployment that
existed before the recession. That
means that those
places with low levels of
unemployment before the recession
only need to have a
small number of people moving onto
unemployment benefits to show a
large
percentage increase. Concurrent with
the recession of the 1990-1992, to
date the
highest percentage increases in
claimant counts have been
concentrated in the
South East and East Midlands. The
absolute increase in the number of
claimant
counts more generally across these
regions has, however, been small.
East Dorset,
for example, has seen an increase of
over 140% in the number of
claimants, whilst
the increase in the number of people
claiming benefits has been just over
400.
13
 UK unemployment
regionally
Figures produce for the

Graph from the UK
UK
 CHANGES IN UNEMPLOYMENT
TOTALS ACROSS THE UK
 Yorks/Humber: Up 13,000 to
253,000
 East Midlands: Up 13,000 to
180,000
 North West: Up 11,000 to 290,000
 East: Up 11,000 to 198,000
 South East: Up 11,000 to 284,000
 Wales: Up 10,000 to 131,000
 Scotland: Up 6,000 to 208,000
 South West: No change - 170,000
 Northern Ireland: Down 1,000 to
53,000
 North East: Down 3,000 to
120,000
 West Midlands: Down 6,000 to
253,000
 London: Down 22,000 to 363,000
Presented by John Fairest as a brief view of Unemployment 14
 The Public Sector
By Brian Groom, Business and
Employment Editor
Published: April 19 2010

 The public sector is likely to

shed 500,000 jobs during
the next five years as the
next government gets to
grips with
public spending to curb
the £167bn ($255bn)
budget deficit, the
Chartered Institute for
Personnel and
Development warns on
Monday .
 John Philpott, the CIPD’s
chief economic adviser,
said a 10 per cent
reduction in the 5.8m
core public sector
workforce was probable,
“dwarfing anything
implicit in thePresented
election by John Fairest as a brief view of Unemployment 15
manifestos”.
 Benefit Changes
 Britain's new government on Thursday promised a "r

Presented by John Fairest as a brief view of Unemployment 16

 In Conclusion
It’s time to act
 It is clear that new resources need to be
made available
 If you want to see a change and support
to be available then make contact
 This is only a Brief view on
Unemployment History. Material
provided from BBC,ONS,DWP &National
Papers

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