Unemployment Continues to Rise but Labour Market Trends not as Serious as in Previous Recessions

LONDON - Commenting on the latest Labour Market statistics issued today (15 July), Ian Brinkley, Associate Director of The Work Foundation said:

“The latest figures show steep increases in unemployment and large scale job loss. However, although the overall figures are bad, the labour market is doing better than patterns seen in previous recessions. People are not being shunted off the claimant count into long term sickness related benefits, nor are they dropping out of the active labour market entirely.

“Unemployment jumped by over 280,000 comparing the three months to May 2009 with the previous three months, taking the unemployment rate to 7.6 per cent and the total of unemployed people to just under 2.4 million. The rate of job loss appears to be accelerating once more after an apparent pause. This is likely to be a consequence of the fall in GDP earlier this year; unemployment is a lagging indicator and is likely to continue rising for some time after the economy starts growing again.

“The number able to claim Job Seekers’ Allowance went up by only 7,000 in June. Even if we adjust the figures to make a more like-for-like comparison with the period covered by the International Labour Organisation (ILO) measure, the increase in those claiming benefits is still significantly lower than those saying they are actively seeking work.

“One reason is that people are still moving off the claimant count in large numbers, and there has as yet been no build up of long-term unemployment (often defined as out of work for more than twelve months). In past recessions people typically either moved off unemployment benefits into long term sickness related benefits and/or dropped out of the labour market completely. There is little sign either is happening so far.

“The early stages of the recession were dominated by job losses among the young and full time male workers. We are now seeing significant job losses for older workers and for women - though employment for younger workers is still falling faster than for older workers and male employment is still falling faster than employment for women. This is to be expected as the impact on the labour market deepens and widens.”

Notes to editors

1. Ian Brinkley is available for interviews and briefings.

2. All figures cited are based on the definition of unemployment from the International Labour Organisation (those who looked for work in the past four weeks and are able to start a job in two weeks time).

3. The Work Foundation is the leading independent authority on work and its future. It aims to improve the quality of working life and the effectiveness of organisations by equipping leaders, policymakers and opinion-formers with evidence, advice, new thinking and networks.

Source: The Work Foundation

Media enquiries: Nasreen Memon, +44(0)20-7976-3507 / +44(0)7825-527-036, nmemon at theworkfoundation.com