UK Unemployment rate.
UK unemployment rate could ‘trigger social unrest’
Britain’s high long-term unemployment rate could trigger widespread social unrest as people become increasingly detached from the labour market, a grim analysis has warned.
A report by the ILO, published today, said the large long-term unemployment rate in the UK could result in “huge economic and social costs”. The UK is among five developed countries highlighted by the ILO which face increased social unrest, due to worrying levels of long-term unemployment. The other countries are Denmark, Ireland, Spain and America.
Raymond Torres, author of the report, said: “When people are out of work for more than a year they become demoralized, lose self-esteem and drop out of the labour market. These are individual effects but at some point it leads to anger with everything and with authority. This is very worrying.”
He said that Britain returning to recession meant austerity measures were not working. “There was a belief that austerity would reassure the markets, which would lead to jobs and recovery. But this is not the case and confidence has not recovered.”
UK Unemployment: July 2012
Read behind the headline figure of a fall in UK unemployment fell by 65,000 to 2.58 million in the three months to May, and the news is not so good:
• The number of people claiming Job-seeker Allowance rose by 6,100 to 1.6 million in June
• The number of people out of work for more than two years rose by 18,000 to 441,000, the highest since 1997
• Unemployment in Wales its up by 2,000
• The number of vacancies is at a low within the last three years
Further, of that fall of 65,000, 50,000 of those jobs were created in central London. Now, what’s going on in London over the next month that would require an additional 50,000 people?
Plus we have to add that this year’s crop of graduates from schools, colleges and universities still have to reach the statisticians measurement system, yet.
We also need to add in that all of the economic professionals are getting nervous. The Bank of England announced Quantative Easing Phase3 last week, while the IMF after reining back its forecast for 2012-2014 for UK economic growth by between 0.5% and 1.0% – effectively halving it – urged the Chancellor to do more to avoid an elongated double-dip recession and lost decade.
In summary, looking back over the years, July is always a good month for employment statistics. The summer creates more employment through employees taking holidays and resultant temporary vacancies, while the holidays that they take create seasonal vacancies. Plus, the new graduates have not got into the system, so are not counted.
Summary: vacancy high, job seekers low = employment rising.
The key months for me for measuring unemployment and job creation in the UK economy are always September and October, and February through May. These periods avoid seasonal issues, and further are fully-measured periods of who’s out there seeking work, and who’s creating it.
But this year, the July underlying economic story is not good. In fact it looks more like post-2008 recession, as opposed to a proposed recovery “next year”. With the Euro crisis still on-going, and companies storing cash and reducing employment, I await the end of summer to see if we get a better forecast.
Good Luck!
Unemployment jumps 220,000 to 2.4m
Jobless rate climbs to 7.8% of the workforce
• Business
• Unemployment and employment statistics
Unemployment jumps 220,000 to 2.4m
Jobless rate climbs to 7.8% of the workforce
Unemployment in Britain jumped by 220,000 in the three months to June to 2.435 million, official data showed today, the highest level since 1995.
The Office for National Statistics said that the jobless rate was now 7.8% of the workforce.
The figures also showed a huge 271,000 drop in the number of people in work – the biggest fall since records began in 1971 – although there was a similar fall in the February to April period this year.
There was a rise of more than 50,000 in the number of the under-25s without work to a total of 928,000, fueling fears of a “lost generation” of jobless. The Prince’s Trust said that around half of these were able to claim unemployment benefit, which was now costing the government £3.4m a day.
“But this is just the start of a long and downward spiral, which all too often leads to crime, homelessness or worse. Only by stopping young people falling out of the system can we rescue this lost potential and save the economy billions each year,” said Martina Milburn, the charity’s chief executive.
The Liberal Democrat work and pensions spokesman, Steve Webb, added: “Young people should be getting intensive support as soon as they sign on instead of having to wait a year for a guarantee of a job or training place. With vacancies at a record low, it is vital that we prevent today’s school and university leavers from becoming a lost generation of long-term unemployed.”
The ONS also reported a relatively small rise of 25,000 in the number of people claiming job-seeker’s allowance. Under that measure there are now 1.58 million people claiming benefit, equivalent to 4.9% of the workforce, which is the highest rate since October 1997.
There is now widespread suspicion among experts that the claimant count figures are not representing the true state of joblessness since many unemployed people are unable to claim benefit. Yesterday the Department for Work and Pensions announced an inquiry into the recent divergence between the two measures of unemployment.
‘Unacceptable’ and ‘ghastly’
Ahead of the figures, the business secretary, Lord Mandelson, admitted this morning that unemployment levels were “unacceptable”, although he insisted that even more people would be out of work if the Tories had been in power during the recession.
Speaking on BBC Radio 4′s Today programme, Mandelson said: “One thing I and the government know is that any such level of unemployment is unacceptable.
“The question is, what is the government doing about it, and what would be the level of unemployment if the government had not intervened in the economy in the way in which we have?”
He said the government was spending £5bn on getting people back to work while the Conservatives wanted to cut state investment in the economy by a similar amount.
TUC general secretary Brendan Barber said: “Today’s figures show we are still some way off recovery. With over one in six young people out of work, unemployment is already at crisis level. The government must do more to get people back into work, otherwise we risk losing another generation of young people to mass unemployment.”
Describing the figures as “ghastly,” Howard Archer, chief UK and European economist at IHS Global Insight said he suspected the International Labour Organization (ILO) measure of unemployment “is painting a truer picture of the current state of the labour market” than the much narrower claimant count measure.
“In particular, over the summer months, there are likely to be a lot of students who have just left college or school and cannot get a job, thereby going straight into unemployment,” Archer said. “These do not show up on the claimant count data as they are not eligible for benefits. Indeed, youth unemployment is already a major source of concern.”
The ILO data shows that the employment rate of 16 and 17-year-olds dropped to 28.6% in April-June from 34% a year earlier, while the rate for people aged 18 to 24 dropped to 59.8% from 64.1%.
We have also attached the link to the latest series of Dispatches on Channel 4, this shall bring on insight to the matter of discussion here.
“Outside Source“
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