Unemployment in the UK is three times higher than official government figures show, according to a report that shows the number of people out of work due to long-term illness.
The Center Cities think tank said an army of people were in “hidden unemployment”, and said more than 3 million working-age adults could be added to the official unemployment figures compiled by government statisticians.
The study found that more than 3 million people are missing from the unemployment rate because they report themselves as economically inactive in government labor force surveys.
This follows a dramatic increase in the rate of economic inactivity since the start of the Covid pandemic, driven by older workers leaving the labor market and a sharp rise in long-term illnesses among working-age adults.
Instead of the official unemployment rate of 3.7 percent, which is the lowest level since the mid-1970s, the report says the figure could reach 12.1 percent, if it includes the three million economically inactive people who would be eligible if they had enough support. can work
This is because the official rate only measures people who are actively looking for work and does not include people who are neither in work nor looking for work due to circumstances beyond their control.
Almost 9 million people in the UK are classed as ‘economically inactive’ in official labor market estimates, including students, adults with caring responsibilities, retired people and those with ill health.
The think tank said about 3 million could be considered “involuntarily” inactive because they stopped looking for work because they felt a lack of good job opportunities or because they had health conditions.
Economists including Andy Haldane, former chief economist at the Bank of England, have warned that the declining health of Britain’s population is preventing a growing number of people from working, while a lack of investment in healthcare and other public services could be to some extent. Responsible
It comes as Work and Pensions Secretary Mel Stride explores options to increase labor force participation amid concerns at the heart of the government about rising rates of inactivity and chronic staff shortages across the country for employers.
Highlighting the stark north-south divide, the Cities Centers report found that nine out of 10 places with the highest hidden unemployment rates were in the north of England and one in Wales. Meanwhile, eight of the 10 urban areas with the lowest rates are located in the south.
In Blackburn and Middlesbrough, the involuntary unemployment figures take the total unemployment rate from less than 6% to more than 20%. This is in stark contrast to cities such as Gloucester and Reading, where the hidden unemployment rate is around 8%.
Efforts to increase the number of good jobs in struggling towns and cities are needed to tackle stagnation, the report said. It said this would require an “upgrading programme” to focus on improving the availability of jobs and skills in locations outside London and the south-east of England.
Andrew Carter, chief executive of Cities Centre, said: “With the UK now likely to enter recession, the government needs to address its lack of uplift to date and move quickly to create more opportunities for people to return. to act on the economy. work force.
“This requires setting up and implementing a program that delivers much-needed investment in skills and public services, while supporting job creation in hard-to-reach places.”
A government spokesman said it was committed to expanding the opportunity across the UK. “We see one of our biggest challenges is how to support people who are economically inactive, which is why we are working on measures to increase labor force participation,” they said.
There are an unprecedented number of job vacancies across the UK and our network of Jobcentres are working daily to help jobseekers with these roles, tailoring support to the needs of the local labor market.