The Real Level of Unemployment – latest findings presented by Prof Steve Fothergill

New research report funded by Sheffield Hallam University using Research England’s Enhancing Research Culture Fund. ‘ The Real Level of Unemployment 2022: The myth of full employment across Britain’. 

ERSA is delighted to be joined by Professor Steve Fothergill on 10 June at 11am online to present the report to members. Register here and read more about the report below.

Register for ‘The Real Level of Unemployment’ on 10 June, 11am. 

Summary

This report presents an alternative set of unemployment figures for every district and unitary authority in Great Britain. It is the sixth in a series of similar reports dating back to 1997.

The report explains how official measures of unemployment fail to adjust for distortions arising from the operation of the benefits system and how the very large numbers of incapacity-related claimants hide substantial unemployment.

Drawing on official statistics and proven methods, the report estimates that in early 2022 the real level of unemployment across Great Britain as a whole was just over 2.3 million. This compares with 1.77 million on the claimant count and only 1.31 million on the government’s preferred measure based on ILO criteria and the Labour Force Survey.

The report estimates that there are some 790,000 ‘hidden unemployed’ on incapacity benefits. These are men and women who might have been expected to be in work in a genuinely fully employed economy. They do not represent fraudulent claims and they account for slightly less than a third of the headline total of incapacity claimants of working age.

The real level of unemployment is estimated to be broadly the same as in 2017, when similar figures were last produced, but remains lower than the levels in the immediate wake of the financial crisis or in the 1990s.

In Wales hidden unemployment is estimated to account for more than half of all unemployment, and in Scotland, the North West, North East and South West hidden unemployment accounts for approaching half the total. In London and the South East hidden unemployment accounts for only a fifth.

Hidden unemployment is disproportionately concentrated in the weakest local economies, particularly Britain’s older industrial areas and a number of seaside towns. In the worst affected places, the estimated real rate of unemployment exceeds 10 per cent of all adults of working age.   By contrast, in substantial parts of southern England outside London the rate is around 2 per cent.

The report concludes that whilst some parts of Britain are now at or close to full employment, the economy as a whole is still some way off and substantial unemployment persists in other parts of the country.

The data for unitary and district local authorities shows that in 2022 there are really three different Britains:

FULL EMPLOYMENT BRITAIN (below 4% real unemployment)

• 141 local authorities
• 20 million people
• Average real unemployment 8%
• 14% of unemployment ‘hidden’

MIDDLING BRITAIN (4-8% real unemployment)

• 158 local authorities
• 31 million people
• Average real unemployment 0%
• 34% of unemployment ‘hidden’

 

HIGH UNEMPLOYMENT BRITAIN (more than 8% real unemployment)

• 64 local authorities
• 14 million people
• Average real unemployment 4%
• 42% of unemployment ‘hidden’

The report argues that Levelling Up has a key role to play in reducing unemployment in less prosperous areas and there needs to be help too, including from employers, in maintaining labour market engagement among men and women with ill health or disabilities.

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Download the full report
http://shura.shu.ac.uk/30252/

Download the data set
https://shurda.shu.ac.uk/id/eprint/150/

View interactive maps
https://public.tableau.com/app/profile/david.leather/viz/RealLevelofUnemployment2022/WhatisRLU?publish=yes

Further links

https://www.shu.ac.uk/centre-regional-economic-social-research/publications/the-real-level-of-unemployment-2022

Research England’s Enhancing Research Culture Fund