From the TUC

Want Work Rates and the Recession

12 Aug 2009, by in Economics, Labour market, Society & Welfare

How many people want work but can’t get it? A lot more than you’d think.

The unemployment figures never tell us the full story about recessions, the true measure of how many men and women are frozen out of jobs is always much higher. By the middle of 2009 there were four and a half million people who hadn’t got a job but wanted one; and three quarters of a million who hadn’t got as much work as they wanted.

When the unemployment figures start to hit the headlines, many people are surprised to learn that there are two measures of unemployment, and the ‘claimant count’ (the number claiming Jobseeker’s Allowance) is a lot lower than the headline figure. This can be a healthy reminder that Jobseeker’s Allowance isn’t the skivers’ hand-out of reactionary fantasy – large numbers of people who don’t have a job and are trying to get one never qualify for Jobseeker’s Allowance.

It is also a useful reminder: working out a figure for the level of unemployment is never simple. In addition to the ‘claimant count’ figure, there’s the figure that most headline writers use these days, which is based on a definition established by the International Labour Organisation (not to be confused with the Labour Party, it is a UN agency). Using ILO definitions, everyone in the world (in theory) can be classified by their employment status:

  • ‘Economically active’ people, who are either
    • Employed (this includes self-employed people) or
    • Unemployed
  • ‘Economically inactive’ people, people who are outside the labour market because they are retired, looking after families, disabled, students and so on.

To be counted as unemployed, you have to want a job but not have one, have looked for work in the last 4 weeks and be ready to start work in the next two weeks (or waiting to start a job you’ve just got). In the latest unemployment figures, there were more than 1.5 million unemployed on the claimant count, but a fraction over 2.4 million unemployed using the ILO definition.

If you want to measure how many people are unwillingly not in employment the difficulties don’t stop there. The definition of unemployment means that there are plenty of people who don’t have a job but still want one – for various reasons they may not have been looking recently, or may not be able to start work straight away, so they are classed as ‘economically inactive’ even though they really want paid jobs. Women and disabled people are especially likely to be in this position.

Because of this problem, the employment figures don’t simply classify people as ‘economically inactive’ – the survey the figures are based on asks them if they want a job. One difficulty with using these figures is that you can’t simply look at everyone over school leaving age. It’s confusing to include the ten million people over state retirement age, so the figures for economic inactive are usually limited to people of ‘working age’ 16 – 64 for men, 16 – 59 for women. In the latest employment figures there were 7,955,000 working age people who were economically inactive, of these, 2,130,000 said they wanted a job.

In other words, although the figures in the commonly quoted figures said there were either 1.5 million or 2.4 million unemployed, the number of people who wanted a job was more like 4.6 million. On top of this, there were 964,000 people who had got part-time jobs, but said that the only reason they were working part-time was that they could not get a full-time job.

To try to get a handle on this picture as the recession develops, I will be reporting from time to time on a broad measure of jobs shortage: Want Work levels and rates. So that I can get a consistent picture I will only be looking at figures for people of working age, but the number of people over state retirement age who say they are unemployed is quite small – 34,000 in the latest figures.

The Want Work level is quite simple: the number of unemployed people of working age, plus the number of economically inactive people of working age who say they want a job.

The Want Work rate is a little more complicated: from the working age population, take away the number of people who are economically inactive but do not want work; the Want Work rate is the Want Work level as a proportion of this figure.

In addition, I will be reporting on the number of people in involuntary part-time work as a separate figure; we cannot include them in the Want Work figures, because they do have jobs, but they are undoubtedly part of the overall figure. The figures for 2008-9 show the progress of the recession so far:

Want work level Want work rate Part-time – couldn’t find full-time
2008
Apr-Jun

3,825,000

12.0%

685,000

Jul-Sep

3,938,000

12.3%

710,000

Oct-Dec

4,061,000

12.7%

757,000

2009
Jan-Mar

4,257,000

13.3%

859,000

Apr-Jun

4,531,000

14.1%

964,000

Of all the working age people who might want a job, one in seven does not have one, over four and a half million people, and nearly another million don’t have as much work as they want.

2 Responses to Want Work Rates and the Recession

  1. Sam
    Aug 13th 2009, 8:36 pm

    There’s a fourth category, of course – people who have a full-time job, but one which pays rather less than the one that they used to/ would like to have.

    If a skilled mechanic loses his job because his employer goes bust, and the best job he can find is a full-time supermarket shop assistant job, he’s just as much underemployed as the shop assistant who would like to work full-time but is only offered 20 hours a week, and just as much a victim of the current economic climate. He’s also rather harder to count accurately.

    The self-employed person who is getting less business because of the recession is still harder to count. The employee who didn’t get a promotion, because his company didn’t expand because of the recession? He still has the job he used to have, but he’s a victim too.

    It seems as though one could data-mine the HMRC database and produce some interesting plots. I don’t think anything they publish shows quite the right thing, though.

  2. September’s ‘Want Work’ figures | ToUChstone blog: A public policy blog from the TUC
    Sep 17th 2009, 5:17 pm

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