Recession report #14: Mixed news in a fragile labour market
Today we have published our 14th Recession Report, which looks at the labour market data for the period August to October 2009 (with November data for some indicators). As was widely reported in December, the release showed that claimant unemployment had fallen by 6,300 between October and November – a result of a reducation in in-flows (new claimants) and an increase in off-flows (people leaving JSA). Inactivity data were also better than we could have expected they would be at this point in the downturn. Although levels of economic inactivity increased over the year, this was as a result of a rise in students – the number of people economically inactive for other reasons actually saw an annual reduction. And while ILO unemployment is still rising, the speed at which is increasing is continuing to slow.
But although this is good news a full labour market recovery is a long way off. Indicators of ongoing fragility include large proportional increases in the numbers of workers who are inactive becuase they can’t find work and have given up looking, sharp reductions in the number of full-time jobs and fast rising levels of long-term unemployment. The number of people out of work for over 12 months is now a matter for major policy concern – and the findings from the second section of our report, which focuses on the health impacts of unemployment, show why.
The relationship between unemployment and health has been studied for a long time, and the link between unemployment and premature death has been established since 1940. In March 1991, Richard Smith, the then executive editor of the British Medical Journal, greeted that decade’s recession with a famous editorial: “Unemployment: here we go again”. He claimed that:
the evidence that unemployment kills – particularly the middle aged – now verges on the irrefutable.
He pointed to a study of redundancy in a Wiltshire meat products factory that found that redundancy increased consultancy rates by 20 per cent and outpatient hospital visits by 60 per cent. In a follow-up study, “the unemployed men consulted general practitioners 57% more about 13% more illnesses, were referred to hospital outpatient departments 63% more often and visited hospital twice as often.”
In March 2009, the Journal continued the tradition of hard-hitting editorials on this subject when Prof Danny Dorling asked considered the probable impact of rising unemployment on health. The editorial noted research showing the links between suicide and unemployment (looked at in more detail in our full Recession Report) and that unemployment “increases rates of depression, particularly in the young”. Dorling quoted research looking at men who had been continuously employed for at least five years in the late 1970s – it found that mortality doubled in the five years after redundancy for those aged 40 – 59 in 1980.
The evidence base in this area is incredibly strong – there are clear and concerning links between unemployment and poor physical and mental health. This extensive evidence demonstrates the importance of Governments ensuring that proactive strategies are in place to prevent widespread long-term unemployment taking hold. Such an approach is vital to protecting individuals and families, as well as to limiting future social and economic costs.