From the TUC

Lowest paid worst hit by recession

09 Sep 2009, by in Economics, Labour market

This week we published an analysis of Jobseekers’ Allowance looking at the relative increases in claimant unemployment among different occupational groups (a full list of the increases in claimant unemployment for all occupations can be downloaded here). The analysis shows that while workers from every sector have been affected by the downturn, 50% of the increase in claimant unemployment has been borne by workers from just 17 occupational groups – including retail assistants, van drivers, cleaners, bar staff and general office assistants.

Our analysis also shows that some occupations have disproportionately large numbers of claimants relative to the overall size of their occupational workforce. For example, 37% of those who usually work in elementary administrative occupations are currently claiming JSA, as are 30% of those who usually work in elementary process plant occupations and 20% of those who usually work in elementary good storage occupations. In contrast, 1% of those who usually work as financial institution and office managers and legal professionals are claiming.

The larger numbers of claimants from lower earning groups can partly be explained by the larger number of jobs in these areas across the economy. However, it is also true that many elementary occupations are experiencing higher rates of unemployment than professional occupations – the ILO unemployment rate for those in elementary jobs is 12.7%, and has risen 3.6 percentage points on the year, while the rate for those in professional occupations is 2.3%, having risen by 1.2 percentage points – three times slower.

And analysis of the proportion of claimants who are unemployed for over 26 weeks shows that workers from lower paid occupational groups are spending the longest on JSA. For example, 41% of those in elementary sales positions, 40% of those in elementary process plant occupations and 40% of those in housekeeping occupations have been unemployed for over six months. In contrast, 20% of legal professionals, 17% of architects, town planners and surveyors and 19% of business and statistical professionals have been out of work for over a six month period.

We are not arguing that those in professional jobs have been unaffected by the recession. Although the pre-recession incidence of unemployment among many professionals was low, some have experienced extremely large proportional rises in claimant unemployment. For example, architects have seen a 649% increase in unemployment, quantity surveyors a 462% increase and taxation experts a 411% increase. But the actual numbers have been relatively low. Our analysis shows that in total the 25 occupations that have seen the largest proportional rises in claimant numbers only account for 5% of the total number of new claimants over the year. And although there may be higher rates of underclaiming of JSA among professional groups, who may have higher household incomes and be less likely to qualify for income based JSA, this variation will not account for the very large discrepancies in claimant levels between many elementary and professional jobs.

So, those who were worse off to start with are being affected most, and JSA, at 10% of average earnings, is at its lowest relative value for decades. The need to invest in tackling unemployment and creating new jobs has never been greater.