A look at one of the last government’s “failures”

23 Nov 2010, by Richard Exell in Economics, Labour market

Here’s an experiment. Have a look at the chart below. I deliberately haven’t labeled it; for the moment let’s just take it that it shows what happened to a couple of aspects of a social problem over the last 13 years:

I’d say that shows that the scale of the problem diminished; plainly it got worse again in 2008, so I’d guess that had something to do with the recession. Even so, the level of that problem was lower in 2010 than it had been in 1997.

OK, enough with the coyness. I used the new figures for “working age households” that were published yesterday. The red dotted line shows the proportion of working age people living in a workless household – that is, that contains at least one person aged 16 and 64, where no-one aged 16 or over is in employment. The blue unbroken line shows the proportion of children living in workless households.

It would have made the chart too complicated to read easily, but I could also have shown a smaller decline in the proportion of households that are workless (from 19.8 to 19.2 per cent) and a much larger decline in the proportion of lone parent households that are workless (from 50.6 to 39.7 per cent.)

So why do so many people have the impression that workless households was one of the last government’s great failures? After all, that’s why I didn’t show the labels, I wanted you to see the change without any preconceptions.

Part of the story is that the figures for worklessness levels aren’t as impressive as these figures for worklessness rates. The number of children in workless households still came down, but the number of workless households and of people in workless households went up:

Worklessness levels (000s)

 But given that the number of working age people has been growing throughout the past decade and a half, I’d say we get a clearer picture from the percentages. (And if it hadn’t been for the recession, even the numbers were clearly coming down.)

Of course, five million people in working age households where no-one is in employment is far too many, and you could argue that the last government should have done more. But it simply isn’t fair to claim that they are responsible for the problem.