Analysis of this morning’s jobs data by the Institute for Employment Studies (IES) has found that unemployment has risen more in the last two months than it did in the first year of the Great Depression. Claimant unemployment is already up by 1.6 million since March to 2.8 million, while in the whole year after the 1929 Wall Street Crash it rose by 1.0 million. The year-on-year increase in claimant unemployment is now the highest ever recorded.
Steep falls in vacancies also mean that more claimants are competing for fewer jobs. Before the crisis began, there were 1.5 claimants for every vacancy. Right now, IES estimates that that figure has increased to 8.5 claimants per vacancy.
Meanwhile detailed analysis by Council area suggests that the situation is far worse in many ex-industrial, inner city and coastal areas – so many of the same areas that were worst off before the crisis began.
At regional level:
These increases in claimant unemployment are not yet feeding through into the official, survey-based measure of unemployment, which lags the claimant measure and is averaged over three months (i.e. the Labour Force Survey data released today covers February-April 2020). However analysis suggests that in the single month of April, employment fell by 300 thousand with much of this translating into ‘economic inactivity’ – or people neither looking nor available for work. This is likely explained by people setting up their claims for Universal Credit, with unemployment rises likely to start to feed through in the official data from next month.
Commenting on the figures Tony Wilson, Director of the Institute for Employment Studies, said: “If the public health crisis is just starting to ease, today’s figures show that the unemployment crisis is only just beginning. There can be no doubt now that we are on course for claimant unemployment of three million by next month, and it may well reach the highest ever recorded. It’s clear too that this crisis is hitting many poorer areas hardest – with coastal towns and ex-industrial areas seeing particularly big increases in unemployment.
“We have seen some tentative signs in the last week that hiring may just be starting to pick up again, but with the Job Retention Scheme beginning to wind down from the end of next month we need urgent measures now to kick-start hiring and encourage employers to keep their current staff on. Top of the list should be a cut to employer National Insurance. At the same time, we need to double the size of our employment services so that everyone gets the help that they need to find new work, and we need to guarantee that all young unemployed people will have the opportunity of an education place, apprenticeship or job.”
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