Sunday, 18 May 2014
Saturday, 7 July 2012
Sunday, 22 January 2012
getting on with it
Tuesday, 27 December 2011
Tuesday, 20 December 2011
Tuesday, 25 May 2010
Over the last couple of years I have seen changes to many changes in the labour market2010 Cuts statement
The Department for Work and Pensions will make £535m of cuts. Of that, £200m will be saved through reduced IT projects and consultancy, marketing, travel and a recruitment freeze. The remaining £335m comes from measures such as winding down, then cutting altogether, the Future Jobs Fund which will save £290m. The department will also stop the £1,000 subsidy for employers to take on anyone who has been out of work for six months.
This has beenthe statement madein May 2010 as 6 billion pound cuts were announced
So what is the definition of unemployment?
Unemployment
Friday, 27, Aug 2004 09:23
What is unemployment?
Unemployment is an economic indicator that refers to the number or proportion of people in an economy who are willing and able to work, but are unable to get a job. A person in this situation is said to be unemployed. People who are not willing or able to work, for whatever reason, are "economically inactive" and do not count towards unemployment figures.
High levels of unemployment are usually typical of a struggling economy, where labour supply is outstripping demand from employers. When an economy has high unemployment, it is not using its economic resources in the best possible way.
Unemployment also carries significant social costs. People who are unable to find work must frequently rely on benefits for income: if they have financial or family commitments, this can make life extremely difficult. Moreover, the sense of failure, boredom and rejection that being unemployed can generate has real social consequences. Studies have repeatedly linked unemployment to rising crime and suicide rates and the deterioration of health.
The causes of unemployment are manifold. Economists distinguish a number of types of unemployment, however: cyclical unemployment is brought about by the vagaries of the business cycle; structural unemployment is brought about by changes in the economy or the labour market, when the jobs available do not fit the workforce's skills; frictional unemployment is the phenomenon of people being "between jobs"; and seasonal unemployment is linked to certain types of seasonal jobs, such as farm work and construction.
Background
The history of unemployment in the UK is central to both the economic and social history of the country.
The 1950s and 1960s saw a very low rate of unemployment (around 3 per cent on average) as a result of the "postwar boom". Servicemen during the Second World War had been promised full employment after victory, and no government of the period was prepared to break this pledge. Technological advance, a stable international trade environment, the success of Keynesian economics and the stability of the Phillips Curve (which postulated a relationship between high inflation and low unemployment) created a situation which did approach full employment - although of course, at that time the majority of women remained in the category of the "economically inactive".
The economic orthodoxies of the boom years collapsed in the 1970s. The energy crises of 1973 and 1979 generated "stagflation", rising inflation and rising unemployment - something the Phillips Curve deemed impossible. In Europe, fixed exchange rates pegged to the German mark forced EU member states to deflate their economies to keep pace with low-inflation West Germany. The failure of Labour's "In Place of Strife" labour market reform proposals in the late 1960s had led to a situation where union power was increasingly stifling markets by keeping wages high. Unemployment topped one million for the first time in January 1972. During the 1979 "Winter of Discontent", when even gravediggers went on strike to protest against pay freezes, unemployment stood at 1.1 million, and the Conservatives swept to power on the message that "Labour isn't working".
However, during the early 1980s, unemployment rose further still - it topped three million in 1982. The January 1982 figure of 3,070,621 represented 12.5 per cent of the working population, and in some parts of the country it was even higher: in Northern Ireland, unemployment stood at 20 per cent, while in some areas dominated by declining industries such as coal mining, it was much higher still.
Unemployment did fall through most of the 1990s and fell below one million for the first time since 1975 in March 2001. The causes of this achievement are disputed. The Conservatives argued that the Labour government had been left a "golden economic legacy" by the outgoing Major administration, and that it had ridden an eight-year global boom, following Tory economic plans. Labour, by contrast, put the figures down to its successful economic management and reforms (particularly the independence given to the Bank of England), the extensive attention it paid to education and skills, and the impact of its New Deal programme for reducing joblessness.
Controversies
Throughout history, policy-makers have from time to time taken the view that the macroeconomic benefits of high unemployment outweigh its economic and social costs. This was the case during the early 1980s. Most of the time, however, governments are unwilling to permit high unemployment, due to the demonstrated social effects, the economic underperformance it reflects and the public cost in terms of benefit payments it demands.
Nevertheless, as an aggregate figure the "headline" unemployment figure and rate can only tell part of the story. Structural differences between the regions of the UK have often meant that a nationwide figure masks localised problems. For years, unemployment in the north of England, Scotland and Wales have been considerably higher than in the prosperous South East and London. Even within regions, there are local pockets of high unemployment. Many towns remain dominated by a small number of large employers: when a locally-significant business closes, such as the mines during the 1980s or Rover's Longbridge plant in Birmingham more recently, the effect can be devastating.
Headline figures can also disguise other complexities, such as the prevalence of unemployment amongst ethnic minorities, women, disabled people, young people, and people who have been unemployed for long periods of time.
At present, there are two principal measures of unemployment used by the Government: the International Labour Organisation (ILO) measure (the UK's version being known as the Labour Force Survey or LFS unemployment); and the Claimant Count. The former is based on a survey of 57,000 households, and classifies participants as employed, unemployed or economically inactive on the basis of work done in the previous week. The latter is based on the numbers claiming unemployment-related benefits. On its election in 1997, the Government proclaimed its preference for the ILO measure, because of its international recognition. However, it claimed that unemployment had fallen below one million in 2001 on the basis of the Claimant Count measure only: at that time, ILO unemployment stood at 1,535,000.
This is only the latest example of the problem of measuring unemployment. Most governments are keen to minimise the appearance of unemployment, not only for political reasons but also for the economic signals it sends out. Over the last 25 years, numerous revisions to the official definition of "unemployment" have been made, which have almost universally revised it downwards. Labour has frequently accused the Conservatives during the 1980s of moving unemployed people on to sickness benefits - classifying them as economically inactive rather than unemployed - as a strategy for cutting the unemployment figure.
In recent years, the problem of bringing more economically inactive people into the workforce has been rising on the political agenda across Europe. A 2000 study found that the economically active proportion of the population across the EU was just 69 per cent, around 77 million adults. The savings of the current workforce are increasingly believed to be insufficient to pay for the pensions of the soon-to-retire. The Government has pursued this agenda by a combination of incentives, such as training and childcare, and sanctions, principally tightening eligibility for benefits such as Incapacity Benefit.
Statistics
The unemployment rate was 5.5 per cent for the three months to July 2008, up 0.2 over both the previous quarter and over the year. The number of unemployed people increased by 81,000 over the quarter and by 72,000 over the year, to reach 1.72 million.
The claimant count was 904,900 in August 2008, up 32,500 over the previous month and up 56,300 over the year. The Claimant Count has increased over the month in all regions of the UK.
The redundancy level for the three months to July 2008 was 138,000, up 28,000 over the quarter and up 18,000 over the year.
The inactivity rate for people of working age was 20.8 per cent for the three months to July 2008, unchanged over the previous quarter but down 0.4 over the year. The number of economically inactive people of working age increased by 4,000 over the quarter but fell by 97,000 over the year to reach 7.86 million.
There were 613,200 job vacancies for the three months to August 2008, down 56,900 over the previous quarter and down 53,200 over the year. All sectors showed falls in vacancies over the quarter with the largest falls occurring in distribution, hotels and restaurants (down 18,200) and finance and business services (down 16,600).
Source: Office for National Statistics - September 2008
Quotes
"When you read the small print of Government statistics, you find a very different picture where youth unemployment is rising, the number of British people in work is falling fast and tens of thousands of unemployed people are deliberately excluded from the figures."
Shadow Work and Pensions Secretary Chris Grayling - September 2008
"I believe we are the only party that has the progressive ideas to tackle poverty; to help people back into work; and to make work pay."
Liberal Democrat Shadow Work and Pensions Secretary, Jenny Willott - September 2008
Note the author of the quote on the bottom. Chris Graylings comments are also of interest
The Employment Graph indicates that there has been a significant indication of the increase in unemployment This graph can now can clearly indicate the level and direction in the employment figures
Jobseekers allowance Claim
UK unemployment increases to 2.5 million
The latest figures give a mixed picture of the UK labour market |
The number of people unemployed in the UK rose by 43,000 to 2.5 million during the three months to February, official figures have shown.
The jobless total is now at its highest since 1994.
The rate of unemployment now stands at 8% - the highest since 1996 - the Office for National Statistics said.
However, the total number of people claiming unemployment benefit fell in March by 32,900 to 1.54 million - a much sharper fall than expected.
The ONS figures showed youth unemployment rising, with 929,000 16 to 24-year-olds out of work in the December to February period - a rise of 4,000 on the previous three months. Unemployment among the over-50s rose by 7,000 to 396,000.
CHANGES IN UNEMPLOYMENT TOTALS ACROSS THE UK Yorks/Humber: Up 13,000 to 253,000 East Midlands: Up 13,000 to 180,000 North West: Up 11,000 to 290,000 East: Up 11,000 to 198,000 South East: Up 11,000 to 284,000 Wales: Up 10,000 to 131,000 Scotland: Up 6,000 to 208,000 South West: No change - 170,000 Northern Ireland: Down 1,000 to 53,000 North East: Down 3,000 to 120,000 West Midlands: Down 6,000 to 253,000 London: Down 22,000 to 363,000 Source: ONS |
There was also a rise in the number of people classed as economically inactive - those out of work and not seeking work.
They rose by 110,000 to a record total of 8.16 million, equivalent to 21.5% of the population.
The majority of that rise was due to an increase in the number of students, as young people decided to enter education instead of seek jobs.
Commenting on the figures, the Work and Pension Secretary Yvette Cooper, said the figures were in line with the government's expectations.
"What this shows is that we are not out of the woods yet," she told the BBC.
"That's why it is so important that we keep increasing the support for the unemployed, but also that we sustain the overall support for the economy."
'Jobless recovery'
But Theresa May, shadow work and pensions secretary for the Conservatives, said it was "grim news for tens of thousands of families up and down the country".
"A clear sign that the government's policies aren't working," she said.
"I think the government isn't giving enough support in terms of the welfare system as a whole."
City economists held equally mixed views.
Vicky Redwood, economist at Capital Economics, warned the figures pointed to a recovery without job growth in the UK economy, particularly with public sector cuts looming further down the line.
But Brian Hilliard from Societe Generale was more optimistic.
"The labour market is in far better shape than we dared to hope for at this stage of the economic cycle," he said.
Figures from the ONS also showed a rise in wages for those still in work.
Average weekly earnings including bonuses were up 2.3% in the three months to February compared with the year before.
Perceptions of Unemployment as an issue have always been a key issue. This graph shows perceptions andhow they have been seen over a 3 decade period
Drastic changes sincethe Global downturn have had significant effects
http://www.economicshelp.org/2008/10/unemployment-in-uk.html2008-10
Unemployment in the UK
Source: ONSYesterday, Britain experienced the quickest rise in unemployment since the last recession, 17 years ago. Statistics from the International Labour Organisation showed a rise in unemployment to 1.69 million (an increase of 164,000 in the 3 months to August). The Government's claimant count is 978,000. Over the coming months, unemployment is liable to rise to well over 2 million and could reach 3 million the rate of unemployment in the last 2 recessions.
Brief History of Unemployment in UK
After the ravages of the Great Depression era where unemployment was over 25%, unemployment in the UK remained relatively low from 1945 until the late 1970s. When Beveridge introduced the Welfare State in 1945, one thing he mentioned was the necessity of maintaining full employment. Using demand management policies and benefiting from a boom in global trade, the UK more or less achieved full employment, until the 1970s. In the 1970s, rising oil prices caused stagflation and unemployment began to rise but was still relatively low.
It was in the manufacturing recession of 1981 when unemployment rose to unprecedented levels. Not only did unemployment reach 3 million, but, it remained stubbornly high until 1986 well into the economic recovery. The huge rise in unemployment was due to the strong value of the Pound, high interest rates and the deflationary impact of strict Monetarist policies. In particular, it was the manufacturing sector that suffered. Male full time, unskilled labour was particularly affected.
Unemployment remained high throughout the 1980s. Even at the peak of the boom in 1989, 1.6 million people were unemployed. This figure involved high rates of structural unemployment (also known as the natural rate of unemployment). This structural unemployment was because the recession of 1981 had made many unskilled workers unemployed. In the fast changing workplace, these former coal miners and ship builders struggled to get work in the new economy. Geographical unemployment was also a strong feature of the 1980s. Former areas of manufacturing and mining, struggled to cope with the large scale redundancies.
In 1991, unemployment rose again, as the economy slipped into another recession. Unemployment peaked in 1993 at just under 3 million. Unlike the 1980s, unemployment fell quicker. From the mid 1990s to 2008, UK unemployment was relatively low. Looking at official statistics, unemployment was fairly close to full employment at just over 3%.
This shows that unemployment is highly cyclical. When the economy goes into recession, unemployment typically has increased to 3 million. If the recession of 2009 is deep, we can expect unemployment to get to 3 million.
Low unemployment was due to:
- Long period of economic growth
- Disguised unemployment, many unemployed were allowed to take sickness and disability benefits. Therefore, they are not counted as unemployed. See also: What is True Level of Unemployment?
- The Labour Force survey has consistently been higher than the government record of people on Job seekers allowance. This reflects the fact it is very difficult to get benefits these days. Some unemployed are not eligible for benefits for a variety of reasons.
- Regional Recovery. Former depressed areas like South Wales and the North East have been relatively successful in finding new industries to replace the old heavy manufacturing.
- New Deal. Better education and training for the unemployed to get back to work.
- Contraction of Credit. Credit crunch has made banks reluctant to lend loans, mortgages and credit. The impact is a reduction in consumer spending, lower investment and lower economic growth. Big investment projects are being delayed until lending becomes easier.
- Global Downturn. The global economy is slowing down, leading to lower exports and international trade.
- Sectors. Certain sectors have been particularly badly hit by the financial crisis, estate agents, banks, construction industry. There will be increasingly a knock on effect to the rest of the economy.
Unemployment Benefit in UK
February 19th, 2010 | unemployment -
Readers Question: explain benefits of increasing rate of unemployment BENEFIT FOR :UNEMPLOYED , society and any cost that may result from such policy.
So what are the Current Rates forJob Seekers including students. The debate about changing the level of Benefit
Current Weekly Rates of Job Seekers Allowance in UK
- Under 24 £50.95
- Age 25 or over: £64.30
Source: Direct Gov
Note: Unemployed may be eligible for other benefits
In any economy there will be some frictional unemployment. It takes time for people to find a job suited to their skills. If you left university with a degree in mechanical engineering, it wouldn’t make sense to get the first job that came along. A good rate of unemployment benefit would enable you to take time in finding a job suited to your skills. A low rate may force you to get a job at McDonalds which would be an inefficient use of spending 4 years at university.
Another potential benefit of raising the job seekers allowance is that it would be an example of expansionary fiscal policy. An increase in unemployment benefit would lead to an increase in spending. (It would be more effective than say tax cuts for high earners. The mpc of the unemployed will be close to 100%. High earners may save tax cuts.)
One of the big mistakes of the Great Depression in the UK was that the government cut unemployment benefits (I think in 1931). The treasury were worried about rising levels of government borrowing so unemployment benefits were cut. Of course this reduced aggregate demand further and caused a deeper recession. (As well as increasing inequality)
Another benefit of raising job seekers allowance is that it would reduce income inequality. The poorest sections of society are generally on benefits such as job seekers allowance. Therefore, raising benefits would be effective in reducing poverty and inequality.
Disadvantage of Raising Unemployment Benefits.
The main problem of raising unemployment benefits is that higher benefits can create disincentives to work. There is an increased incentive to remain on benefits rather than work.However, note that the weekly rate of £65 is hardly going to be much of a disincentive from getting a job which pays NMW of £5.65 an hour.
Reasons for Youth Unemployment
May 19th, 2008 | economics -
Discuss the economics reasons why there is high unemployment rate in 16-18 year old workers. (10 marks)
In the UK, people aged 16-18 are not eligible for unemployment benefits; instead they either have to be in full time education or on a government training scheme.
The reasons for youth unemployment are fairly similar to other causes of unemployment. They include:
- Lack of Qualifications. Young people without any skills are much more likely to be unemployed. (structural unemployment) However, the service sector has increased in importance and this creates unskilled jobs such as bar work, supermarket checkout and waiters.
- Geographical Unemployment. Youth unemployment is often focused in certain areas – usually inner cities where there is a cycle of low achievement and low expectations.
- Black Economy? Official Unemployment may occur in areas where there is a thriving black economy. i.e. there are unofficial jobs for people to take. These jobs may be illegal such as dealing in soft drugs. However, it is hard to ascertain the extent of these unofficial jobs and it is easy to make sweeping generalisations about deprived areas.
- Real Wage Unemployment. You could argue unemployment is caused by labour market rigidities and wages being above the equilibrium rate. However, in the UK, there is a special introductory rate for the minimum wage for 16-18 olds. It is significantly lower than the main minimum wage.
- Frictional unemployment. School leavers may just take time to find the right work.
BBC Youth figures May 2010
Youth unemployment has risen, with 941,000 16 to 24-year-olds out of work in the January to March period - a rise of 12,000 on the previous three months.
 | JOBLESSNESS DATA Download the figures for each constituency across the UK [482 KB] |
The latest figures also showed that the employment rate dropped to 72 per cent, the lowest in 14 years. The number of people employed fell by 103,000 while the number of part-time workers rose by 27,000.
The number of people classed as economically inactive rose 88,000 in the last quarter to a record total of 8.17 million. This total includes students, people looking after a sick relative or those who have given up looking for work.
Looking at the local authority level, if we simply take absolute increases in the
number of claimants from January 2008 to January 2009 across the UK, then the
labour market downturn is a story of the core cities. The largest increases in the total
number of people claiming unemployment benefit have been in the North’s largest
cities – Manchester, Liverpool, Sheffield, Leeds, Hull, Glasgow and Birmingham.
Birmingham has seen a rise of over 9000 claimants amongst the city’s resident
population from January 2008.
The percentage change in claimant counts presents a different geography. Whilst the
absolute figure captures the total increase in numbers of people claiming
unemployment benefits, the relative figure is a percentage that varies according to
the levels of unemployment that existed before the recession. That means that those
places with low levels of unemployment before the recession only need to have a
small number of people moving onto unemployment benefits to show a large
percentage increase. Concurrent with the recession of the 1990-1992, to date the
highest percentage increases in claimant counts have been concentrated in the
South East and East Midlands. The absolute increase in the number of claimant
counts more generally across these regions has, however, been small. East Dorset,
for example, has seen an increase of over 140% in the number of claimants, whilst
the increase in the number of people claiming benefits has been just over 400.
4 ILO
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