Unemployment tops 5.6 million
Discussion
The BBC reports that unemployment has risen at its slowest rate since July 2008. What it doesn’t do is point out why.
One reason is that economic inactivity has increased. People who would otherwise show up in the unemployment numbers have simply dropped out of the workforce.
The number of economically inactive people rose by 50,000 in the three months to June-August for those of working age. (table 1 of this pdf). This accounts for almost all the increased population (51,000) during this time. This represents a sharp change from what happened in the boom. In the three years to November 2007, the working-age population grew by 742,000, but economic activity rose by just 32,000.
In other words, the rise in measured unemployment is being held down by an increase in the numbers of students, home-makers and discouraged workers*. Many of these, though, would like to work. The number of economically inactive people saying they want to work rose by 85,000 in the latest three months**.
Unemployment is also being disguised by greater numbers of enforced part-time workers. The numbers of part-timers who say they’d like a full-time job rose by 53,000 in the latest three months.
If we add together the measured unemployed, the economically inactive who’d like to work and the part-timers who’d like a full-time job, we get an unemployment count of 5.6 million; this is our equivalent of the US‘s U-6 measure of labour under-utilization. That’s 14.9% of the working age population, the highest rate since March 1997.
What’s more, the divergence between hidden and measured unemployment seems to be increasing. In the last three months, hidden unemployment rose 225,000 compared to a rise in measured unemployment of 88,000 - a ratio of 2.5. But in the two years to December 2008, hidden unemployment grew by just 1.4 times as much as measured unemployment. This suggests that the official unemployment figures have recently become an even more distorted measure of excess labour supply.
Warning: That's a link to a intelligent leftwing blog where he says nasty thinks about Boris. Some PHers might not find it suitable.
One reason is that economic inactivity has increased. People who would otherwise show up in the unemployment numbers have simply dropped out of the workforce.
The number of economically inactive people rose by 50,000 in the three months to June-August for those of working age. (table 1 of this pdf). This accounts for almost all the increased population (51,000) during this time. This represents a sharp change from what happened in the boom. In the three years to November 2007, the working-age population grew by 742,000, but economic activity rose by just 32,000.
In other words, the rise in measured unemployment is being held down by an increase in the numbers of students, home-makers and discouraged workers*. Many of these, though, would like to work. The number of economically inactive people saying they want to work rose by 85,000 in the latest three months**.
Unemployment is also being disguised by greater numbers of enforced part-time workers. The numbers of part-timers who say they’d like a full-time job rose by 53,000 in the latest three months.
If we add together the measured unemployed, the economically inactive who’d like to work and the part-timers who’d like a full-time job, we get an unemployment count of 5.6 million; this is our equivalent of the US‘s U-6 measure of labour under-utilization. That’s 14.9% of the working age population, the highest rate since March 1997.
What’s more, the divergence between hidden and measured unemployment seems to be increasing. In the last three months, hidden unemployment rose 225,000 compared to a rise in measured unemployment of 88,000 - a ratio of 2.5. But in the two years to December 2008, hidden unemployment grew by just 1.4 times as much as measured unemployment. This suggests that the official unemployment figures have recently become an even more distorted measure of excess labour supply.
- Sickness numbers haven’t changed much.
- Of course, you might question how much they really want to work.
Warning: That's a link to a intelligent leftwing blog where he says nasty thinks about Boris. Some PHers might not find it suitable.
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