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Over 20 per cent of young people now unemployed in the UK

In the three months to the end of November there was a rise in unemployment of 32,000 in the 16-24 year old category. This means that the number of young people without a job has now reached 951,000, which is the highest figure recorded since records began in 1992.

Looking at the labour force as a whole, unemployment rose in the same quarter by 49,000 to reach just under 2.5 million.  This left the unemployment rate the same at 7.9%. At the same time the numbers in employment fell by 69,000 to reach 29.09m. This suggests that some people have dropped out of the labour force.

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On top of this, the Department for Work and Pensions, soon to be renamed the Department for Lack of Work, announced that 9,300 jobs were to go amongst Jobcentre Plus employees by March 2013. They are dealing with a 25% cut in budget. So if the department responsible for finding jobs for people is actually laying people off, who is going to help the unemployed get back into work?

Also, the official figures show that there is a form of hidden joblessness, which does not reveal itself in the headline figures. There are now no less than 1.16 million people who are currently working part-time, because they cannot find a full-time job. They don’t want to work part-time but they currently have no alternative. Their numbers were added to by some 26,000 in the three months to the end of November. So there is serious underemployment which needs to be added to the actual unemployment. In both circumstances we have the wastage of unused factors of production.

The Chartered Institute of Personnel and Development are forecasting that unemployment will rise from 7.9% to 9% this year, with 2.7 million people out of work. This would be the highest unemployment total for seventeen years.

The other measure of unemployment which is tracked, called the Jobseeker’s Allowance or claimant count, shows a fall in the number claiming benefits of 4,100 in December, down to 1.46 million according to the ONS. It is rather perverse, when the two measures of unemployment are moving in different directions. Partly this is due to the fact that some people who lose their jobs are not eligible for unemployment pay. Plus it is likely that there are more professional workers losing their jobs who will attempt to live off their savings, rather than suffer the stigma of signing on.

Those claiming unemployment benefits for at least six months rose by 7,200 to reach 960,300. This level of long-term unemployment is worryingly high. Unemployment is a lagging indicator which can continue to rise after the end of a recession, but with increasing public sector unemployment in the pipeline, it is doubtful that the private sector will be able to take up the slack sufficiently.

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Posted in Employment, unemployment

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