It is possible that the record claimant count rise of 118,000 in the depths of the early 1990s recession could even have been exceeded last month
The relentless growth in Britain’s army of the jobless will be confirmed today as unemployment is set to burst through the 2 million mark for the first time in over a decade.
Experts are warning that unemployment will easily break the 3 million barrier this year, with many more people facing a grim 2009 that is likely to keep consumer spending, and the whole economy, depressed.
But while attention has focused on the widest survey of joblessness known as the ILO measure, there could also be a very big rise in the claimant-count measure because February has a five-week gap between count dates, as opposed to four in January. Many people laid off in January may not have signed on at job centres until last month.
This means it is possible that the record claimant-count rise of 118,000 in the depths of the early 1990s recession could even have been exceeded last month, up from the increase of around 80,000 that has been the norm in recent months.
That total would be even worse if 16- and 17-year-olds were included in the claimant count and if unemployed City workers were poor enough to be eligible for jobseeker’s allowance.
The wider ILO measure, though, does include young workers and shows that they account for nearly 40% of the rise in joblessness over the past year. It has risen by a total of nearly 400,000 over the past year while the claimant count has jumped even further, by 440,000, to 1.23 million, or 3.8% of the workforce. The ILO rate is higher at 6.5% and set to shoot above 10% later this year.
There would also be more people out of work if various firms around the country, especially carmakers , had not come up with novel schemes to cut working hours or mothball plants. This shows up in the data on total hours and average hours worked – both of which are falling. Some economists have speculated that unemployment would be higher still if some people were not hidden by the “economic inactivity” label that encompasses nearly 8 million people of working age who are either students, long-term sick or looking after the home. But figures for “inactivity” have remained steady over the past year or two.
As is typical of recessions, male unemployment has risen nearly three times as fast as female. Much of the reason is that many more women work in the public sector, which has largely been spared the swingeing job cuts of the private sector.
At the same time, full-time jobs are declining fast while the number of part-time jobs is actually still rising, possibly as people who lose a full-time job opt to work fewer hours, or as a spouse whose husband or wife loses a full-time job takes a part-time one to make ends meet. As more women work part-time than men, it would also explain why female unemployment has risen only slowly.
Unusually, there is very little difference between manufacturing and service-sector unemployment, or between the regions. “What we have seen is a general slump in global demand which has hit the demand for labour everywhere. So there is no clear north/south or manufacturing/services split in this recession,” says John Philpott, chief economist at the Chartered Institute of Personnel and Development.
Builders surprisingly resilient
One curiosity in the official data is that there does not seem to have been a big drop in the numbers of people employed in the construction sector, which accounts for about 6% of the economy. With the widely documented collapse in the commercial property sector and in housebuilding, this is baffling the experts, who speculate that public investment projects such as the preparations for the Olympics could be helping support the industry. Another factor could be that many builders are self-employed and are simply working fewer days in a week in response to a drop-off in demand.
There are also large numbers of immigrant workers involved in the construction sector and records of exact numbers may be poor, especially as the data is based on surveys of workers and so may simply have missed the fact that many Poles, for example, are returning home as demand for their services slumps.