Long-term sickness has led to a growing number of people who are neither working nor looking for a job, known as economically inactive. This can in turn, be a significant risk to economic growth.
The UK unemployment report for the three months ending April 2024 was released on Tuesday morning, coming in at 4.4%, according to the Office for National Statistics. This was more than both the previous period and analyst expectations of 4.3%.
This was also the highest figure since September 2021. The number of people without a job rose to 1.51 million, inching up 24,000. A significant portion of this number was made up by people who did not have a job for the last 6 months.
The number of people without jobs for more than 6 months, going up to 12 months also rose, as did the number of people who were unemployed for more than a year.
Furthermore, during this period, the number of economically inactive people reached 9.43 million. These are those who are classified as people who are neither currently working nor looking for a new job.
This included a record number of people out of work due to long-term sickness, which rose 55,000 to 2.83 million in the three months to April, which is a new record. This may be due to the long-term effects of COVID-19, as well as associated illnesses, amongst others.
In the long-term, the rise of the economically inactive could pose a severe threat to the UK’s economic growth, as it will reduce the number of workers significantly.
Economic inactivity increases in the UK
Tony Wilson, director of the Institute for Employment Studies said, as reported by The Telegraph, “This Parliament has seen the largest rise in economic inactivity and largest contraction in the size of the workforce since comparable records began in 1971.
“And this just isn’t happening in other countries, with the UK virtually the only developed economy where the employment rate has fallen since the COVID-19 pandemic.
“We need to address this urgently, because when employment stops growing, the economy stops growing too. Reforming employment support needs to be a top priority for the next Parliament so that more people can get access to the help that they need to get back into work and get on in work.”
The number of people with jobs surged to 33 million, a rise of 29,700, mainly because of more full-time and part-time self-employed workers. However, the number of full-time employees took a hit in the three months to April.
The economic inactivity rate also inched up to 22.3%, a rise of 0.2%.
However, wage growth was still strong, with year-on-year regular pay in the UK, not including bonuses surging 6% to £640 per week in this period. The business and finance sector saw the most increases, along with the services and manufacturing sectors.
