Wednesday, 27 August 2008
The unemployed have become workless
Where did the unemployed go? Back in the early 90s, during the last recession, unemployment was over 3 million. Was this huge army absorbed into the labour market as productive workers, or were they simply reclassified and removed from the unemployment numbers?
Each year, we get a partial answer to this question. The Labour Force survey calculates the number of households where there is no working adult present. The last survey, which was completed in June, shows that almost 16 percent of households are workless. That number has fallen slightly since new Labour were elected. Back in 1997, the comparable figure was 18 percent.
So should we congratulate new Labour on this modest improvement? Sadly, no; the percentage of workless households might have fallen, but the actual number has barely changed.
Back in 1997, there were about 3.2 million workless households; today the number is only 185,000 lower. At the same time, the total number of households increased by almost 2 million, mostly due to rising migration. It is a statistical inevitability of the percentage number of workless households falls.
The Labour Force survey produces another frightening statistic. There are 1.8 million children living in a household where nobody works, and presumably lives on some form of state benefit. That is approximately 1 child in every 6.
So, despite all the rhetoric, unemployment is alive and well and hiding in the Labour Force Survey. Instead of calling them unemployed, they have been reclassified under the more benign sounding category of workless.