To what extend has the current unemployment situation improved in the UK?
Unemployment has become a critical problem in a number of countries due to negative effects on both the economy and our living standards. It can be described as a phenomenon occurring when willing, actively looking for and able to work people face difficulties with getting a job. Staying out of work for a longer period of time affects the individual well-being, often leading to a feeling of rejection from society and depression. Moreover, high unemployment rates threaten economic cohesion (Economou et al 2008: 368), since government expenditure is held back by welfare and unemployment benefits.
What is considered as one of the major causes of unemployment is globalisation. According to Lee (1996), international competition and economic liberalization have brought about market volatility, greater insecurity, wage inequality and the growth of unemployment.
In the UK, the highest level of unemployment in the last 17 years was observed at the end of 2011 when it peaked at almost 2.7 million (BBC 2014). It is needless to say that unemployment rates differ among countries. Unemployment figures, based on a survey conducted by the Office for National Statistics (ONS), demonstrate the average number of people unemployed over a three-month period (BBC 2014).
Hugh Pym, Chief economics correspondent of BBC News, in his article published on the 11th of September 2013, analysed labour market figures that indicated positive signs of improvement of the UK economy. According to the figures, unemployment rate decreased from 7.8% between February and April to 7.7% between May and July. The number of unemployed people in the UK fell 24,000 in the period to 2.487 million. What the statistics also demonstrated that the number of people claiming Jobseeker’s Allowance has fallen to its lowest level since February 2009.
As reported in the article, the lowest rate of unemployment between May and July had the South East of England with 5.8%, whilst the North East had the highest at 10.4%. The greatest drop was in the South East, with 29,000 fewer jobless people than there were in the previous three months, followed by the East Midlands, with a decline of 11,000. Nonetheless, in the North West of England during that period unemployment increased by 13,000.
It is worth highlighting that the number of part-time workers increased to 1.45 million, which is the highest since records began in 1992 and double the number of five years ago. This increase resulted from the difficulty of finding a full-time job. Another significant change has been observed in private sector employment, which rose 114,000 between March and June 2013, while public sector employment fell 34,000. This shows that private companies are capable of driving the recovery of the economy. After the Office for National Statistics (ONS) released the unemployment figures, the pound rose against the euro as well as the US dollar. According to David Kern, chief economist at the British Chambers of Commerce, the positive figures endorse the resilience and flexibility of Britain’s labour market.
The Prime Minister, David Cameron, pointed out the Labour’s predictions concerning job market situation were wrong, since unemployment began recovering and the growth of private sector jobs has started making up for the loss of public sector. Apart from the positive changes, it was stated that long-term unemployment has not fallen and youth unemployment has slightly increased. What is essential to achieve a noticeable improvement in the job market is sustained economic growth.
It appears that, a decline in unemployment rate has been remaining a permanent change as reported in another, more recently published article from BBC. The figures showed that the unemployment rate further dropped to 7.2% and the number of employed people is 30.15 million (BBC 2014). More importantly, Britain is finally experiencing productivity growth, demonstrated by the 0.4% increase in total hours worked from October to December, which was below the 0.7% rise in national output (Elliott 2014). Dugan (2014) highlights the current number of employed females is over 14 million, which means that more women are working than ever before. The overall employment aggregates more than 30 millions (Pym 2014). What is slowing down unemployment, even though jobs are still being created, is the fact that there are more job seekers (Elliott 2014).
Economou, A., Nikolaou, A. and Theodossiou, I. (2008) ‘Are recessions Harmful to Health After All?: Evidence from the European Union’, Journal of Economic Studies, 35 (5), 368-384.
Lee, E. (1996) ‘Globalisation and Employment’, International Labour Review, 135 (5), 485-498.