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The Wider Employment Implications of this Recession

 

Despite official figures showing that the UK economy is growing again, the CIPD has found the impact of the recession on the UK workforce has been much deeper
than the headline employment and unemployment figures indicate.

 

•  According to the CIPD, 1.31 million people were made redundant during the recession - double the net fall in employment and equivalent to 4.4% of people in work before the downturn.

•  It also reports there were 6.2 million fresh claims for Jobseekers Allowance between April 2008 and November 2009 - 7.5 times the rise in the unemployment claimant count during the recession, highlighting the degree to which many people are struggling to find permanent jobs.

•  Two thirds of people made redundant during the recession who subsequently found work were paid less in their new job. The average pay penalty was 28%.

•  One of the main long-term consequences of job loss among men has been to push more women out of the labour market and on to incapacity benefits.

 

According to academics at Sheffield Hallam and Dundee universities, Britain has 2.6 million incapacity claimants of working age. Nearly 1.1 million of these are women, and among under-60s the number of women claiming incapacity benefits almost equals the number of men.

The report, Women on Incapacity Benefits, shows how these women are concentrated in exactly the same places as men on incapacity benefits, above all in Britain's older industrial areas where incapacity benefits are often claimed by more than one in 10 of all women between the ages of 16 and 59.

The researchers found that the men and women who claim incapacity benefits come from the same segment of the labour market. Around 60% have no formal qualifications, and claimants' previous work experience is overwhelmingly in low-grade manual jobs.
And, according to the researchers, these are the men and women who find it hardest to keep a foothold in a difficult labour market.

Ill health or disability is more or less universal among incapacity claimants - indeed, it is a condition of benefit receipt - but the researchers found only a minority say that they would be unable to do any kind of work in any circumstances. This points towards substantial ‘hidden unemployment'.

This is likely to have a much greater impact on perceptions of job security and consumer confidence during the recovery than the simple ‘unemployment situation is better than feared' story of the moment would suggest and suggests continuing challenges in delivery the government’s welfare to work agenda and the targets of the WNF.  
 

 

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