The UK labour market remains in an “extremely fragile state”, with the unemployment situation likely to get worse before it gets better, an expert has warned.
Figures released by the Office of National Statistics showed that total unemployment fell for a second consecutive month, albeit by a meagre 3,000 people, for the three months to December, bringing the jobless total to 2.46 million or 7.8% of the workforce.
But the number of people in some kind of employment fell by 12,000, while those in full-time work plummeted by 37,000. Numbers of part-time staff jumped by 25,000, with just over a million people finding themselves unable to get a full-time job – the highest figure since such records began in 1992.
There was likewise a rise of 70,000 in the number of workers in temporary employment, bringing the total to 1.434 million, while the number of economically inactive people jumped by 72,000, due mainly to an increase in the number of students looking to education to avoid the dole.
Moreover, although analysts expected the number of people claiming Jobseeker’s Allowance to fall by about 10,000, the figure actually rose by 23,500 to 1.64 million in January despite falls in the previous quarter. This amounted to the biggest jump since July last year, putting the claimant count at the highest levels since April 1997.
This situation suggests that recruitment activity dropped at the start of this year and that people are still not in a position to put unemployment behind them.
John Philpott, chief economic advisor at the Chartered Institute of Personnel and Development, said: “Today’s employment and unemployment figures confirm that the UK jobs market is still in an extremely fragile state. New official estimates of ‘underemployment’ also show that the pain of the recession is much deeper than headline numbers indicate.”
Other ONS figures released earlier this week indicated that 2.8 million people were officially “underemployed” – or working less hours than they would like – between July and September last year, a sharp jump from the 2.1 million in the same period two years ago.
But with weak economic recovery expected to result in further jobs losses, particularly in the public sector, over coming months, Philpott added that it was “highly likely that the unemployment situation will get worse before it starts to get significantly better”.
Charities Age Concern and Help the Aged, which are in the process of merging and will be known as Age UK from Spring this year, said that workers aged 50 plus had been disproportionately hit, however.
While official unemployment rates had fallen slightly for other age groups, it had risen by 5.7% for older staff. This category had also seen the highest percentage increase in long-term unemployment at 11%, with more than a third of the additional 37,000 people that had not worked for twelve months being over 50.
Michelle Mitchell, the charity’s director, said: “Previous recessions left a legacy of unemployment among older workers and now there are worrying signs that this pattern could be repeated. Research shows that, once out of work, it is much harder for the over 50s to find a job again.”
As a result, she called on the government to provide intensive support for this age group within three or four months of losing their job in order “to prevent them being shut out of the workforce for good”.
