Unemployment is disproportionately hitting young people and older workers but official jobless figures appear to indicate that the situation is only set to get worse.
Figures from the Office for National Statistics released yesterday seemed to be encouraging on the surface, with the number of unemployed falling by 49,000 to 2.46 million in the three months to June – the biggest drop in three years.
The number of people in jobs also increased by 184,000, the largest quarterly rise since 1989, although the number claiming unemployment benefit fell by a lower than expected 3,800 in July to 1.46 million.
But the increases in employment were mainly attributed to an 115,000 jump in the number of part-time workers, taking the total to 7.84 million, the highest since records began in 1992. Average pay increase rates also slowed to 1.3%
Gerwyn Davies, public policy advisor at the Chartered Institute of Personnel and Development, said: “This looks like yet another set of strong and encouraging figures on the surface. However, cracks now seem to be emerging, with a considerable growth in part-time work, lower pay settlements and a slower decline in the claimant count all features of a more uncertain jobs market.”
The strong progress seen in the first half of the year was now “set to stall” thanks to a “series of headwinds” that were about to hit the jobs market,” he added.
“A larger crack will emerge when the real impact of the cuts on the public sector take effect in the autumn, with a question mark hanging over the capacity of the private sector to fill it,” Davies said.
Public sector cuts were likely to hit women hardest as they made up a disproportionately large chunk of the public sector workforce, he added.
Other demographics that are bearing the brunt of unemployment already are young people and older workers. A report by the International Labour Organisation, published today, revealed that global youth unemployment rates stood at 13%, up from 11.9% just before the global downturn in 2007.
But in the last quarter of 2009, the number of 15 to 24 year olds in the UK who would like to work but are not looking for jobs hit 23.7%, the highest of the four countries – Germany, Spain and Estonia – that were analysed.
Sara Elder, the report author told the Daily Telegraph: “In the UK, there is a distinct danger that young people will detach themselves from the labour market altogether. They would like to work but know that no work is out there so they simply don’t bother to find jobs.”
Such a situation would lead to a “lost generation” of people who were shut out from the labour market because the last two years’ worth of graduates were likely to be usurped by employers going for new leavers from colleges and universities when they started hiring again, she added.
The findings were backed up by union umbrella organisation the TUC. Its research found that the number of 18 to 24 year olds claiming JobSeekers Allowance (JSA) for more than six months had increased by 21% over the last year to reach 103,230 in June.
But the number of young people claiming JSA represented less than a third of the jobless total, which hit 338,000 between March and May 2010. This meant that the youth unemployment rate was over 17% or more than twice the national average.
Things were little better for older workers, however. Charity Age UK indicated that the number of over 50s trapped in long-term unemployment had risen by 52% over the last year to hit a 10 year high of 170,000. The number had also risen by a further 18.6% over the last quarter – the highest percentage increase among all age groups.
But the charity pointed out that the situation was only likely to get worse as 750,000 older workers were soon to be re-categorised as unemployed following the coalition government decision to remove their incapacity benefits as a result of cost-cutting measures.
