Unemployment hits young and older workers the hardest

An analysis of UK unemployment figures released in November 2008, undertaken by the Trades Union Congress, shows that unemployment among young workers and older workers is rising sharply. Amid fears among the social partners that the labour market will continue to deteriorate in the current difficult economic climate, the UK government is focusing on promoting active labour market measures.

The Trades Union Congress (TUC) released an analysis of UK unemployment figures on 12 November 2008. Overall, it noted that the national unemployment rate was 5.8% at the end of September 2008, which represented a 0.4% increase on a quarterly basis and an 11.1% increase on a year-on-year basis. Nevertheless, the national employment rate is calculated to be 74.4%, which is above the European Union’s target of an overall employment rate of 70%.

Long-term unemployment is giving the most cause for concern in the UK, with the September 2008 figures showing that the quarterly increase in the number of workers who are unemployed for up to six months was 11.2%. The quarterly increase in the number of workers unemployed for between six and 12 months was 3.1% and this increase was 4.6% for those who have been unemployed for over 24 months.

Sharp rise in long-term unemployment among young workers

The long-term unemployment rate among young people aged between 18 and 24 years is rising most steeply: a 12.8% increase was found in the number of young people unemployed for up to six months, and a 6% increase in the number of young people unemployed for between six and 12 months. No significant increase has been noted so far in the number of young people unemployed for over 12 months, but the TUC believes that this figure may also rise.

One of the focal points of UK employment policy is currently on young people under the age of 25 years who are ‘not in education, employment or training’ (the so-called NEETs). The latest unemployment figures show an increase of 0.8% in the number of NEETs, compared with the previous quarter.

More older workers unemployed

Furthermore, a significant increase has been recorded in the long-term unemployment rate among older workers: the number of workers aged over 50 years who are unemployed for between six and 12 months has increased by 29.7% over the past quarter. However, a 4.5% decrease in unemployment of more than 12 months was reported among those aged over 50 years, which the TUC believes could indicate that older workers are choosing to leave the labour market rather than try to find other work.

Policy initiatives

It is expected that the situation is likely to deteriorate in the coming months, as the number of job vacancies is reported to be falling by 6.3% on a quarterly basis. In addition, a 22.6% quarterly increase has been recorded in the number of redundancies.

The UK government has reacted to rising levels of unemployment by increasing its funding for initiatives aiming to help unemployed people to find work. One example of such initiatives is Jobcentre Plus, which is a government-funded scheme that offers individual jobseekers one-to-one support and training tailored to their needs. The initiative also involves employers in helping to place unemployed people, through local employment partnerships, guaranteed interview schemes and work trials.

The government announced in October 2008 that an extra GBP 100 million (€112.5 million as at 11 December 2008) would be made available over three years to help people using the Jobcentre Plus scheme. This funding will help them to retrain and develop their skills in order to enhance their chances of finding employment; it will be provided by the European Social Fund and the UK Department for Innovation, Universities and Skills (DIUS).

Reaction of social partners

Commenting on the unemployment figures, TUC General Secretary Brendan Barber warned:

These are dire figures. High unemployment is going to be with us for some time now. It is not just an economic problem, but a social problem too. The rise in long-term youth unemployment is particularly worrying. We welcome the government’s decision to boost funding for Jobcentre Plus rapid response units, but more needs to be done to help the unemployed. There is a strong case for increasing benefits as part of a wider stimulus to the economy.

The Deputy Director-General of the Confederation of British Industry (CBI), John Cridland, stated:

With the downturn now hitting every sector of the economy, job losses are an unwelcome but inevitable consequence of these difficult times … It is clear that the human cost of this downturn will unfortunately be higher than initially expected, with unemployment continuing to rise through the coming months.

Andrea Broughton, Institute for Employment Studies

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment