Trade union body says official figure of 2.68m hides millions of people not actively seeking work or those ‘underemployed’
The true state of British unemployment is more than double its current level at 6.3 million people, if alternative measures including adults stuck in part-time work are used, according to research published on Tuesday.
The TUC, the umbrella body for UK trade unions, said the total is swelled beyond the official figure of 2.68 million if new categories such as underemployed adults are included. Britain bases its jobless data on a widely used formula that defines an adult as unemployed if they are out of work and have actively sought a new post over the past month.
However, the TUC said incorporating six measures of joblessness that are common in the US would paint the UK job market in a much bleaker light. Those include unemployed people who want work but have not actively sought it for six weeks, who number more than 2.2 million in the UK, and “underemployed” adults who are in part-time work because they cannot find full-time work, who add a further 1.3 million to the unemployment total.
Brendan Barber, the TUC general secretary, said tackling the wider unemployment problem should be the government’s “number one priority”. He said: “Our jobs crisis is not confined to those out of work. Nearly two million people are being forced to take low-paid, insecure, short hours jobs because of the lack of proper full-time employment. This means people are taking home much less pay, which is putting a real strain on family budgets. When ministers say there are plenty of jobs out there, they are ignoring the sheer numbers of people looking for work, as well as the suitability and location of the jobs available.”
Figures for unemployment have proved controversial since the total passed the 1 million mark in 1972.
During the 1980s the Thatcher government was accused of adopting youth training schemes to keep the total from soaring towards 4 million. Later, the Major government and its Labour successors allowed many long-term unemployed to switch to disability benefits.
All countries have faced similar criticism. The US has kept its unemployment rate from straying much above the all important 10% level by excluding the long-term unemployed, while Germany’s extensive youth training and apprenticeship schemes have come under increasing criticism for providing low levels of support to young people with poor school qualifications.
According to the TUC analysis, the UK has experienced a significant rise in the underemployment phenomenon over the past two decades, with the total standing at 1.3 million compared with 802,000 in 1993. The TUC added that “total” unemployment in 1993 using the US measures was 6.1 million.
Tax credits, which top up in-work incomes, have played a major role since they were launched in 2003 in the shift to part-time work, because they allow workers to maintain a large proportion of their full-time wage.
Cuts in tax credits over the next two years are expected to push many middle-income groups on to the official unemployment queues, in order to qualify for housing and other out-of-work benefits.
A spokesperson for the Department for Work and Pensions defended the underemployed total, saying that being in some form of employment was better than having no job at all. “It is important that people are taking those first steps into employment through part-time work or jobs in different sectors as it provides vital experience and skills that employers will look for when the economy and labour market improve.”
The spokesperson added that jobs are available, with about 463,000 vacancies in the economy, though before the 2008 financial crash the number of vacancies was above 900,000.
A report by the Chartered Institute of Personnel and Development found British companies are preparing to lay off even more workers this year as they prepare for a bleak 2012, marred by recession and low consumer confidence.
A huge shake-out from the public sector will add to the government’s preferred International Labour Organisation measure of unemployment, pushing the total to almost 3m.
Official data published this week is expected to show rising unemployment and a jump in the number of people signing on for jobless benefits.
The institute said nervous employers were reluctant to hire against a backdrop of slack demand, obstacles to securing bank loans and worries about skills shortages. Some were cutting their workforces.