The real level of unemployment 2017

Key Points - This report challenges the view that the UK economy is operating at or close to full employment. It presents alternative estimates of the level of unemployment, based on a re-working of official statistics, for every local authority district in England, Scotland and Wales. - The report estimates that in 2017 the ‘real level of unemployment’ across Britain as a whole is nearly 2.3 million. This compares with just under 800,000 on the claimant count and 1.5 million on the wider ILO measure of unemployment preferred by the government. - The report estimates that there are some 760,000 ‘hidden unemployed’ on incapacity-related benefits (these days primarily Employment and Support Allowance). These are men and women who might have been expected to be in work in a genuinely fully employed economy. They do not represent fraudulent claims. - The real level of unemployment and the scale of hidden unemployment have both fallen since 2012. However, there remain almost as many unemployed ‘hidden’ on incapacity benefits as ‘visible’ on the unemployment claimant count. - Hidden unemployment is disproportionately concentrated in the weakest local economies, particularly Britain’s older industrial areas and a number of seaside towns. The effect is to mask the true scale of labour market disparities between the best and worst parts of the country. - In a number of local economies, including much of North East England, East Lancashire, Merseyside, the Welsh Valleys and the Birmingham and Glasgow areas, the real level of unemployment remains at or just below 10 per cent of the working age population. Much of southern and eastern England outside London, with real unemployment in the 2-3 per cent range, could however lay claim to operating near full employment.