9.2 Million People In The UK Are Not Working Or Looking For A Job

According to official figures, more than a fifth of adults in the UK are not actively looking for work. The economic inactivity rate in the country was 21.8% between November and January, slightly higher than the previous year.

This means that 9.2 million people aged between 16 and 64 in the UK are neither employed nor seeking employment. The total number is over 700,000 higher than before the onset of the coronavirus pandemic, raising concerns about worker shortages and their impact on the UK economy.

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The state of the UK economy has become a focal point, especially with a general election and major political parties promising to boost growth.

Although the UK entered a recession at the end of last year, with the economy contracting for two consecutive three-month periods, the latest official statistics indicate that unemployment levels have remained steady.

However, wage growth has slowed, although it still outpaces inflation. The number of people not employed or actively seeking employment has remained persistently high in recent years, particularly since the pandemic’s start.

The Office for National Statistics (ONS) cites long-term illness as the main reason for about a third of the working-age population being economically inactive.

Other groups classified as economically inactive by the ONS include students, individuals caring for family or a home, people with disabilities, early retirees and discouraged workers.

Notably, more women tend to fall into the economically inactive category than men. The latest figures from the ONS indicate that the number of people inactive due to illness has decreased in recent months but remains higher than estimates from a year ago.

Additionally, there has been an increase in economically inactive individuals aged 16 to 34, while the number of those aged 35 to 64 has decreased.

A recent report suggests that individuals in their early 20s are more likely to be out of work due to ill health compared to those in their early 40s, with cases of poor mental health believed to be on the rise.

Recognizing the impact of workforce shortages, Chancellor Jeremy Hunt has introduced a series of measures aimed at encouraging people to find work or increase their working hours.

These policies include reducing the starting rate for National Insurance Contributions and extending free childcare services for working parents. However, business groups argue that more needs to be done to address the long-term weak economic growth in the UK.

Neil Carberry, chief executive of the Recruitment and Employment Confederation, believes that reducing NI rates is a step in the right direction but not a “silver bullet” for encouraging enough people to work.

He suggests that the government should also focus on improving childcare, and transportation, and addressing NHS waiting lists.

Alexandra Hall-Chen, principal policy adviser for employment at the Institute of Directors, emphasizes the importance of tackling skills shortages and increasing labour force participation in the UK’s growth plan.

Chris Bingham, CEO of energy supplier Greenarc Ltd, highlights the need for businesses to understand how to attract and engage employees, particularly younger individuals.

He suggests that there is a disconnect between employers and young employees, and future governments should prioritize apprenticeships and workplace engagement rather than solely focusing on the university route.

Work and Pensions Secretary Mel Stride asserts that the UK has a “very healthy” labour market, and the government is actively working to reduce economic inactivity.

While the Office for Budget Responsibility (OBR) estimates that certain policies, such as childcare expansion and welfare reform, will increase the UK’s labour supply by over 300,000, the OBR also notes that freezing personal tax thresholds may dampen work incentives, resulting in a smaller increase of around 200,000.

Liz Kendall, Labour’s shadow work and pensions secretary, criticizes the Conservative government for allowing millions of people to be “locked out of work” due to long-term sickness. She proposes cutting NHS waiting lists as part of a plan to increase employment rates.