Thread by @docrussjackson

#THREAD

A new research report from colleagues at Sheffield Hallam University shows that for the bits of Britain most in need of “levelling up”, full employment is simply a myth.

#CostOfLivingCrisis

shura.shu.ac.uk/30252/1/real-l…

The report - the sixth in a series that has been published every five years since 1997 - reveals the real level of unemployment in Britain by adding in the hidden unemployed – people who are on incapacity benefits but who would be working in a truly full employment economy.

The real unemployment total is around 2.34 million – a million higher than the Govt claims.

Official measures fail to adjust for distortions arising from the operation of the benefits system - how very large numbers of incapacity-related claimants hide substantial unemployment.

There are some 790,000 ‘hidden unemployed’ on incapacity benefits - people who might have been expected to be in work in a genuinely fully employed economy. Fraudulent claims are excluded.

The real level of unemployment is estimated to be broadly the same as in 2017.

In Wales, hidden unemployment is estimated to account for more than half of all unemployment, & in Scotland, the North West, North East & South West hidden unemployment accounts for almost half the total. In London & the South East hidden unemployment accounts for only a fifth.

Hidden unemployment is disproportionately concentrated in the weakest local economies,
particularly Britain’s older industrial areas & a number of seaside towns. In the worst affected places, the estimated real rate of unemployment exceeds 10% of all adults of working age.

By contrast, in substantial parts of southern England outside London the rate is around 2%.

Whilst *some* parts of Britain are now at or close to full employment, the economy as a whole is still some way off and substantial unemployment persists in other parts of the country.

The data shows that in 2022 there are really three
different Britains:

1. FULL EMPLOYMENT BRITAIN (below 4% real unemployment):

• 141 local authorities
• 20 million people
• Average real unemployment 2.8%
• 14% of unemployment ‘hidden’

2. MIDDLING BRITAIN (4-8% real unemployment):

• 158 local authorities
• 31 million people
• Average real unemployment 6%
• 34% of unemployment ‘hidden’

3. HIGH UNEMPLOYMENT BRITAIN (more than 8% real unemployment):

• 64 local authorities
• 14 million people
• Average real unemployment 9.4%
• 42% of unemployment ‘hidden’

#CostOfLivingCrisis #LevellingUp

Steve Fothergill: “While unemployment is clearly down on levels during the pandemic & down on the levels of the 80s/early 90s, the Treasury, the Bank of England & economic commentators should not fool themselves into believing Britain has reached anything like full employment.”

In theory, people living in high unemployment areas should move to areas where there are more jobs, but this doesn’t happen.

There is not going to be much "levelling up" if the economy goes into a tailspin, as those areas with the weakest labour markets will be hit hardest.

Growing the economy would not be enough to narrow the gap between full employment & high unemployment Britain.

Nor is it simply a question of spending billions of pounds on infrastructure projects.

#CostOfLivingCrisis

What’s needed is a combination of macro (regional aid, public investment, state aid, procurement) AND micro (tailored support to re-engage those on incapacity benefits with work).

There's little sign of "levelling up" investment on a scale commensurate with the huge challenge.