Labour market data: Fastest rise in unemployment since 1947, with the areas with the poorest areas worst hit
19 May 2020
Analysis of this morning’s labour market data by the Institute for Employment Studies (IES) has found that last month saw the fastest rise in claimant unemployment since the claimant count started in 1971. Looking further back, the great winter of February 1947 is the only time that there has been a faster monthly rise in any measure of unemployment.
Today’s figures show that claimant unemployment, which measures the number of people claiming benefits principally for the reason of being unemployed, rose to 2.1 million from 1.2 million between March and April 2020 – an increase of 860 thousand or 69%.
More detailed analysis by the IES of changes to regional and local council levels shows that unemployment has risen fastest in those areas that were already worst off. The local areas with the worst unemployment before the crisis saw an increase in their unemployment rates that was 80% greater than areas with the lowest unemployment.
In Blackpool, one in nine residents (11%) are now claimant unemployed, up from 7% in March. One in eleven residents are claimant unemployed in Middlesbrough, South Tyneside, Birmingham, Wolverhampton and Thanet.
Claimant unemployment has increased fastest in the North West (up by 3.1 percentage points), the North East (3.0) and Northern Ireland (2.9). It has increased least in the South East and the East of England (both up by 2.1%).
Looking at changes by age group, around two thirds (62%) of the rise has been among people aged 25 to 49. Young people have accounted for one in six (17%) of the increase in claimants, while those over 50 have accounted for just over one in five (22%). This latter figure is particularly concerning, as older people are much less likely to leave unemployment and get back to work than younger people.
Commenting on the figures Tony Wilson, Director of the Institute for Employment Studies, said:
“These figures give us the first official confirmation of what we’ve known for some time, which is that unemployment is rising faster now than at any point in our lifetimes. But they also paint a deeply worrying picture about how the crisis is playing out across the country – with clear evidence now emerging that those areas that were worst off before the crisis have seen the biggest rises in unemployment. If anything, today’s data underplays the depth of the crisis that we’re in, as it only counts those who had successfully claimed benefits for unemployment as at 9 April, so excluding many young unemployed and more recent claimants. In reality, unemployment today is likely to already be close to three million.
“So having averted a disaster through the Job Retention Scheme, we now need the same urgency to support the millions now out of work or facing unemployment. We need to act now to support people to prepare for the recovery when it comes, and we need to put in place measures to deal with the large rise in longer-term unemployment that we’re going to see later in the year – including through a jobs or training guarantee for all young people facing long-term unemployment.”