Record-low unemployment figures hide UK's hidden army of the economically inactive

What is economic inactivity?

Economic inactivity is when someone aged 16 or over is not at work or looking for a job. This means they are not part of the workforce and are thus not included in the unemployment figures.

While the British Government's unemployment rates have been at record lows, this does not account for those who are economically inactive but want to return to work.

These individuals form a hidden army of more than three million unemployed working-aged people in the UK.

How many people are economically inactive in the UK?

The British Government reported in 2019 there were 3.3 million working-age people were economically inactive in the UK. This figure is a significant rise from the 2.9 million recorded in 2011 and is particularly concerning given the historically low unemployment rates reported by the ONS.

Various factors can lead to economic inactivity, including a lack of education, training or qualifications; health issues; family commitments or caring responsibilities; long-term unemployment; and geographical mobility issues. 

The UK government has introduced initiatives, such as the ‘Back to Work’ schemes, to provide support and opportunities for people who are economically inactive to help them return to the workplace. 

What are the reasons for economic inactivity?

The British Government has identified several reasons why people are considered economically inactive. These range from having retired to taking on caring responsibilities or being unable to find suitable employment due to their qualifications or location.

The UK’s unemployment rate has been at its lowest since 1974, yet the number of working-aged people who are economically inactive continues to rise. This suggests that the current unemployment figures are masking the accurate picture of people who cannot return to work. 

Unemployment rates do not necessarily reflect the number of people who are unable to work because they lack the necessary skills, have a disability, or are living in an area with limited job opportunities. These types of people are increasingly becoming part of the economically inactive population.

The British Government needs to take steps to reduce the number of people who are involuntarily economically inactive.

This can be achieved by offering more significant support for those looking for employment and providing better access to training and education opportunities.

Additionally, employers need to be encouraged to provide flexible working hours and remote working opportunities that could help more people access employment.

What are the consequences of economic inactivity?

The consequences of economic inactivity are far-reaching and significant. The British Government has had to increase spending to combat the growing trend of economic inactivity. This money is used to support those who have become unemployed due to reduced working hours or the closure of businesses. This increased spending puts a strain on public finances, which in turn affects tax revenue and other essential services. 

The rate of unemployment can also be affected by economic inactivity. When people become economically inactive, they often do not register as unemployed and therefore are not included in official unemployment figures. This can lead to a false impression that unemployment rates are low when they are significantly higher than reported. 

The working-age population is particularly impacted by economic inactivity. Those who become involuntarily economically inactive may struggle to get back into work and face the prospect of long-term unemployment. This can have a negative impact on their mental and physical health as well as their financial situation. It can also lead to feelings of alienation and despair.

Ultimately, reducing economic inactivity is essential for economic growth. The British Government must focus its efforts on getting people back to work and helping those unable to find employment remain economically active. This will help to ensure that unemployment figures remain low and that people who need it most have access to the support they need.

How can we reduce economic inactivity?

Reducing economic inactivity is a key goal for the British Government, as it directly impacts unemployment rates. To achieve this, the government should provide more significant support and incentives for people of working age who are economically inactive to get back to work. 

The UK’s job market has changed significantly in recent years, with technology and automation replacing many traditional jobs. Therefore, people may require retraining or upskilling to return to the workforce. The government could provide these kinds of opportunities, such as funding vocational courses or setting up mentorship schemes, so that unemployed people can access the right kind of training and resources.

In addition, the government could implement measures to encourage employers to hire economically inactive people, such as offering tax incentives or financial subsidies. This would not only help to reduce unemployment figures but also provide an opportunity for people to gain valuable experience and skills.

Ultimately, reducing economic inactivity is a complex issue, but one which must be addressed in order to improve the UK’s overall employment rate. With the right policies in place, we can ensure that everyone has access to the opportunities they need to find meaningful work as provided by businesses such as redwigwam.