Here is How the UK Govt Hid 1 million Jobless From Official Unemployment Figures

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One of the purported achievements of the Coalition government’s disastrous economic policy of austerity, has been the unemployment figures.  Pundits say that at 7.8% (2.51m) they are nothing to shout about but not the disastrous rates seen in states such as Greece (26.9%) or Spain (26.3%). In reality, the unemployment rate is more than double this in many areas, while those in employment are facing ever worsening conditions to retain their non-jobs.

Messing with the Figures

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We have the Thatcher government to thank for the majority of the statistical trickery which currently renders the government released unemployment figures redundant.  Prior to 1979, the unemployment rate was anyone registered as unemployed, this was converted to a percentage of the total workforce and that was the published unemployment rate.  Then some changes came in:

  1. Redefining Unemployment:  originally defined as those ‘registered’ unemployed, changed to only count ‘claimants’ – this obviously reduced the number greatly as many unemployed people do not, for various reasons, claim benefits.
  2. Cutting Benefit Entitlements: By making changes to the benefit system (who is eligible and not) the government can magic away unemployment numbers by simply removing eligibility for benefits.  If the person cannot claim, they are not classed as unemployed.
  3. Training Schemes & Work Programmes: the conservative government of the 80’s began to double count those in training & work programmes.  First, they excluded them from the unemployed figures, then they added them to the total workforce figures – this means that simply by recruiting people into a work programme, the government has reduced the unemployment figures.  Prior to Thatcher, these schemes were not counted as employment.

The Thatcher government was able to show a drop in unemployment of 550,000 in July 1986, and 668,000 in 1989 by transferring those unemployed into work programmes.  They also kept an average 90,000 unemployed under 18 year olds off the books by making them ineligible to claim benefits.

Sadly, none of these changes have since been reversed, giving the UK public a much skewed view of unemployment and underemployment.  If we look at the research prepared by other bodies without such downright deceitful exemptions, we reveal a more realistic picture of the economic woe being meted out across the country.

The Real Unemployment Rate

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A study put together by Sheffield University last year set out to establish the real level of unemployment in the UK, given that there has been little change in the published unemployment statistic, we can suppose they still hold relatively true.  The study found:

  • For Britain as a whole in April 2012, the new figures point to more than 3.4 million unemployed. This compares to just 1.5 million on the claimant count and 2.5 million according to the Labour Force Survey – the government’s two official measures of unemployment. The difference is attributable to extensive hidden unemployment.
  • An estimated 900,000 unemployed have been diverted onto incapacity benefits. These are men and women with health problems who claim incapacity benefits instead of unemployment benefits. They do not represent fraudulent claims.
  • Hidden unemployment is disproportionately concentrated in the weakest local economies, where claimant unemployment is already highest. The effect has been to mask the true scale of labour market disparities between the best and worst parts of the country.
  • In the worst affected districts, the real rate of unemployment is often around 15 per cent. Knowsley in Merseyside tops the list with a real rate of unemployment estimated at 16.8 per cent.
  • The older industrial areas of the Midlands, the North, Scotland and Wales mostly have the highest rates of unemployment. In large parts of the south of England the rate is still only 3-4 per cent.
  • Comparisons with similar data for earlier years shows that Britain was still a long way off full employment before the 2008/9 recession. Full employment is now still further away and the real rate of unemployment is higher than at any time since 1997.
  • The report casts serious doubt on the likely impact of the Coalition government’s reforms, notably the Work Programme and Universal Credit, which are founded on the assumption that unemployment can be brought down by encouraging the unemployed to find work. The evidence points to large and continuing shortfalls in job opportunities away from the most prosperous parts of southern England.

One of the more worrying points in the survey is the widening gap between ‘claimant count’ and unemployed (p5), as ever increasing numbers of people fund themselves without a job or eligibility to claim social security.  For this expanding pool of people, exploitation beckons.

Exploiting the Unemployment Racket

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The government is pressurising people into ever more exploitative work programmes in order to reduce unemployment figures by threatening withdrawal of social security for non-compliance.  In 2011, the Conservative and Liberal Democrat coalition government announced a plan to increase uptake of Workfare (the term given to these schemes) by 100,000.  They also made changes to the programme they inherited from New Labour as follows:

1. A jobseeker who leaves a placement after 1 week loses their welfare payments for 6 weeks.  If they do this a second time, they lose them for 13 weeks.  The third time, three years.

2. Placements can be mandated for up to 30 hours a week for as long as 6 months.

3. The scheme has been opened up so corporations in the private sector can exploit this taxpayer funded, forced labour.

This means that someone who finds themselves unemployed must work up to thirty hours a week, for up to six months at a time, stacking shelves for Tesco or Poundland simply to receive as little as £53 per week, which they are already entitled to as part of the social contract of Britain.  Also, Tesco isn’t paying the £53; we are, through our taxes.

Although an interview is supposed to be guaranteed at the end of the term, it is not required that the workfare provider has a vacancy open.  An interview for a job that doesn’t exist is no interview at all.

Corporations get free labour, the government gets to massage the unemployment figures (Workfare victims are counted as employed) and the unemployed get shafted.

Anyone doubting this critique would do well to read the findings of the DWP’s own analysis of the performance of their work programmes.  These schemes cost the taxpayer £5bn, yet only 1 in 10 people found employment lasting up to 3 months.  The figures are even worse for the sick and disabled people forced into the work programmes – only 1 in 20 finding lasting employment.

The picture doesn’t get any rosier for those who have managed to find employment either.

Employers are less likely to provide real jobs than ever.  As the market favours the employer, there has been an unprecedented month on month fall in wages through the entire 36 months of the Coalition government, and wages were already falling before they arrived.

On top of hidden unemployment, the UK also has an ever growing problem with underemployment; the case of people unable to find jobs with sufficient hours/pay to meet their needs.

A recent paper by researchers at the University of Stirling revealed that underemployment rose from 6.2% in 2008 to 9.9% in 2012. The rate hit 30% among 16 to 24 year olds.

We have also seen the rise of ‘zero hour’ contracts. Almost unheard of a few years ago, more than a million UK workers are now under these contracts.  These contracts have no specified working hours – meaning that an employee is placed on permanent stand by until or unless the employer needs them.  While classed as employed, the person has no wage security as they cannot guarantee their pay from one week to the next.  They also receive no sick pay, leave or other basic terms and conditions.

The Resolution Foundation recently published a review of ‘Zero Hours’ contracts which found serious issues of the spike in their use:

  1. Those on ‘Zero Hours’ contracts earn less than half the average wage (£236 vs. £482 per week) of those on proper contracts.
  2. Workplaces using ‘Zero Hours’ contracts have a higher proportion of staff on low pay(within £1.25 of minimum wage) than those who do not.

These factors have allowed the UK Labour Market in recent years to combine a relatively high level of employment and an unprecedented squeeze on wages.

  1. Those on ‘Zero Hours’ contracts work 10 hours a week less, on average, than those who are not (21hrs – 31hrs).
  2. 18% of those on ‘Zero Hours’ contracts are seeking alternative employment or more hours versus 7% of those in ordinary contracts

These factors have contributed to the rise in underemployment in the UK since 2008.  An ONS survey last year revealed more than 1 million people had been added to the rank of the underemployed since the 2008 bailout of the banks.

  1. ‘Zero Hours’ contracts are hitting young people the hardest, with 37% of those on such contracts aged between 16-24.
  2. ‘Zero Hours’ contracts are more likely to be held by those without a degree, and with a GCSE as their highest level of education.
  3. Non UK Nationals are 15% more likely to be employed on such a contract than UK Nationals.

It is not difficult to see the advantages of ‘Zero Hours’ contracts to employers – they can achieve maximum flexibility of their workforce, effectively retaining them on a pay as you go basis.  It is also clear that in the short term, the government of the day also enjoy the advantage of hiding the true effects of their cut throat economic policies.  But the ordinary human being seeking to meet the rising cost of living is losing on all counts.

Between 2008 and 2012, inflation rose 17% according to the Consumer Price Index, while incomes increased just 7% – this translates to a real terms pay cut of 10% for working people.  But the Consumer Price Index measurement tracks the rising cost of an imaginary list of products and services that the poorest workers are unlikely to ever buy.  The UK Essentials Index however tracks inflation of the bare essentials that would the poorest would buy – and these have risen by an eye watering 33% during the same period.  This means that not only is the impact of unemployment hitting the country disproportionately, but underemployment and exploitative employment conditions are too – with the poorest being the worst affected.

Economic Recovery? For Who?

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There was a piece on the Guardian this morning talking about the triple boost to the UK economy of increased factory output, house prices and car sales, and trumpeting this as a sign of economic recovery.

But what is the point of this increased GDP if it is won at the expense of people wages and livelihoods?  Surely, if the inequality in the UK between rich and poor is growing, unemployment is rising, underemployment is rising and wages are falling – this is a recession.  It speaks volumes for the broken economic measures of growth at play here that a real world recession for the majority, is applauded as a recovery, when all that is recovered are the profits for transnational corporations and incomes of high earners, most of whom pay little or no contributions in tax.

Get Involved

Boycott Workfare – get involved in the campaign to outlaw workfare

UKUncut – get involved in demanding proper tax contributions from those corporations benefitting from these nightmare employment schemes.

DPAC – Disabled People Against Cuts do extraordinary work highlighting the state’s assault on disabled people.  Please support them

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38 thoughts on “Here is How the UK Govt Hid 1 million Jobless From Official Unemployment Figures

  1. Changes in education policy have helped to ‘massage’ unemployment figures too. Now nobody under 19 will count as they are all required to stay on at school /college.

  2. Experienced this first hand: I worked as a NVQ Tutor from 2004 – 2007. Delivering a NVQ 2 to the unemployed so they could work in the courier industry as riders/drivers. They were paid their full benefit + travel and if they completed the course we helped them get a job + approx £200 towards a push bike or motorcycle clothing/crash helmets. You knew that about 70 – 80% were there because otherwise their benefits would be stopped, so they would either work a few weeks & then re apply for benefits, or drop out towards the end. But, all the while they were on the course they were not technically unemployed, so it was good for the government (lying bastards) figures. The guy running it was making a fortune, claiming for anything he could. Their hours of attendance were falsified, so, on paper, they were always there for the maximum amount of time, ensuring the maximum amount of money was claimable by the company I worked for. When the NVQ side stopped ( don’t really know why ) we started delivering a literacy & numeracy programme where we had to forge the signatures of candidates to make up the numbers so the maximum amount of money was claimed. In the end it came under police investigation, but I had resigned before hand as I didn’t anymore to do with it.

      • not necessarily, many centres do this. Look for the ones that boast 100% pass rates (if they couldn’t do the homework, the tutor was required to do it for them) One of the reasons I got out of the industry was the increasing pressure to commit fraud.

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  4. Truly excellent article! I’ve got a degree in economics and I assure you that this article is more accurate than any other mainstream media junk. I hope to see you all at ‘Occupy the BBC’ march on 16 Nov in London//Salford and other places. )

    //Facebook Group: I STAND BY YOU

    • You trumpet that you have a degree in economics as though that gives you some authority to judge the article.
      It does not.
      A degree in economics is as worthless as chocolate teapot.
      Why? Because there are no wrong or right answers in economics. There is your view and the view of the person who disagrees with you but who also has a degree in economics.

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  16. You are forgetting all the students off to uni!!!

    They will not be counted in those figures………..great trick making it universally acceptable to go to uni ………….takes allot of the figures.

    Just my 2cents

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  18. How can anyone have the time to even look for a decent job when they’re working too hard for just their welfare benefits, and the corporations don’t even have to pay them? what a horrible thing to do to keep people poor!

  19. It seems some of these articles are being done as space fillers and to justify “extensive research”.

    Firstly the official DWP claimant count is 2.51 million not the 1.5 million stated in the article. Only 1.5 million are eligible for benefits. Secondly it makes sense that those on incapacity or sickness are not included in jobless figures as they are not actively seeking work, in reality a good many may be absent from their workplace during this period of sickness or disability.

    The area of concern is the use of the “economically inactive” group or more specifically those the government say are not looking for work.This group comprises everyone from 16 to 64 i.e those of working age.

    As of May 2013 (last figures I looked at) there were 8.9 million of these people. These will be people who cannot for various reasons, or do not want to, look for work. Students, early retired, Single parents with young children, those with working partners who can manage etc. This group does not include unregistered immigrants of whom there may be up to a million.

    However we know a lot of students look for part time work, some early retired look for part time work, some stay at home partners look for part time work, even some retired look for part time work and they are not even in this group.

    The “economically inactive group” saw a 132,000 drop to Mar 2013 not all explained by people retiring, and unemployment rose.One can only conclude that a lot of “economically inactive” are in fact actively seeking work.

    If we take the official unemployed figures and no of jobs available 1 job 5 people then even allowing for only 100,000 of those people suddenly going out and finding work we have another 500,000 unemployed.

    However given the current economic climate it is a fair bet that a good proportion of those early retired, students, non working partners etc. are now actively seeking work.

    The true unemployment figure could be as high as 10 million or as low as 2.5 million depending on who’s figures you decode.

  20. you mention the DPAC and cuts , I know 2 people who are classed as disabled , who live a lot better than me , they tour across Europe in there £53000 camper van , get a car every 3 years , they even went for a New year celebration meal at local pub that cost £156 for 2 people , I couldn’t afford to go , there main disability is being overweight , and when I visit my doctor and she says to me your slightly overweight , I just say I wish I was heavier , I wrote a letter to the Severn bridge crossing , which are Toll operated , and asked them why people like my friends who receive more money than me go across for free , yet I just receiving a standard old age pension have to pay

    • are you there specialist? do you know their medicle history and why they might be obese? are they on steroids for instance? i am….do you think its easy to get dLA? i was 14 yrs nearly died 4 times but to look at me you would think im picture of health..i rather work than have needled in my arms vomit every night and have bowel incontinence for 22 yr..have tubes up my arse down my nose and side effects of posion meds that have led to mood swings depression low self worth and then we get that..they shouldnt have a life? what you recommend they just sit in a corner and die? i worked i paid tax i laid dead bodies out for aa living cleaned shit up 14 hours a day to have to listen to comments like yours every day !!!!!!!!!!!!

    • You may know 2 people who may be classed as disabled (whose classified them, are they Registered, etc.). You assume they are on welfare benefits as opposed to say having won the Lottery and that their main disability is being overweight – how do you know this!? I’m overweight but don’t regard it as a disability! Perhaps they have a heart condition or diabetes or something else you aren’t aware of or they haven’t told you about?
      One can only feel sympathy for you Joseph and I wish you much good luck in your retirement. You may qualify for Council Tax Rebate and maybe other benefits yourself?

  21. Around another 100k are removed from the unemployment figures every month by sanctioning them. Those sanctioned are not included on the figures.

    • Hi budgie, very interested in numbers of people on “sanctions” not only is a very sick way for the tories to manipulate the stats, by not counting those it has found a reason to suspend their benefits.
      Its also a real threat to everyone having to claim. i understand, for example, that when claimants have an interview at job centre plus they have to be ready for interview at 2 hrs notice. So claimants have to be “presentable” dressed smartly etc or the benefits advisor can impose a “sanction” on them.
      also if you are more than 20 minutes late a suspension of benefits can be made.When universal credit comes in you can be sanctioned for not submitting an on line job search record every week.
      I work with homeless people, some of whom have been rough sleeping. Really what chance do they have of not being sanctioned. If you have support issues you may well miss an appointment, you may not be smartly dressed and you may not have internet access or the IT skills to register your weekly on line job search.
      I think 100,000 suspended from benefits on the day of the unemployed count may be a conservative one. Certainly it is a statistic that doesn’t give justice to the suffering it causes. If it is about 100, 000 then it will certainly rise under the tories welfare reform. In deed it must be seen as the tories intent to save on the benefits bill by making the most vulnerable or less able destitute by cutting them off from benefits.

  22. we been so banbosiled by their talk of that if ones old enough that back in the sitxties when you had a lot more who could claim unemployment ,but over the years they say this group nah no claim whot about part timers no claim the list should be around 5million unemployed but they have cut these down from then nah never have I seen a government without remorse and tell lies daily jeff3

  23. I don’t understand the point about 900,000 being ‘diverted’ onto IB(which no one gets anymore). It’s been increasingly difficult to get sickness benefit since the introduction of incapacity benefit in 1995.
    Successive governments have been doing all they can to get people off IB, and now ESA.

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  25. The e-petition linked in above has been rejected as there is supposedly already another petition covering the same subject. Does anyone know the title of the other e-petition as I am unable to find it.

      • There are three. All with the same reason for rejection but I still cannot find an open one. I’d hate to think that they were trying to stop us petitioning on this! They usually just allow the petition then ignore it like the NHS one.

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