Rising unemployment is a worrying sign for the UK economy | economics

The government has taken credit for driving low unemployment in recent years, but there are worrying trends beneath the latest headline figures.

The first of the worrying signs is the increasing number of working-age people who are forced to leave the labor market and take on caregiving responsibilities or take early retirement due to health problems.

In February, the economic inactivity rate for people aged 16 to 64 in the UK was 22.2%, an increase of about 275,000 from a year ago.

In 2022, there was optimism that the sharp rise in inactivity rates during the three COVID-19 lockdowns was rapidly easing and the job market was returning to normal.

People who have contracted Covid and its long-term effects are finding their way back to work, and early retirement, which had been particularly popular among the over-55s, is losing its appeal.

The trend was reversed last year, leaving ministers scratching their heads over the cause.

Employment experts have no doubt that the government's battle with NHS unions and delays in clearing waiting lists have played a big role. Benefit cuts that reduced payments to people with disabilities and mental health services in crisis were also factors.

Then the cost of child care rose and the cost of residential care for the elderly and disabled increased, forcing many families to accept that their paid work hours would be reduced and step into the breach.

Tony Wilson, director of the Institute for Employment Studies, said many criticized the government's lackluster efforts to improve mental health support and its slow response to the growing number of school leavers out of education, training or work. I was one of the people.

The number of apprenticeship places for young people is low, despite childcare providers struggling to recruit staff.

Charlie McCurdy, economist at the Resolution Foundation, said rising layoffs and falling job levels are signs of an economic downturn, while rising inactivity and long-term illnesses suggest a bigger problem for workers' health. said.

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He said: Addressing rising inactivity and its impact on public finances, welfare systems and the wider health and wellbeing of people is among the biggest economic challenges facing this Government and whoever wins the next election. It's one.

Ministers can console themselves with the fact that the immediate costs of a weak labor market are low. The number of claimants in March was 1,583,000, an increase of 10,900 from the previous month and 57,400 from the same period last year.

By this criterion, the unemployment rate was considered resilient. Ultimately, considering the long-term economic downturn that culminated in a recession in the second half of 2023, the number of applicants for unemployment benefits was relatively small.

However, the fact that the number of employed people decreased by 156,000 from the last quarter to the end of February compared to the previous quarter shows even more clearly that the situation is not good.

Loss of economic growth, greater costs to society as people give up their jobs to care for loved ones and their health deteriorates, and the situation is worse than it seems at first glance.

Sources 1/ https://Google.com/ 2/ https://www.theguardian.com/business/2024/apr/16/uk-unemployment-inactivity-ill-health The mention sources can contact us to remove/changing this article

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