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Unemployment higher than at any point during recession as private sector recovery stalls

14 December 2011

Commenting on today’s labour market statistics, Andrew Sissons, researcher at The Work Foundation, said:
“The labour market is on a dangerous trajectory, as today’s numbers confirm that our private sector recovery has stalled.  Between June and September private businesses struggled to create just 5,000 new jobs while the public sector shed 67,000 workers over the same period. The economy shed 252,000 employee jobs in three months, leaving unemployment higher now than at any point during the recession. Businesses are suffering from an acute lack of confidence, which makes it very hard for them to create jobs. The Eurozone crisis also makes it impossible for companies to plan for the long-term, while consumers at home appear to be cutting back their spending.
“Most worrying is the prospect of unemployment remaining high for years to come. The OBR’s forecast suggests that unemployment will not start to fall significantly until 2014, which means that whatever rate of unemployment we reach over the coming months is likely to persist for several years to come.
“Persistently high unemployment will worsen the already serious problem of long-term unemployment. 868,000 people have been out of work for 12 months or more, and this number is almost certain to rise. Almost half of people trapped in long-term unemployment are either under 24 or over 50, and these groups will find it especially hard to get back into work.
“Unemployment will only stop rising when businesses regain their confidence. That will either require a rapid resolution to the Eurozone crisis, or a decisive signal from government that it is committed to boosting growth in the long-term. The government has made some important steps in this direction over the last month, but it must continue to pursue its growth agenda relentlessly.”
Notes to editors

  • Unemployment increased by 128,000 in the three months to October, while employment fell by 63,000. There are 259,000 people aged 16 – 24 who have been unemployed for 12 months or more, and 170,000 people over-50 in long-term unemployment.
  • The number of employees – people who are employed by a company that is not their own – fell by 252,000 in the three months to October. However, this was partially compensated for by a rise of 166,000 in self-employment, and 24,000 extra unpaid family workers, meaning that overall employment only fell by 63,000.
  • Andrew Sissons and Charles Levy are available for interviews, briefings and written comment.
  • The Work Foundation is the leading independent authority on work and its future. It aims to improve the quality of working life and the effectiveness of organisations by equipping leaders, policymakers and opinion-formers with evidence, advice, new thinking and networks. In October 2010, Lancaster University acquired The Work Foundation, forming a new alliance that enables both organisations to further enhance their impact. 
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