More evidence that the true rate of unemployment in the UK is 3 times greater than the government's preferred statistics suggest

pulse

August 30, 2017 3:00 PM

The household number gives a more nuanced picture of the true rate of unemployment in Britain, and how worklessness is distributed throughout the nation.

The percentage is three times bigger than the rate of unemployment most-used by the government, economists and the media.

The household number is interesting because it adds detail to the picture of the true rate of unemployment in Britain, and how worklessness is distributed.

The "headline" . That's technically below the level of full employment (6.5%) that most economists use as a rule of thumb.

Yet, as the ONS makes clear, that 4.5% number doesn't count part-time workers who want full-time jobs, "inactive" workers alienated from the workforce, people who retire, students, or those who work in the home.

Once you wrap all those people in, the number of jobless people is actually 21.5% of the entire workforce, according to the ONS. That's one in every five workers, or four times the government's preferred definition of unemployed. This chart from Pantheon Macroeconomics shows that the total rate of unemployed workers, inactive workers who want jobs, and people stuck in part-time jobs who want full-time work, is also about 14.5%, roughly the same as the ONS's household rate:

If you were to assume that the 4.5% of workers who are unemployed were evenly distributed throughout households in Britain, then almost 100% of households would contain adults who were gainfully employed. That would imply that almost all households probably had their heads above water.

But that's not the case.

As the ONS number shows, unemployment is concentrated in one in seven of all households, where 14.5% have no people in them who have jobs. These are "households where no-one aged 16 or over is in employment," the ONS says. "These [household] members may be unemployed or economically inactive. Economically inactive members may be unavailable to work because of family commitments, retirement or study, or unable to work through sickness or disability. Here are the ONS's topline data on household worklessness:

And the boxes:

The good news is that worklessness is much improved from 11 years ago, when nearly 21% of households were jobless.

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