- 14.5% of UK households are “workless,” according to the ONS. That’s three times as high as the headline unemployment rate, 4.5%. The distribution shows that the official unemployment number partially disguises the true distribution of unemployment and worklessness in the UK.
- (Photo by Matt Cardy/Getty Images)
LONDON – Three million UK households – 14.5% of all British homes – are “workless,” according to the Office for National Statistics.
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” rate of unemployment among people available and looking for work is at a record low, just 4.5%. 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:
- Pantheon Macroeconomics
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:
- Of the 20.7 million households (where at least one member is aged 16 to 64) in the UK, 11.9 million (57.8%) had all household members aged 16 and over in employment, up 166,000 or 0.8 percentage points over the past year. There were 5.7 million households (27.7%) with a mix of at least one working and one workless adult, down 85,000 or 0.4 percentage points over the year. There were 3.0 million households (14.5%) where no member of the household was in employment, down 89,000 or 0.4 percentage points over the last year. Growth in the share of working households in the UK has been driven partly by increased proportions of lone parents working, which has risen 1.5 percentage points to 68.0% over the last year.
And the boxes:
The good news is that worklessness is much improved from 11 years ago, when nearly 21% of households were jobless.