Unemployment falls for third month in a row

Unemployment fell by 51,000 between February and April and now stands at 2.61 million, while claims for jobseeker’s allowance rose by 8,100 to 1.6 million, according to the Office for National Statistics.

There are 29.28 million people in employment aged 16 and over, up 166,000 on the quarter. The number of people employed in the private sector increased by 205,000 to reach 23.38 million, but public sector employment fell by 39,000 to reach 5.9 million, the lowest figure since March 2003.

The unemployment rate is now 8.2 per cent of the economically active population, down 0.2 per cent on the quarter. Average earnings increased by 1.4 per cent in the year to April, up 0.5 per cent on the previous month.

As our graphic shows, Northern Ireland and northern regions of England are still recording growing rates of unemployment, while the job market in London and the West Midlands remains relatively buoyant.

‘Hidden crisis’

The left-of-centre Institute for Public Policy Research, which had expected unemployment to rise, describes long-term joblessness as “the hidden crisis of the slowest ever economic recovery”.

Another study by Policy Exchange, a right-of-centre think tank, says older people who are out of work are are being discriminated against because of their age.

Policy Exchange applied for more than 1,200 bar jobs and personal assistant positions as a 51-year-old and a 25-year-old, and the responses showed a “huge bias” against the older worker.

Long-term unemployment is the hidden crisis of the slowest ever economic recovery in the UK. Tony Dolphin, IPPR

The IPPR had predicted that with the eurozone debt crisis hitting exports and industrial activity in Britain, unemployment would go up.

Peak

It expects joblessness to peak at 2.75 million, with long-term unemployment continuing to hit the under-25s and over-50s.

The IPPR says 265,000 young people have been without a job for more than 12 months, while 430,600 over-50s are unemployed, more than 40 per cent of them for longer than a year.

IPPR chief economist Tony Dolphin said: “Long-term unemployment is the hidden crisis of the slowest ever economic recovery in the UK. While the ‘youth contract’ is designed to help young people out of work for more than a year, the ‘work programme‘ has only been able to secure employment for about a third of jobseekers on the programme. Government policy is not keeping pace with joblessness.”

Mr Dolphin believes a solution to long-term unemployment is a job guarantee scheme lasting for six months that people would have to take or risk losing their jobseeker’s allowance.

Damage

Policy Exchange says when its 25-year-old applied for jobs, s/he received a far more postive response than the 51-year-old. The study warns that unless there is a significant shift, serious long-term damage could be caused to the economy and living standards of a large part of the population.

Matthew Tinsley, author of the report, said: “The skills and experience that older workers offer employers is vitally important to businesses and the economy as a whole.

“Greater levels of support must be put in place to help unemployed older workers back into the labour market, and to support individuals’ opportunities later in life.”