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Myth Of Full Employment Exposed
The real level of unemployment is just under 2.3 million, says a new report published by Sheffield Hallam University.

This new estimate of unemployment compares with just under 800,000 on the official claimant count and 1.5 million on the government's preferred measure of unemployment based on its Labour Force Survey.

Substantial unemployment remains hidden on incapacity benefits (mostly Employment and Support Allowance), says the new report.

More than 2.4 million men and women of working age are presently out of work on incapacity benefits. Of these, an estimated 750,000 would have been in work in a genuinely fully employed economy, says the report.

These are not fraudulent claims, the report explains. Rather, when men and women with health problems or disabilities are out of work they are often able to claim incapacity benefits instead of unemployment benefits.

The hidden unemployment is concentrated in the weakest local economies, particularly in the industrial areas of the Midlands, North, Scotland and Wales but also in a number of towns around the coast. The consequence is that official figures hide the true scale of disparities across the country.

For a number of regions, the report's estimates of the real level of unemployment are far above the government's own preferred figure:

Wales141,000 (compared with 65,000)
North East143,000 (compared with an official figure of 91,000)
North West319,000 (compared with 177,000)
Yorkshire208,000 (compared with 132,000)
Scotland219,000 (compared with 121,000)


These big differences also apply to many local authorities across the less prosperous parts of the country, for example:

Rhondda14,600 (compared with 5,800)
Middlesbrough9,800 (compared with 5,800)
Blackpool10,400 (compared with 4,300)
Liverpool33,400 (compared with 15,000)
Glasgow40,700 (compared with 17,200)


By contrast, the report says there is little or no evidence of significant hidden unemployment in the most prosperous parts of southern England outside London.

Professor Steve Fothergill from Sheffield Hallam's Centre for Regional Economic and Social Research, one of the authors of the report, said: "Unemployment has fallen over the last five years but the claim that Britain is operating at or close to full employment is wide of the mark.

"What our estimates of the real level of unemployment show is that big variations in the health of regional and local economies are still very much with us. Some parts of southern England may be close to full employment, but that is emphatically not the case in older industrial Britain, nor indeed in many seaside towns."

Myth Of Full Employment Exposed, 30th October 2017, 11:02 AM