Image copyright
fake pictures
The way the UK reports unemployment may not reflect the “true scale of unemployment,” says a group of experts.
Unemployment increased by 34,000 in April to reach 1.3 million, according to the Office of National Statistics (ONS).
But the Resolution Foundation maintains that the 23% drop in average hours worked between early March and late April is a better indicator of unemployment.
The ONS said it publishes a large selection of employment analysis.
Official numbers on how many people are out of work and claiming unemployment benefits will be released Thursday.
Resolution Foundation chief economist Mike Brewer said: “Britain is in the midst of an unprecedented economic shock that is deeply affecting the jobs of millions of people.
“Unemployment is forecast to hit 4 million for the first time. And yet our official data does not show the true extent of this labor crisis.”
On Tuesday, the government’s budget watchdog, the Office of Budgetary Responsibility (OBR), projected that unemployment could hit 4 million people, if the UK economic recovery is poor, compared to 1.3 million in 2019 in his latest analysis.
Meanwhile, data on people claiming benefits soared to 2.3 million in April.
But these figures could include some people who are eligible to claim support while still employed. The ONS said: “Improvements to universal credit, as part of the UK government’s response to the coronavirus, mean that an increasing number of people have become eligible for support of unemployment-related benefits, even though they are still employed “
The Resolution Foundation says this data is not a good reflection of the real picture, as it includes unauthorized workers who initially made a claim when the crisis first hit.
The expert group says it estimates that “less than half (700,000) of the 1.6 million increase in claimant count between March and May is related to people who have lost their jobs and are not receiving a license or subsidy payment for independent government workers. “
Urges the ONS to make more use of its ability to count the number of workers who are employed rather than temporarily out of work, along with the overall employment rate, as this would provide “a much more accurate picture of labor market activity” .
The ONS said it agreed that data on hours worked was an important component in understanding the image of unemployment in the UK.
“However, our detailed estimates from the Labor Force Survey are based on interviews with tens of thousands of people and provide vital details that are not available from any other source,” it said in a statement.
“It is difficult to interpret the plaintiff count numbers as we know they include some people on the job.”
Separately, the British Chambers of Commerce warn that almost a third of UK companies (28%) surveyed expect to cut jobs in the next three months.
The figure compares to last year, when only 7% expected to do so.
Some 7,400 companies participated in the BCC survey, which found that more than a quarter of companies (28%) said they had already reduced their workforce since the pandemic began.
