Press Story

Total unemployment has risen by 38,000 in the last quarter but 21,000 of the newly unemployed are women. Given women's participation rate in the labour market, an equitable rise would have been just 17,500. People saying they are being forced to work part-time is now the highest number since records began.

IPPR analysis shows public sector job cuts and changes to the child element of the Working Tax Credit in the Budget are primarily to blame.

IPPR Chief Economist, Tony Dolphin said:

"As evidence has gathered of a sharp slowdown in UK economic growth over the last few months, the one bright spot has been the labour market. After today's latest release of labour market data this is no longer the case.
"Today's news on unemployment is grim. The total number of unemployed people increased by 38,000 to 2.49 million (7.9% of the labour force), while the number out of work for up to six months was up 66,000 - the largest quarterly increase for two years. And the number of Jobseeker's Allowance claimants was up 37,100 in July - the largest monthly increase since May 2009.
"In addition, there are now 1.26 million people worked part-time who say they are doing so because they cannot find full-time employment. This is the highest number since records began in 1992.
"This recent weakness in the labour market is hitting women particularly hard. The total number of women unemployed in the second quarter was 1.05 million, up 21,000 on the quarter and the highest level of female unemployment since 1988. 282,000 women have been out of work for more than a year - the highest since 1995. The number of women claiming Jobseeker's Allowance in July was 512,700, up 15,600 on the month and the highest since 1996. And the 32,000 increase in the number of redundancies between the first and second quarters 'occurred mainly among women'.
"These multi-year highs in unemployment among women are largely the result of government cuts in the public sector workforce. Education, health and public administration are the only parts of the economy that employ more women than men.
"But weakness in the labour market is also a reflection of a lack of growth in demand in the private sector caused by higher food and energy prices, slackening overseas demand and the rapid tightening of fiscal policy. Surveys show that this has led to cutbacks in output expectations and employment intentions among companies across the economy.
"This lack of demand could be countered by a temporary tax cut or a boost to government capital spending accompanied by an increase in quantitative easing. Contrary to the assertion in yesterday's letter from the Chancellor to the Governor of the Bank of England, there is no reason to believe a less strict fiscal tightening this year will necessarily lead to monetary tightening."

Contact

Richard Darlington, 07525 481 602, r.darlington@ippr.org

Tim Finch, 07595 920 899, t.finch@ippr.org