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Public works needed to head off long term unemployment threat

11 February 2009

The claimant count, which has been rising faster over recent months, leapt by 73,800 between December 2008 (revised figure) and January 2009 and now stands at 1,233,000. Unemployment is now, according to this measure, 438,100 higher than it was at its lowest point, in January 2008. The wider LFS measure of unemployment stands at 1,971,000 (a rate of 6.3 per cent) for the three months to December, a rise of 146,000 since the previous quarter, but less than had been predicted by some commentators.

John Atkinson, an Associate Director at the Institute for Employment Studies, says:

‘The continuing rise in claimant count unemployment remains distressing. To this point, though, the level of vacancies and the consequent flow out of unemployment have remained fairly strong, and this has acted to contain the rise in unemployment. Unfortunately, the number of vacancies has now fallen for the first time below half a million, and this will quickly feed back into even higher rates of unemployment and lengthening spells of unemployment within the overall total.

‘In the face of this significantly worsening problem, two key policy changes are now urgently needed.

‘Firstly, additional resources are urgently needed to help Jobcentres try to keep up with the influx of new jobseekers in order to maintain some short term movement off the register.

‘Secondly, labour intensive public works, in construction and infrastructure, should be promoted to reduce long term and entrenched unemployment and to maintain key employability skills within the workforce.’

Further information

John Atkinson is a labour economist with a 30-year track record of research and publication on employment and labour market issues.

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