Unemployment in the United Kingdom

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Unemployment rate in the United Kingdom, seasonally adjusted, September 2002-2012

Unemployment in the United Kingdom is measured by the Office for National Statistics and in the three months to February 2014 it stood at 6.9 per cent, or 2.24 million people out of work.1 The figures are compiled through the Labour Force Survey, which asks a sample of 53,000 households and is conducted every 3 months.2 Because of the heavy individual and social costs that unemployment creates, the UK government administers a system of public job centres, income insurance for people out of work, and has historically intervened in the economic cycle to ensure employment remains high.

UK unemployment was at its highest recorded level in April 1984 at 11.9% (excluding the Great Depression) and its lowest recorded level in December 1973 at 3.4%.3 Other figures show the record high as occurring in September 1982, with an unemployment rate of 14%, and a record low of 1.0% occurring in the months July to September 1955.4


An unemployment insurance stamp from 1912.
An unemployment insurance stamp from 1923.

In 16th century England no distinction was made between vagrants and the jobless. Both were categorised as "sturdy beggars", to be punished and moved on.5 The closing of the monasteries in the 1530s increased poverty, as the church had helped the poor. In addition, there was a significant rise in enclosure during the Tudor period. Also the population was rising. Those unable to find work had a stark choice: starve or break the law. In 1535, a bill was drawn up calling for the creation of a system of public works to deal with the problem of unemployment, to be funded by a tax on income and capital. A law passed a year later allowed vagabonds to be whipped and hanged.6 In 1547, a bill was passed that subjected vagrants to some of the more extreme provisions of the criminal law, namely two years servitude and branding with a "V" as the penalty for the first offense and death for the second.7 In the 1576 Act each town was required to provide work for the unemployed.8

The Act for the Relief of the Poor 1601, known commonly as the "Elizabethan Poor Law", was one of the world's first government-sponsored welfare programs. It distinguished between those who were unable to work and those able-bodied people who refused employment. Under the Poor Law systems of England and Wales, Scotland and Ireland a workhouse was a place where people who were unable to support themselves, could go to live and work.9 According to Jackson J. Spielvogel, "Poverty was a highly visible problem in the eighteenth century, both in cities and in the countryside... In France and Britain by the end of the century, an estimated 10 percent of the people depended on charity or begging for their food."10 By 1776 some 1,912 parish and corporation workhouses had been established in England and Wales, housing almost 100,000 paupers.

Unemployed men discuss the growing jobless rate in 1931.
Unemployed men gather round the entrance to a trade union building during the July 1930 Depression.

In 1932 in some north east England areas, unemployment reached 70% while the national unemployment level peaked at 22%.11 In the Post-World War II economic expansion of the 1950s and 1960s, average unemployment was 1.6%,12 while in Australia the 1945 White Paper on Full Employment in Australia established a government policy of full employment, which lasted until the 1970s when the government ended this policy.

By 1972 unemployment stood above 1,000,000, and reaching 1.5 million by the end of the decade, with inflation also being high. Although the monetarist economic policies of Margaret Thatcher's Conservative government saw inflation reduced after 1979, unemployment soared in the early 1980s, exceeding 3,000,000, one in eight of the workforce, by 1982. Most of these jobs had been lost in the heavy industry sector, which was in decline.13

Unemployment remained high until an economic boom during the second half of the decade, falling below 3,000,000 in early 1987 and unemployment fell to 1,600,000 by the end of 1989. However, inflation had reached 7.8% and the following year it reached a nine-year high of 9.5%, leading to increased interest rates.14 Another recession began during 1990 and lasted until 1992. Unemployment began to increase and by the end of 1992 nearly 3,000,000 in the United Kingdom were unemployed. Inflation fell to 1.6% by 1993, and stood at 1,800,000 by early 1997. Unemployment fell lower still over the next seven years.15 In 2008, another recession and sharp rise in unemployment occurred in the United Kingdom after 15 years of economic growth and no major rises in unemployment.16 Early in 2009, unemployment passed the 2,000,000 mark, by which time economists were predicting it would soon reach 3,000,000.17 However, the end of the recession was declared in January 201018 and unemployment peaked at 2,500,000 shortly afterwards, appearing to ease fears of unemployment reaching 3,000,000. It has remained at around 2,500,000 or just over in the three years since 2010.19


Unemployment in the European Union in 2010, according to Eurostat.

Official unemployment

Eurostat defines unemployed as people age 15 to 74 who are not working, looked for work in the last 4 weeks, and are ready to start in 2 weeks. Long-term unemployed is anyone unemployed for over 1 year. It uses the European Union Labour Force Survey, which collects quarterly data for all member states.20

Hidden unemployment

Official national (ONS) and international (ILO) statistics measure unemployment as the difference between the active population and the employed population. The figures do not accurately measure the underemployed and discouraged workers.21 Studies by Eurostat22 show that these two categories amounted to over 3 million persons. When added to the official unemployment statistics a total of 5.5 million persons were not able to work to the extent they wish.


Underemployment occurs when a worker is obliged to accept less hours of paid work than they are willing and able to carry out. This is partly visible by measuring the extent of part-time work in the economy. Since 2004 the number of full-time employees in the economy has grown by 3% while the number of part-time workers has grown by 10% to 7.8 million in 2012. The European Labour Force Study shows that 1.9 million part-time workers want to work more. Another indicator of underemployment is the number of workers with a second job.

Discouraged workers

Discouraged workers are defined as those who no longer appear in the statistics of active population.

  • jobless persons seeking a job but not immediately available for work,
  • persons available for work but not seeking it

According to measures by Eurostat these two categories represent 774 thousand and 334 thousand workers respectively.23 According to the ONS there were 2.3 million people counted as inactive who wanted to work.24


Job security

The Phillips curve was thought to show a causal relationship between unemployment and inflation, between 1913 and 1948, but proved incorrect during the 1970s "stagflation".

Job searching

The Beveridge curve shows that the higher unemployment is, the less likely there are to be job vacancies.

Income insurance

Economic theory

See also


  1. ^ The number of people out of work in the UK has fallen by 77,000 to a five-year low of 2.24m in the three months to February, official figures indicate. The unemployment rate now stands at 6.9% of the adult working population, the Office for National Statistics (ONS) said.
  2. ^ See Office for National Statistics, 'How exactly is unemployment measured?' (August 2010)
  3. ^ Source?
  4. ^ Denman, James. and McDonald, Paul., 1996, Unemployment Statistics from 1881 to the Present Day, in Labour Market Trends, January 1996, pp.6-7, Labour Market Statistics Group, Central Statistical Office, http://www.ons.gov.uk/ons/rel/lms/labour-market-trends--discontinued-/january-1996/unemployment-since-1881.pdf, Last accessed 05/05/2013
  5. ^ "Sturdy Beggars". Probertencyclopaedia.com. Retrieved 2009-07-22. 
  6. ^ "Poor Tudors". Localhistories.org. Retrieved 2009-07-22. 
  7. ^ R. O. Bucholz, Newton Key, Early modern England, 1485–1714, p176
  8. ^ "Poverty in Elizabethan England". BBC - History.
  9. ^ "British social policy, 1601-1948", The Robert Gordon University, Aberdeen.
  10. ^ JJ Spielvogel, Western Civilization: Since 1500 (Cengage Learning 2008) 566
  11. ^ "Social conditions in Britain in the 1930s: employment and unemployment". Blacksacademy.net. Retrieved 27 July 2011. 
  12. ^ Sloman, John (2004). Economics. Penguin. p. 811. 
  13. ^ "Thatcher years in graphics". BBC News. 18 November 2005. 
  14. ^ "Historical UK Inflation And Price Conversion". Safalra’s Website. 15 April 2010. Retrieved 27 July 2011. 
  15. ^ "Jobless Rate in Britain Drops to Six-Year Low". The New York Times. 16 January 1997. Retrieved 27 July 2011. 
  16. ^ "Jobless rise highest for 17 years". BBC News. 15 October 2008. Retrieved 27 July 2011. 
  17. ^ "Unemployment passes two million". BBC News. 18 March 2009. Retrieved 27 July 2011. 
  18. ^ "UK economy emerges from recession". BBC News. 27 January 2010. Retrieved 27 July 2011. 
  19. ^ "UK unemployment increases to 2.5 million". BBC News. 21 April 2010. Retrieved 27 July 2011. 
  20. ^ "European Commission, Eurostat". Retrieved 5 November 2009. 
  21. ^ http://www.theguardian.com/news/datablog/2010/mar/17/10-things-unemployment-statistics
  22. ^ http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Unemployment_and_underemployment_statistics
  23. ^ http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/3-19042013-BP/EN/3-19042013-BP-EN.PDF
  24. ^ Labour Market Statistics, November 2013 ECONOMIC ACTIVITY AND INACTIVITY Table 13, page 51


  • AW Phillips, 'The Relation between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861-1957 (1958) Economica

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