Unemployment in the United Kingdom
Encyclopedia
Unemployment in the United Kingdom is measured by the Office for National Statistics
and in June 2011 it stood at 7.7 per cent, or 2.45 million people, of whom 1.52 million claim benefits from Jobseeker's Allowance
. The figures are compiled through the Labour Force Survey
, which asks a sample of 53,000 households and is conducted every 3 months. 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.
no distinction was made between vagrant
s and the jobless. Both were categorised as "sturdy beggar
s", to be punished and moved on. 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. 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. During the reign of Henry VIII, as many as 72,000 people are estimated to have been executed. In the 1576 Act each town was required to provide work for the unemployed.
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. 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." By 1776 some 1,912 parish and corporation workhouses had been established in England and Wales, housing almost 100,000 paupers.
In 1932 in some north east England
areas, unemployment reached 70% while the national unemployment level peaked at 22%. In the Post-World War II economic expansion
of the 1950s and 1960s, average unemployment was 1.6%, while in Australia the 1945 White Paper on Full Employment in Australia
established a government policy of full employment, which policy lasted until the 1970s when the government ran out of money.
By 1972 unemployment stood above 1,000,000, and was even higher 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 workers, by 1982. This remained the case until an economic boom in 1987, and unemployment fell to 1,600,000 in 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. 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. In 2008, when the recession brought on another increase in the United Kingdom, after 15 years of economic growth and no major rises in unemployment. Early in 2009, unemployment passed the 2,000,000 mark, by which time economists were predicting it would soon reach 3,000,000. However, the end of the recession was declared in January 2010 and unemployment peaked at 2,500,000 shortly afterwards, appearing to ease fears of unemployment reaching 3,000,000.
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.
Office for National Statistics
The Office for National Statistics is the executive office of the UK Statistics Authority, a non-ministerial department which reports directly to the Parliament of the United Kingdom.- Overview :...
and in June 2011 it stood at 7.7 per cent, or 2.45 million people, of whom 1.52 million claim benefits from Jobseeker's Allowance
Jobseeker's Allowance
Jobseeker's Allowance is a United Kingdom benefit, colloquially known as the dole . It is a form of unemployment benefit paid by the government to people who are unemployed and seeking work. It is part of the social security benefits system and is intended to cover living expenses while the...
. The figures are compiled through the Labour Force Survey
Labour Force Survey
Labour Force Surveys are statistical surveys conducted in a number of countries designed to capture data about the labour market. All European Union member states are required to conduct a Labour Force Survey annually. Labour Force Surveys are also carried out in some non-EU countries. They are...
, which asks a sample of 53,000 households and is conducted every 3 months. 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.
History
In 16th century EnglandEngland
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
no distinction was made between vagrant
Vagrancy (people)
A vagrant is a person in poverty, who wanders from place to place without a home or regular employment or income.-Definition:A vagrant is "a person without a settled home or regular work who wanders from place to place and lives by begging;" vagrancy is the condition of such persons.-History:In...
s and the jobless. Both were categorised as "sturdy beggar
Sturdy beggar
Sturdy beggar is a former British English legal expression for someone was fit and able to work but begged or wandered for a living instead. Sometimes men willing to work but unable to find work were lumped into the same category....
s", to be punished and moved on. 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
Enclosure
Enclosure or inclosure is the process which ends traditional rights such as mowing meadows for hay, or grazing livestock on common land. Once enclosed, these uses of the land become restricted to the owner, and it ceases to be common land. In England and Wales the term is also used for the...
during the Tudor period
Tudor period
The Tudor period usually refers to the period between 1485 and 1603, specifically in relation to the history of England. This coincides with the rule of the Tudor dynasty in England whose first monarch was Henry VII...
. 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
Public works
Public works are a broad category of projects, financed and constructed by the government, for recreational, employment, and health and safety uses in the greater community...
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. 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. During the reign of Henry VIII, as many as 72,000 people are estimated to have been executed. In the 1576 Act each town was required to provide work for the unemployed.
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
Poor Law
The English Poor Laws were a system of poor relief which existed in England and Wales that developed out of late-medieval and Tudor-era laws before being codified in 1587–98...
systems of England and Wales
English Poor Laws
The English Poor Laws were a system of poor relief which existed in England and Wales that developed out of late-medieval and Tudor-era laws before being codified in 1587–98...
, Scotland and Ireland
Irish Poor Laws
The Irish Poor Laws were a series of Acts of Parliament intended to address social instability due to widespread and persistent poverty in Ireland. While some legislation had been introduced by the pre-Union Parliament of Ireland prior to the Act of Union, the most radical and comprehensive...
a workhouse
Workhouse
In England and Wales a workhouse, colloquially known as a spike, was a place where those unable to support themselves were offered accommodation and employment...
was a place where people who were unable to support themselves, could go to live and work. According to Jackson J. Spielvogel
Jackson J. Spielvogel
Jackson Joseph Spielvogel is an associate professor emeritus at Pennsylvania State University. His textbooks are commonly used in high school and college Western Civilization classes. Spielvogel holds a Ph.D., from Ohio State University, and specialized in Reformation history under the supervision...
, "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." By 1776 some 1,912 parish and corporation workhouses had been established in England and Wales, housing almost 100,000 paupers.
- Poor Law Amendment Act 1834Poor Law Amendment Act 1834The Poor Law Amendment Act 1834, sometimes abbreviated to PLAA, was an Act of the Parliament of the United Kingdom passed by the Whig government of Lord Melbourne that reformed the country's poverty relief system . It was an Amendment Act that completely replaced earlier legislation based on the...
and Royal Commission into the Operation of the Poor Laws 1832Royal Commission into the Operation of the Poor Laws 1832The 1832 Royal Commission into the Operation of the Poor Laws was a group set up to decide how to change the Poor Law systems in England and Wales. The group included Nassau Senior, a professor from Oxford University who was against the allowance system, and Edwin Chadwick, who was a Benthamite... - Karl MarxKarl MarxKarl Heinrich Marx was a German philosopher, economist, sociologist, historian, journalist, and revolutionary socialist. His ideas played a significant role in the development of social science and the socialist political movement...
, Das KapitalDas KapitalDas Kapital, Kritik der politischen Ökonomie , by Karl Marx, is a critical analysis of capitalism as political economy, meant to reveal the economic laws of the capitalist mode of production, and how it was the precursor of the socialist mode of production.- Themes :In Capital: Critique of...
(1867) and reserve army of labourReserve army of labourReserve army of labour is a concept in Karl Marx's critique of political economy. It refers basically to the unemployed in capitalist society. It is synonymous with "industrial reserve army" or "relative surplus population", except that the unemployed can be defined as those actually looking for... - National Insurance Act 1911National Insurance Act 1911The National Insurance Act 1911 is an Act of Parliament of the United Kingdom. The Act is often regarded as one of the foundations of modern social welfare in the United Kingdom and forms part of the wider social welfare reforms of the Liberal Government of 1906-1914...
and National InsuranceNational InsuranceNational Insurance in the United Kingdom was initially a contributory system of insurance against illness and unemployment, and later also provided retirement pensions and other benefits...
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
areas, unemployment reached 70% while the national unemployment level peaked at 22%. In the Post-World War II economic expansion
Post-World War II economic expansion
The post–World War II economic expansion, also known as the postwar economic boom, the long boom, and the Golden Age of Capitalism, was a period of economic prosperity in the mid 20th century, which occurred mainly in western countries, followed the end of World War II in 1945, and lasted until the...
of the 1950s and 1960s, average unemployment was 1.6%, while in Australia the 1945 White Paper on Full Employment in Australia
White Paper on Full Employment in Australia
The White Paper Full Employment in Australia was the defining document of economic policy in Australia for the 30 years between 1945 and 1975. For the first time, the Australian government accepted an obligation to guarantee full employment and to intervene as necessary to implement that guarantee...
established a government policy of full employment, which policy lasted until the 1970s when the government ran out of money.
- ILO, Unemployment Convention, 1919Unemployment Convention, 1919Unemployment Convention, 1919 is an International Labour Organization Convention.It was established in 1919:Having decided upon the adoption of certain proposals with regard to the "question of preventing or providing against unemployment",......
- Adams v. TannerAdams v. TannerAdams v. Tanner, 244 U.S. 590 , is a US Supreme Court case, which held that a Washington state law that prohibited employment agencies was unconstitutional.-Facts:...
, 244 U.S. 590 (1917) - Unemployment Insurance Act 1920Unemployment Insurance Act 1920The Unemployment Insurance Act 1920 was an Act of Parliament in the United Kingdom. It extended unemployment benefits to most manual workers and lower-paid non-manual workers from the age of 16....
, Unemployment Insurance Act 1921Unemployment Insurance Act 1921The Unemployment Insurance Act 1921 was an Act of Parliament in the United Kingdom. The Act stated that Under-18s were to receive less unemployment benefits than adults and females would receive less than males....
, Unemployment Insurance Act 1924Unemployment Insurance Act 1924The Unemployment Insurance Act 1924 was passed when the British Labour Party was in power in 1924.The Act arose from a dispute over the means testing of benefits. The Labour Cabinet disagreed on whether means testing should be abolished or whether such a move would prove too costly...
, Unemployment Insurance Act 1927Unemployment Insurance Act 1927The Unemployment Insurance Act 1927 was an Act of the Parliament of the United Kingdom passed by the Conservative Party in 1927. It reintroduced means testing for some benefits. One of the more controversial proposals was to raise Treasury contributions to that made by employers and workers, this...
and Unemployment Insurance Act 1930Unemployment Insurance Act 1930The Unemployment Insurance Act 1930 was passed in the United Kingdom in response to the economic problems emerging due to the Wall Street Crash and Great Depression. It substantially reformed the benefits system and abolished the rule that those claiming benefits must genuinely be seeking work.... - ILO, Unemployment Provision Convention, 1934 (shelved)Unemployment Provision Convention, 1934 (shelved)Unemployment Provision Convention, 1934 is an International Labour Organization Convention.It was established in 1934, with the preamble stating:...
- Unemployment Act 1934Unemployment Act 1934The Unemployment Act 1934 was an Act of Parliament in the United Kingdom, reaching statue on 28 June 1934. It reduced the age at which a person entered the National Insurance scheme to 14 and made the claiming age 16 years. It also separated benefits earned by paying National Insurance and those...
and Unemployment Assistance BoardUnemployment Assistance BoardThe Unemployment Assistance Board was a body set up in Britain in 1934 due to the high levels of inter-war poverty in Britain. The Board kept a system of means tested benefits and did widen the number of people who could claim relief.... - Interwar unemployment and poverty in the United Kingdom
- Great Depression in the United KingdomGreat Depression in the United KingdomThe Great Depression in the United Kingdom, also known as the Great Slump, was a period of national economic downturn in the 1930s, which had its origins in the global Great Depression...
- United States, Employment Act of 1946 and the Humphrey–Hawkins Full Employment Act of 1978 and full employmentFull employmentIn macroeconomics, full employment is a condition of the national economy, where all or nearly all persons willing and able to work at the prevailing wages and working conditions are able to do so....
- National Assistance Act 1946
By 1972 unemployment stood above 1,000,000, and was even higher by the end of the decade, with inflation also being high. Although the monetarist
Monetarism
Monetarism is a tendency in economic thought that emphasizes the role of governments in controlling the amount of money in circulation. It is the view within monetary economics that variation in the money supply has major influences on national output in the short run and the price level over...
economic policies of Margaret Thatcher's
Margaret Thatcher
Margaret Hilda Thatcher, Baroness Thatcher, was Prime Minister of the United Kingdom from 1979 to 1990...
Conservative
Conservative Party (UK)
The Conservative Party, formally the Conservative and Unionist Party, is a centre-right political party in the United Kingdom that adheres to the philosophies of conservatism and British unionism. It is the largest political party in the UK, and is currently the largest single party in the House...
government saw inflation reduced after 1979, unemployment soared in the early 1980s, exceeding 3,000,000, one in eight workers, by 1982. This remained the case until an economic boom in 1987, and unemployment fell to 1,600,000 in 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. 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. In 2008, when the recession brought on another increase in the United Kingdom, after 15 years of economic growth and no major rises in unemployment. Early in 2009, unemployment passed the 2,000,000 mark, by which time economists were predicting it would soon reach 3,000,000. However, the end of the recession was declared in January 2010 and unemployment peaked at 2,500,000 shortly afterwards, appearing to ease fears of unemployment reaching 3,000,000.
- Employment Promotion and Protection against Unemployment Convention, 1988Employment Promotion and Protection against Unemployment Convention, 1988Employment Promotion and Protection against Unemployment Convention, 1988 is an International Labour Organization Convention to promote employment especially vocational guidance, training and rehabilitation, offr the best protection against the adverse effects of involuntary unemployment, but that...
- New Deal (United Kingdom)
Overview
- Economy of the United KingdomEconomy of the United KingdomThe economy of the United Kingdom is the sixth-largest national economy in the world measured by nominal GDP and seventh-largest measured by purchasing power parity , and the third-largest in Europe measured by nominal GDP and second-largest measured by PPP...
- Youth unemployment in the United KingdomYouth unemployment in the United KingdomYouth unemployment in the United Kingdom is the level of unemployment among young people, typically defined as those aged 18–25. A related concept is graduate unemployment which is the level of unemployment among university graduates...
- NEETNEETNEET is a government acronym for people currently "not in education, employment, or training". It was first used in the United Kingdom but its use has spread to other countries, including Japan, China, and South Korea...
Eurostat
Eurostat
Eurostat is a Directorate-General of the European Commission located in Luxembourg. Its main responsibilities are to provide the European Union with statistical information at European level and to promote the integration of statistical methods across the Member States of the European Union,...
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.
- Economy of the European UnionEconomy of the European UnionThe economy of the European Union generates a GDP of over €12,279.033 billion according to the International Monetary Fund , making it the largest economy in the world...
Law
- United Nations Universal Declaration of Human Rights
- Jobseekers Act 1995 (c 18) and Jobseeker's AllowanceJobseeker's AllowanceJobseeker's Allowance is a United Kingdom benefit, colloquially known as the dole . It is a form of unemployment benefit paid by the government to people who are unemployed and seeking work. It is part of the social security benefits system and is intended to cover living expenses while the...
and Jobcentre PlusJobcentre PlusJobcentre Plus was a government agency for working-age people in Great Britain. The agency was formed when the Employment Service, which operated Jobcentres, merged with the Benefits Agency, which ran social security offices, and was re-named Jobcentre Plus on 1 April 2002... - Jobseekers Act 1995 s 19, disparity in definitions on misconduct
- New Deal (United Kingdom)
Job security
- RedundancyRedundancyRedundancy may refer to:* Redundancy * Redundancy * Redundancy * Redundancy * Redundancy * Data redundancy* Gene redundancy* Logic redundancy...
under Employment Rights Act 1996Employment Rights Act 1996The Employment Rights Act 1996 is a United Kingdom Act of Parliament passed by the Conservative government to codify the existing law on individual rights in UK labour law. Previous statutes, dating from the Contracts of Employment Act 1963, included the Redundancy Payments Act 1965, the...
s 135 - Unfair dismissalUnfair dismissalUnfair dismissal is the term used in UK labour law to describe an employer's action when terminating an employee's employment contrary to the requirements of the Employment Rights Act 1996...
, ERA 1996 ss 94-98 - Reasonable notice, ERA 1996, s 86
- Works councils
- Information and consultation
Job searching
- Jobcentre PlusJobcentre PlusJobcentre Plus was a government agency for working-age people in Great Britain. The agency was formed when the Employment Service, which operated Jobcentres, merged with the Benefits Agency, which ran social security offices, and was re-named Jobcentre Plus on 1 April 2002...
- Public employment agency
- Employment Agencies Act 1973Employment Agencies Act 1973Employment Agencies Act 1973 is a United Kingdom Act of Parliament and part of a wider body of UK agency worker law. It regulates the conduct of employment agencies which recruit and manage temporary and permanent labour. It applies to approximately 17,000 employment agencies operating in the UK...
- LEAP (Learning and Enterprise Access Points)LEAP (Learning and Enterprise Access Points)LEAPs are education and training points located in market towns across Suffolk, United Kingdom. LEAPs are developed by the University Campus Suffolk, the local government and the East of England Development Agency...
Income insurance
- Supplementary BenefitSupplementary BenefitSupplementary Benefit was a means-tested benefit in the United Kingdom, paid to people on low incomes, whether or not they were classed as unemployed. Introduced in November 1966, it replaced the earlier system of discretionary National Assistance payments and was intended to 'top-up' other...
1966, abolished in 1988 - Statutory sick payStatutory sick payIn the United Kingdom Statutory Sick Pay is paid by their employer to all employees who are sick for a period longer than 4 consecutive days but less than 28 weeks. The first 3 days of sickness are called waiting days...
- Severe Disablement AllowanceSevere Disablement AllowanceSevere Disablement Allowance was a United Kingdom state benefit intended for those below the state pension age who cannot work because of illness or disability. It was replaced by Incapacity Benefit in April 2001, which itself was replaced by Employment and Support Allowance...
replaced by Incapacity benefitIncapacity benefitIncapacity Benefit is a United Kingdom state benefit that is paid to those below the State Pension age who cannot work because of illness or disability and have made National Insurance contributions. It is administered by Jobcentre Plus...
in 2001.
- Income SupportIncome SupportIncome support is an income-related means-tested benefit in the United Kingdom for people who are on a low income. Claimants of Income Support may be entitled to certain other benefits, for example, Housing Benefit, Council Tax Benefit and help with health costs...
, means tested benefit for people on low incomes. - Employment and Support AllowanceEmployment and Support AllowanceEmployment and Support Allowance is a UK Government State Benefit which replaced new claims for Incapacity Benefit and Income Support on the basis of incapacity for work for most claimants from 27 October 2008. Initially, claimants already receiving Incapacity Benefit continued to receive it as...
2008, replaced incapacity benefitIncapacity benefitIncapacity Benefit is a United Kingdom state benefit that is paid to those below the State Pension age who cannot work because of illness or disability and have made National Insurance contributions. It is administered by Jobcentre Plus...
and split off and replaced income supportIncome SupportIncome support is an income-related means-tested benefit in the United Kingdom for people who are on a low income. Claimants of Income Support may be entitled to certain other benefits, for example, Housing Benefit, Council Tax Benefit and help with health costs...
on grounds of sickness or disability
- Housing BenefitHousing BenefitHousing Benefit is a means tested social security benefit in the UK that is intended to help meet Housing costs for rented accommodation. The primary legislation governing Housing Benefit is the Social Security Contributions and Benefits Act 1992. Operationally, the governing Regulations are...
- Jobseeker's AllowanceJobseeker's AllowanceJobseeker's Allowance is a United Kingdom benefit, colloquially known as the dole . It is a form of unemployment benefit paid by the government to people who are unemployed and seeking work. It is part of the social security benefits system and is intended to cover living expenses while the...
Economic theory
- Automatic stabilisers
- JM Keynes, The General Theory of Employment, Interest and Money (1936)
- Effective aggregate demand
- Fiscal stimulus
- Natural rate of unemploymentNatural rate of unemploymentThe natural rate of unemployment is a concept of economic activity developed in particular by Milton Friedman and Edmund Phelps in the 1960s, both recipients of the Nobel prize in economics...
See also
- UK labour law
- List of countries by unemployment rate
- List of recessions in the United Kingdom
- List of stock market crashes
- Relationship of automation to unemploymentRelationship of automation to unemploymentThe relationship of automation to unemployment is a multivariate one, and people's ideas about its nature in their time, as well as their predictions about the future, have varied widely...
External links
- Office for National Statistics, 'How exactly is unemployment measured?' (August 2010)
- Eurostat's page on unemployment