• After reaching record lows in 2019, the share of adults who are unemployed or underemployed is rising again because of the pandemic.

  • The share of adults who are unemployed and underemployed is lower than the period following the 2008 financial crisis.

  • In 2020, 2.9% of adults older than 16 years were unemployed and 5.2% were underemployed.

This chart shows the proportion of UK adults older than 16 years who have reported that they are either unemployed (currently without a job but actively seeking work) or underemployed (in work but looking for additional hours, an extra job or a job with more hours).

Work is a social determinant with a multidimensional relationship with health. It has both a direct effect on health and an indirect effect on health, through the acquisition of economic resources and social networks.

Unemployment

  • Pre-lockdown, the UK had a strong employment performance with the unemployment ratio (unemployment as a share of the population) at a record low, reaching 2.5% in April–June 2019.

  • With lockdown coming into effect in the UK at the end of March 2020, unemployment has risen, with the latest unemployment ratio figure standing at 2.9% for 2020.

  • Unemployment is likely to have been higher if the government had not introduced the job retention scheme, in which the government pays a proportion of employees’ wages during the pandemic restrictions.

Underemployment

  • Underemployment has never returned to pre-2008 recession levels and is nearly double the unemployment ratio. However, the proportion of people who were underemployed declined from 6.1% in 2013 to 4.6% in 2019.

  • The proportion of underemployed people rose to 5.2% in 2020. This figure is likely to continue to rise in 2021 if people continue to work reduced hours due to pandemic restrictions and the associated economic crisis.

Unemployment is yet to increase to the extent that was feared at the start of the pandemic, largely due to unprecedented government support in the form of the Coronavirus Job Retention Scheme. How and when this support ends will be important for the future path of unemployment; moves to wind down the scheme from August 2020 led to a spike in redundancies before the scheme was reinstated.

Unemployment is defined as people actively seeking and being available for work. The unemployment rate is traditionally the unemployed population as a share of the economically active population (both the unemployed and employed population). To allow comparison with underemployment, this chart expresses unemployment as a share of the adult population.

The underemployment measure captures the number of people:

  • looking for an additional job in the reference week

  • looking for a new job with longer hours to replace their current job in the reference week

  • wanting to work longer hours at their current job and at their basic rate of pay.

In addition, people also need to meet the following two criteria.

  1. They were available to start working longer hours within 2 weeks.

  1. They were working 40 hours or less (for people younger than 18 years) or 48 hours or less (for people aged 18 years and older).

This analysis uses the Labour Force Survey and the International Labour Organisation (ILO) definition of unemployment. It does not use the claimant count that gives an administrative count of people receiving unemployment benefit.

Source: Office for National Statistics, Labour market statistics

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