UK labour market an international outlier as long-term sickness hits record 2.82 million

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Responding to the new Labour market overview April 2024 released by the Office for National Statistics, Ben Harrison, Director of the Work Foundation at Lancaster University said:

“Although the ONS advises caution due to increased volatility in their data, today’s statistics suggest it is too early to talk about the UK economy turning a corner.

“Our workforce is sicker and poorer as economic inactivity has risen further to 9.4 million, and unemployment has risen to 4.2%, which is up on the latest quarter and 0.3 percentage points higher than this time last year.

The UK workforce is an international outlier as long-term sickness hits new record

“A record 2.82 million people are economically inactive due to long-term sickness, and the UK is facing unresolved structural issues with labour market participation, as employers aim to fill 916,000 vacancies. The UK continues to be an international outlier with participation rates below pre-Covid levels. Since December 2019 to February 2020, 717,000 people have become economically inactive due to ill health and the tide is not turning.

“As we get closer to a General Election, supporting more people who are long-term sick into secure and sustained employment will be one of the central challenges of the next Government. Policy-makers must look beyond short-sighted approaches that focus on getting jobseekers into ‘any job’. Instead, they must look to improve the quality of the jobs on offer, look at preventative measures that stop sick workers falling out of the labour market and scale up the availability of health and occupational support services to support those who have fallen out of work back into secure, long-term employment.

Real term wages increase for some, but UK remains in 18 year pay squeeze

“Average regular wages grew by 6% on the year. With inflation falling below 4%, this represents a 1.9% real pay rise for workers and the ninth consecutive month that real pay for workers has risen. However, pay growth in construction is lagging behind inflation at 3.1%.

“The UK is still in an 18 year pay squeeze with the OBR predicting real wages won’t return to 2008 levels until 2026. This squeeze impacts the 6.8 million people in severely insecure jobs most, who are particularly vulnerable to living cost increases.”

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