An influx of women back into the workforce has driven an increase in the unemployment rate and ratcheted up the pressure on George Osborne to change his economic strategy and adopt a “Plan B”.
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The major driving force behind the rise in the jobless rate was an increase in women who had previously been looking after the family or home but are now actively seeking work, making them officially unemployed.
The number of people without jobs between December and February rose 70,000 to 2.56 million on the previous three months, taking the overall unemployment rate up to 7.9 per cent, according to the Office for National Statistics.
The number of women who look after the family or home fell to 2.06 million in the latest three-month period, the lowest estimate on record.
The Institute for Fiscal Studies (IFS) think-tank attributed this trend to the gradual increase in the state pension age for women, which has risen from 60 to 61 years and six months.
A greater number of older women are remaining in the workforce, or returning to seek paid work, out of economic necessity, the IFS says.
Younger women are also entering the available work force in greater numbers.
The number of women aged 25 to 34 who are “economically active” increased by 101,000 on a year earlier. Richard Clegg, an employment statistician at the ONS, suggested that this trend might be attributable to the Government’s welfare reforms, which have increased the incentive for women with children in that age group to seek paid employment.
Ministers have cited the fact that job numbers have been rising and unemployment numbers falling since the autumn of 2011 as evidence that, despite the threat of a triple-dip recession, their economic plans have been bearing fruit.
But the latest figures showing a reversal of those trends last night intensified the pressure on the Chancellor to follow the advice of the International Monetary Fund and to slow the pace of his spending cuts.
The TUC General Secretary, Frances O’Grady, called on the Chancellor to “change course and prioritise jobs, growth and living standards”.
David Kern, chief economist of the British Chambers of Commerce, an organisation that has backed the Chancellor’s austerity policies, said Mr Osborne should ramp up employment-creating state infrastructure spending. Tony Dolphin, of the IPPR think-tank, insisted that “more needs to be done to help the most vulnerable groups, including the young and long-term unemployed”.
Youth unemployment is now on a rising trend again, having dipped below the 1 million mark a year ago. Joblessness among 16 to 24 year olds rose to 979,000 in the latest period, a 20,000 increase on the previous three months.
The figures also pointed to an intensifying squeeze on pay. Excluding bonuses, average pay increased by just 1 per cent on a year earlier, the lowest growth rate in a decade. With the annual inflation rate now standing at 2.8 per cent, this shows that most households are still experiencing a real terms pay cut.
John Philpott, of the Jobs Economist consultancy, said the willingness of workers to accept low pay rises since the 2008 financial crisis was one of the reasons employment has held up well, despite the weakness of the overall economy, as employers have been able to increase staffing levels without eating into profits.
But he said that the latest figures suggested that the employment gains from this supply of cheap labour were now petering out. “This doesn’t necessarily mean we are facing a further ongoing surge in joblessness” he said “but it does demonstrate that simply relying on people to price themselves into work cannot guarantee continued employment growth in an economy still experiencing a serious lack of demand”.
The employment minister, Mark Hoban, pointed to a 7,000 fall in the number of people claiming the dole as an encouraging sign. “We will continue to give jobseekers all the help and support they need to realise their aspirations,” he said.
Back to work: Women who want employment
Sophie Knighton, 25, from Brighton had her son Finnin March 2010. She’s worked sporadically since.
“After I had Finn, I worked in a café until it went bankrupt in April 2011. This coincided with me moving out of my parents’ house. In October, I started a part-time drama course and began teaching drama for an hour a week. I claim housing benefit, income support, child benefit and child tax credits. I’ve lost around £30 a week housing benefit, and just had to pay £78 after having my council tax benefit removed. I don’t want to have to work over the summer, as I’d prefer to spend the time with Finn, but I’m going to have to look for a job. I need the money".
Elizabeth Spring, 59, from London, is starting a job as a charity manager in June. She had hoped to retire early and spend a year volunteering. However, at 57, she learned she couldn’t retire until she was 66.
“I’ve been working all my adult life and, like most women, I’ve brought up a child too. I went back to work when my son was six months old. The whole problem with women is that we’re trying to encompass so many roles. Women are somehow expected to work as mothers as well as doing a paid job.”
Regional unemployment between December and February (tabulate under region, total unemployed, change on quarter and unemployment rate)
North East, 131,000, plus 12,000, 10.1%
North West, 288,000, minus 7,000, 8.3%
Yorkshire and The Humber, 253,000, plus 11,000, 9.2%
East Midlands, 175,000, minus 15,000, 7.7%
West Midlands, 252,000, plus 6,000, 9.1%
East of England, 217,000, plus 9,000, 6.9%
London, 384,000, plus 30,000, 8.9%
South East, 306,000, plus 15,000, 6.8%
South West, 167,000, plus 20,000, 6.2%
Wales, 120,000, minus 3,000, 8.2%
Scotland, 197,000, minus 11,000, 7.3%
Northern Ireland, 72,000, plus 3,000, 8.4%