Last week the Prime Minister announced several welfare reform measures with the aim of tackling the unprecedented rise in economic inactivity and ensure the benefits system is better targeted at those who need it most.聽 The Office for National Statistics defines a person as being economically inactive if they are aged 16 and over without a job, have not sought work in the last four weeks, and/ or are not available to start work in the next two weeks. Those who are economically inactive are a subset of the out-of-work population, differing from those unemployed, in that they are not actively seeking and/ or not available for work.聽 This group consists mostly of students, those looking after a family member, long-term sick and disabled, temporarily sick, retired, and discouraged workers.
Since comparable records began over 50 years ago, the economic inactivity rate has generally been falling.聽 The Office for National Statistics recently announced that the UK's economic inactivity rate was 21.3% for 2023.聽 That is, one in every five people of working age was not actively looking for work!聽 This figure was only slightly lower for North Wales at 20.7%.聽 聽A high economic inactivity rate can lead to social and economic problems. For example, the capacity of an economy to grow is restricted when the proportion of people not participating in the labour market is high unless it is offset by an increase in immigration or productivity.
A high economic inactivity rate not only harms the economy but also indicates a deeper health crisis occurring across the country. Some of those economically inactive are students, who are not active in the labour market because they are studying full-time. Even when stripping out students from the data, the economic rate was 17.5% for the UK and 18.3% for North Wales.
One key driver of economic inactivity in recent years has been ill-health. Those who suffer from ill-health face real challenges in participating in work and those with health-limiting conditions cannot just slot into the jobs available. Employers need to offer flexible working conditions and the support needed to help those with ill-health adapt to the working environment. The government has an important role to play too; rising levels of ill-health are linked to years of under-investment in the NHS and economic inactivity will not be tackled without more funding. It is worth mentioning that work itself may be the cause of ill-health. There is evidence that as work has become more intensive over recent decades, work itself has become a health risk. Work that does not pay enough and is unrewarding in other ways can lead to economic inactivity.
Participating in good quality work can have positive benefits, from health and well-being to financial security and quality of life through social participation. A society where everyone who wants to work can secure and retain employment should be the aspiration for all stakeholders who seek a sustainable and inclusive economy.
We need to have a serious conversation about those not actively looking for work
This article by Dr Edward Thomas Jones was first published in therecently.
