Transcribe your podcast
[00:00:00]

One in five working-age people in the UK aren't in the workforce, and that number's risen since the pandemic.

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We've got more people who are so-called economically inactive. That's people who are out of work, but who aren't actively ready to start a job or looking for work.

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There's a cost to this.

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That's something which one worries about from an economic perspective. It's something which one worries about from a fiscal perspective, because if they're not working, they're not paying tax, and they're also more likely to be on benefits.

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To understand what's happening, we need to look at who is off work. Most people in the UK's working age population are employed, but 1.3 million are unemployed, and over 9 million people are what's called economically inactive. They're not looking for work, and there are a number of reasons for that. These include being a student, looking after family or the home, and being retired. Then 2.7 million people aren't working because of long-term sickness. That's over 700,000 more than before the pandemic.

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People out of the workforce for health reasons is now the single largest reason to be outside the workforce if you're an adult, as well as the fastest growing.

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This is increasingly affecting young people. One recent report finds that those in their early 20s are more likely to be workloads due to ill health than those in their early 40s, adding that this is a radically different picture to that of the past.

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For that young age group, there's no single health condition that affects people, but one quite worrying trend is the rising number who are struggling with poor mental health.

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This is part of a broader trend. The Office for National Statistics says the most prevalent health condition among those economically inactive because of long-term sickness was depression, bad nerves, or anxiety. While efforts continue to understand the reasons for a rise in long-term sickness, the government says it's determined to tackle economic inactivity.

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The economy today has around 900,000 vacancies. It would be easy to fill them with higher migration, but with over 10 million adults of working age who are not in work, that would be economically and morally wrong.

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That 10 million figure includes people who are economically inactive and people who are unemployed. Now, the government is using immigration to fill vacancies in some sectors, including social care, but it also has a back to work plan which promises support that will help people stay healthy, get off benefits, and into work. That's the plan, but achieving these goals may be difficult.

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It's a bit of a calundrum at the moment. It's not clear why things haven't given how there are so many vacancies in the economy. It's not clear why we're not seeing improvement.

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The government is working to deliver improvement movements on this, and it's also keen to provide some context.

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Economic in activity, that is those that aren't in work and not looking for work, is relatively low compared to other countries. It's below the OECD average, the level in the G7 and across the European Union.

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That's true. Economic inactivity in the UK is relatively low, but unlike most similar countries, the UK's workforce hasn't returned to the size it was before the pandemic. That connects to the rise in long-term sickness, which is something we're only starting to understand.