Unemployment in the UK is now so low it’s in danger of exposing the lie used to create the numbers
- Government statistics put unemployment in Britain at just 4.5% — a record low not seen since the 1970s.
- But the real rate of unemployment is four times that.
- We walk you through the evidence that shows why official unemployment numbers are so misleading.
LONDON — Unemployment in Britain is now just 4.5%. There are only 1.49 million unemployed people in the UK, versus 32 million people with jobs.
This is almost unheard of. The last time unemployment was this low was in December 1973, when the UK set an unrepeated record of just 3.4% unemployment.
The problem with this record is that the statistical definition of “unemployment” relies on a fiction that economists tell themselves about the nature of work. As the rate gets lower and lower, it tests that lie. Because — as anyone who has studied basic economics knows — the official definition of “unemployment” disguises the true rate of unemployment. In reality, about 21.5% of all workers are without jobs, or 8.83 million people, according to the ONS.
That’s more than four times the official number.
For decades, economists have agreed on an artificial definition of what “unemployment” means. Their argument is that because there is always someone who is taking time off, or has given up looking for work, or works at home to look after their family, that those people don’t count as part of the workforce. In addition, the unemployment rate can never truly hit zero, because even when people change jobs they tend to take a break of a few weeks between them. Very few people quit on Friday and start at a new place on Monday. In the UK and the US, technical “full employment” has, as a rule of thumb, been historically placed at an unemployment rate of somewhere between 5% and 6%. When unemployment gets that low it generally means that anyone who wants a job can have one.
