Unemployment ‘deep impact’ highlighted

By politics.co.uk staff

Better headline unemployment figures mask the much deeper effect unemployment has had on recessionary Britain, according to the Chartered Institute of Personnel and Development (CIPD).

Later this week GDP figures are expected to show the UK economy returned to positive growth in the final quarter of 2009, ending the recession.

It follows the first quarterly fall in the number of unemployed people in the three months to November, announced last week. Claimant count unemployment fell by 26,000 between November and December.

Despite these positive signs, a CIPD study out today has warned that the overall impact of the recession on the job market is much deeper than initially suggested.

It shows that 1.3 million people were made redundant during the recession, double the net fall in employment.

Furthermore, two-thirds of those who found work after being laid off found themselves earning less than they had been previously.

Many people are also struggling to find permanent jobs. From April 2008 to November 2009 there were 6.2 million fresh claims for jobseeker’s allowance, 7.5 times the rise in the unemployment claimant count.

“Although the scale of job loss in the recession is much less than originally feared and much less than might have been expected given the scale of the contraction in the economy, it is evident that the direct experience of redundancy, repeat spells of unemployment and pay penalties has nonetheless been widespread” CIPD’s chief economic adviser John Philpott said.

“Moreover, given that redundancy also affects the families, friends and former colleagues of those made redundant the full experience of the jobs recession has been wider still.

“This is likely to have a much greater impact on perceptions of job security and consumer confidence during the recovery than the simple ‘unemployment situation is better than feared’ story of the moment would suggest.”