Unemployment: a river not a pool
The ONS released some important data today that deserve more attention - the unemployment flows numbers. These show several points of interest:
1. In Q1, 530,000 people moved from unemployment into work. That's over one-in-five of all the unemployed. Even in a depressed economy, folk have a fair chance of finding work.
2. In the same quarter, 342,000 moved from economic inactivity to work. These represent 15.1% of the economically inactive people who'd like a job. The chances of moving from inactivity to work are not much lower than the chances of moving from unemployment to work. This suggests that very many of the inactive are disguised unemployed. With 2.34 million of the inactive saying they'd like a job, this could mean that unemployment is much greater than official figures suggest.
3. Almost as many people moved from inactivity to unemployment (438,000) as moved from employment to unemployment (443,000).This also suggests that the distinction between inactivity and unemployment is fuzzy.
4. 902,000 moved from employment to unemployment or inactivity in Q1. This represents 3.3% of all in employment. This suggests that, over a three month period, the average worker has a one-in-30 chance of losing their job.(This underestimates job insecurity, as it excludes folk who lose their job buy find another within the quarter.)
5. Of those 902,000, 459,000 moved into inactivity and 443,000 moved into unemployment. This tells us that unemployment is a poor measure of people who have lost their jobs, as less than half of those doing so actually become unemployed.
The overall picture here is that we should not speak of a "pool" of unemployment. Rather, the unemployment number is a snapshot of a quite fast-flowing river.Such a snapshot fails to capture the fact that job insecurity is high, and that more people want to work than the headline unemployment figures suggest.
For more on UK unemployment flows, check out the work of Jennifer Smith.