Unemployment figures “do not show the extent of the crisis”

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The way the UK reports unemployment may not reflect the “true extent of unemployment”, says a think tank.

Unemployment rose 34,000 in April to 1.3 million, according to the Office of National Statistics (ONS).

But the Resolution Foundation maintains that the 23% drop in the average number of hours worked between the beginning of March and the end of April is a better indicator of unemployment.

The ONS said it publishes a wide selection of employment analyzes.

Official figures on the number of unemployed people claiming unemployment benefits will be released on Thursday.

Resolution Foundation chief economist Mike Brewer said: “Britain is in the midst of an unprecedented economic shock that is affecting millions of jobs deeply.

“Unemployment is expected to reach 4 million for the first time. And yet, our official data does not show the real extent of this employment crisis ”.

On Tuesday, the government’s budgetary watchdog, the Office for Budgetary Responsibility (OBR), predicted that unemployment could reach 4 million people, if the economic recovery in the United Kingdom is bad, against 1.3 million in 2019 in his last analysis.

Meanwhile, data on people claiming unemployment benefits jumped to 2.3 million for April.

But these figures could include some people who are eligible for help while they are still employed. The ONS said: “Improvements to universal credit, as part of the UK government’s response to the coronavirus, mean that an increasing number of people have become eligible for unemployment assistance, although they are still employed. ”

The Resolution Foundation says these data also do not reflect the real picture, as they include workers on leave who initially made a claim when the crisis first broke out.

The think tank says it estimates that “less than half (700,000) of the 1.6 million increase in the number of applicants between March and May is related to people who are recently unemployed and are not receiving lay-off wages or subsidies for self-employed workers. of the government ” .

It urges the ONS to increase its capacity to count the number of workers who are employed and not temporarily unemployed, alongside the overall employment rate, as this would provide “a much more accurate picture of activity in the labor market. job “.

The ONS said it agreed that data on hours worked was an important element in understanding the unemployment situation in the UK.

“However, our detailed estimates from the Labor Force Survey are based on interviews with tens of thousands of people and provide essential details that are not available from any other source,” the statement said.

“It’s hard to interpret the numbers of claimants because we know that they include some people at work. ”

In addition, a survey on the intentions of recruitment of the companies carried out by the British Chambers of Commerce (BCC) showed that 28% of the companies declared to have already reduced their manpower since the beginning of the pandemic.

Of the 7,400 companies that participated in the survey, 29% said they planned to downsize in the next three months.

This figure is comparable to that of last year, when only 7% planned to do so.

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