Unemployment figures - under the magnifying glass

[nickd]

In June 2010, The Prime Minister said unemployment will fall under his parliamant.







Harriet Harmen said he was hiding the real figures over how 1.3 million more people will be unemployed under Cameron's plans.



Over a year later, I wonder who was right? Indeed, I wonder what the real truth is behind all of the unemployment figures?[/u]


Here, the Guardian reported the clash over the unemployment figures last June;

Harriet Harman today warned of "abject misery" in the jobs market after leaked Treasury documents suggested last week's emergency budget could drive up unemployment figures by as much as 1.3m.

The acting Labour leader used prime minister's question time to call on David Cameron to publish the secret Treasury analysis reported in today's Guardian.

The analysis reveals that George Osborne's austerity budget will result in the loss of at least 500,000 public sector jobs and between 600,000 and 700,000 jobs in the private sector by the end of this parliament.

Harman told MPs: "He hasn't agreed to publish those documents. The prime minister should know what abject misery this unemployment will cause to individuals, to families and to communities. Can he tell us how much extra this will cost in unemployment benefits?"

Cameron dodged calls to publish the figures and instead cited a separate forecast published today by the Office for Budget Responsibility (OBR), the government's newly-appointed panel of outside experts.

The forecast suggests unemployment will fall "every year" of this parliament amid an expected job rise of 1.4m in the private sector.

Commenting on the OBR figures, which include full tables for the budget for employment in the public and the private sectors, Cameron said: "The figures published today show two million more private sector jobs. They show 1.4 million people in work at the end of this parliament. They show unemployment falling every year."

The gap between the 2m new jobs and the figure of 1.4 million people in work suggests a gap of 600,000 private sector jobs – in effect chiming with the private Treasury assessment of the impact of the planned spending cuts reported in the Guardian.

This shows the government is expecting between 600,000 and 700,000 private sector jobs to disappear by 2015 as a direct result of Osborne's budget, which represents the biggest squeeze on public spending since the second world war.

The unpublished Treasury analysis also shows that between 500,000 and 600,000 public sector jobs will be lost over the five-year period.

Read the full article:
www.guardian.co.uk/politics/2010/jun/30/david-cameron-harriet-harman-leaked-treasury-unemployment


Perhaps we better have a look at those unemployment statitiscs and see what they say in 2011 and what the predictions are up to 2015?

The figures we need to look at are within these officials documents:

www.publications.parliament.uk/pa/cm201012/cmselect/cmworpen/writev/mainest/dwp_main_est.pdf

www.hm-treasury.gov.uk/d/pesa_2011_complete.pdf

But later, we'll come back to this. We'll have a closer look at how the DWP statistics can be cleverly glossed over to make it look like they nearly had it right when doing their initial estimates on public expendure. Dave also forgot to factor in a few other unknown quantities as well. Like I say, we'll come back to this.

[nickd]

Well, Dave's 2010 (as above) predictions for consistent reduction in the unemployment count didn't quite turn out as he said they would:

The number of unemployed people rose by 38,000 over three months to June 2011; furthermore the recently published government statistics also show highest number of unemployed women since 1988.

Here's what the reports say...

17 August, 2011


The number of unemployed people rose by 38,000 over the three months to June 2011 to reach 2.49m.

The Office of National Statistics' 'Labour Market Statistics Bulletin August 2011', published today, also shows that the quarterly increase in the number of unemployed people is the largest since the three months up to June 2009, and that the number of unemployed women, at 1.05m, is the highest since the three months to May 1988. In addition, the bulletin shows that there were 949,000 unemployed 16 to 24 year olds in the three months to June 2011, up 15,000 from the three months to March 2011.

In relation to jobseeker's allowance (JSA) claims, the statistics show 1.56m claimants in July 2011, up 37,100 on June and the largest monthly increase since May 2009, with the number of women claimants increasing by 15,600 to reach 512,700, the highest figure since April 1996.

In response to the statistics, Minister for Employment Chris Grayling said -

"These are disappointing figures but we always said that the road to recovery would be choppy. Clearly this has been a difficult few months with a range of one-off factors and a slowdown in the world economy having an impact on the UK. This is why is we are focused on taking steps to increase growth, support the economy and encourage businesses to invest and create jobs.

For people who lose their jobs, our new Work Programme is now up and running and will offer jobseekers flexible support tailored to their needs to help them into employment."

Listen to more videos of what the ministers make of it all..

mylegal.org.uk/index.cgi?board=frontline&action=display&thread=421



Link..

[nickd]

The coalition must rethink its approach to youth unemployment
says Matt Cavanagh in an article on the New Statesman- 24 August 2011


"Ministers must accept that the immigration cap will not help young Britons into work."


Today's rise in the number of young people not in employment, education or training is the biggest since records began in 2000. Compared with the same period last year, there are now 119,000 more 19-24 year olds not in education, work or training, representing a rise of 18 per cent. These figures follow new research published yesterday by the Chartered Institute for Personnel Development showing that while youth unemployment rises, employer demand for migrant workers continues to rise.

Both sets of figures should cause the government to rethink its approach. Tomorrow's migration statistics will confirm whether the trends are pushing the net migration target further out of reach: the previous quarter's figures showed emigration of British nationals down by more than 25 per cent since 2008, and immigration from Eastern Europe rising, both trends which the government can do little about. Last week, the Spectator magazine was one of the first to take the questionable argument that used to be levelled at Labour, that 'too many new jobs are going to foreigners', and turn it against the government. Yesterday's CIPD survey suggests that this pressure is likely to worsen, as employer demand for migrant workers continues to rise, particularly in the private sector, with 32 per cent now saying they are planning to recruit migrant workers in the next quarter:

Another view that unemployment is becoming a problem, one which really can't be blamed on there being too many migrant workers.

www.newstatesman.com/blogs/the-staggers/2011/08/immigration-workers-employers

[nickd]

Another condemnation of rising youth unemployment:

Generation 2011 – the worst NEETs ever

By Richard Darlington

"Yesterday's publication of NEET statistics - young people not in education, employment or training makes - make for shocking reading. Compared with the same period last year, there are now 119,000 more 19-24 year olds out of education, work and training, representing a rise of 18%. This is the biggest rise since records began in 2000.

Looking at this graph (below) upside-down, you see that young people are experiencing the double-dip in their fortunes that so many have predicted for the economy as a whole. The figures are hot on the heels of statistics released last week on the number of young people looking for work."

Read more...

www.labourlist.org/generation-2011--the-worst-neets-ever

[nickd]

And in February this year, it didn't look too good on the unemployment count according to the following BBC article:

UK unemployment total rises again[/u]


UK unemployment rose by 44,000 to almost 2.5 million in the three months to the end of December, the Office for National Statistics (ONS) has said.

Youth unemployment rose to a fresh record high, with more than one in five 16 to 24-year-olds out of work after a rise of 66,000 to 965,000.

The unemployment rate is now 7.9%, with youth unemployment running at 20.5%.

The number of people claiming Jobseeker's Allowance also increased, by 2,400 last month to 1.46 million.

Prime Minister David Cameron said unemployment, particularly among the young, was "a matter of great regret".

But he stressed that it had been a problem for some time.

The number of people in part-time work because they could not find a full-time job rose by 44,000 to 1.19 million, another high since records began in 1992.

"The latest UK labour market figures provide further evidence that the jobs recovery has gone into reverse," said economist Vicky Redwood.

long term unemployment also deteriorated, with 17,000 more people out of work for more than a year, to a total of 833,000.

Other data from the ONS showed that average earnings rose by 1.8% in the year to December last year, slightly down on the 2.1% growth in the year to November.

The figures also showed that unemployment fell in Scotland by 13,000, but rose in England, Wales and Northern Ireland.

'Less impressive'

The government said the latest figures showed that unemployment was starting to stabilise.

"We've got a long way to go and I want to see these figures start to come down, but certainly the evidence is over the past month things have settled down and we are not seeing the increases we saw earlier in the last quarter," said Employment Minister Chris Grayling.

There were 40,000 more job vacancies in the three months to January than in the previous three months. This is often seen as an indicator of the health of the economy and whether companies are creating jobs.

But the ONS said that most of these new vacancies were temporary jobs, working on the 2011 Census. Excluding this, there were 8,000 more vacancies.

Shadow work and pensions secretary Liam Byrne said this was a sign that the government could not rely on the private sector to create jobs.

"There are still five people chasing every single job and in about a hundred constituencies, 10 people are chasing every job," he told BBC News.

www.bbc.co.uk/news/business-12477563

[nickd]

But as always George calls it a victory




But does he really understand all the the statistics upon which he relies?


UK unemployment

The Office for National Statistics (ONS) said the number of people unemployed fell by 88,000 in the three months to April, to 2.43 million — the largest drop since the summer of 2000

"Since 1984"

Unemployment is falling at its fastest pace in a decade, official figures reveal, in a boost for George Osborne. The Office for National Statistics (ONS) said the number of people unemployed fell by 88,000 in the three months to April, to 2.43 million — the largest drop since the summer of 2000. The unemployment rate was 7.7%, down from 8% three months earlier.

But the more timely claimant count measure of unemployment showed a much worse than expected rise of 19,600 in May to 1.49 million.

www.guardian.co.uk/business/interactive/2009/jun/22/unemployment-and-employment-statistics-recession

[nickd]

With all of these statistics flying around, and in the course of compiling the welfare reform post, my eye was drawn to one or two problems in the recording of these figures.

Now far be it from me to suggest our politicians may have been cooking the books, or perhaps engaging in a bit of creative accountancy over these figures; -they do warrant closer inspection.


Time to get the magnifying glass out





So let's have a look shall we?

* Generally speaking all figures are in units of thousands where the claimant count is concerned and in millions where money is concerned. So 11.8 in claimants would be 11,800 and so forth multiplying up to millions.

Given all the blame game between politicians and the attribution of all fault on systematic failure with the benefits system over the last 13 years, I think it important to dig a little deeper and at least see what the situation was prior to when the Labour administration came to power in May 1997.

Here's what an extract from the BBC tells us:

"The Government has come under attack for proposing to reform the welfare system. Much of the criticism has focused on fears that one of the targets of the reform will be the seemingly ever-growing bill for disability benefits.

Spending on benefits for the long-term sick and disabled has doubled since the early 1990s. It is now an estimated £23.9bn for the current financial year, according to the Department of Social Security.

Since 1992-93, expenditure on these benefits has increased by around 14% a year in real terms. The number of people receiving disability benefits - now standing at around 3.7bn - has increased by an average of 9% over the same period.

Spending on some disability benefits has risen faster than on others. For example, expenditure on Disability Living Allowance has grown by around 19% each year in real terms since 1992-93.

There are a number of reasons for the increase in disability benefit spending:

Disability Living Allowance accounted for a large part of the increase in spending. It was introduced in 1992 to replace and extend Attendance Allowance and Mobility Allowance.
The benefit was widely publicised which encouraged take-up, possibly from those who may have been entitled to benefit but had not previously claimed it.

Expenditure on Invalidity Benefit increased with the growth in unemployment in the 1980s. It has been suggested that some people were encouraged to claim invalidity benefit rather than unemployment.

The Conservative government tried to tackle this problem in 1995 by replacing Invalidity Benefit with Incapacity Benefit in 1995. This tried to tighten the eligibility rules by introducing new tests. It has not reduced this area of spending, however, though it has halted the previous rise.

The ageing population has inevitably increased spending on disability benefits for the over 65s.

There has been a large increase in the number of people qualifying for Disability Premium, which is paid to those receiving Income Support. The total has doubled from 375,000 in 1991-92 to 786,000 in 1996-97."

Read more...

Link to article

news.bbc.co.uk/1/hi/uk/politics/39788.stm

The article also tells us that in 1997 there were 2,373,000 (2.3 M) Incapacity claimants (which used to be called Invalidity benefit)

A parliamentary link provides us also with a 1997 figure for the number of unemployed which stood at 1,123,273. (1.1 M)

www.parliament.uk/documents/commons/lib/research/rp98/RP98-010.PDF

So contrary to common belief things weren't looking too rosy under the last Conservative government who of late seem to be taking kind of a premier stance on their ability to maintain the welfare system. Before they claim their welfare rosette, perhaps they need to look more at their historic record?

Now if we take these figures, we have a total of 3,496 on either JSA or on IB in 1997.

The next set of figures have been taken from the IFS (2010) and tell us how the claimant count went from 1999 to 2009.

[All figures in thousands so 1,181.86 = 1,181,860.00 or 1.18 M]

The figures for JSA

Aug-99 - 1,181.86
Aug-00 - 1,015.83
Aug-01 - 907.68
Aug-02 - 890.54
Aug-03 - 851.37
Aug-04 - 769.25
Aug-05 - 825.11
Aug-06 - 900.92
Aug-07 - 788.45
Aug-08 - 868.73
Aug-09 - 1,485.32

The figures for IB (which was steadily replaced by ESA in October 2008)

Aug-99 - 2,655.38
Aug-00 - 2,714.85
Aug-01 - 2,763.62
Aug-02 - 2,769.36
Aug-03 - 2,777.06
Aug-04 - 2,774.93
Aug-05 - 2,725.47
Aug-06 - 2,683.00
Aug-07 - 2,641.11
Aug-08 - 2,590.61
Aug-09 - 2,632.74

The combination figures for IB/JSA (and some ESA)

Aug-99 - 3,837.24
Aug-00 - 3,730.68
Aug-01 - 3,671.30
Aug-02 - 3,659.90
Aug-03 - 3,628.43
Aug-04 - 3,544.18
Aug-05 - 3,550.58
Aug-06 - 3,583.92
Aug-07 - 3,429.56
Aug-08 - 3,459.34
Aug-09 - 4,118.06

Now. it all becomes a bit more difficult to locate some clean figures from 2009 onwards, these are now produced by the National Office of Statistics. It's all very comprehensive and will probably tells you a person's inside leg measurement if you look hard enough as well as which way the wind was blowing in Scarborough on any day of the year; but finding DWP information requires a bit more of a trawl! There are amongst these some figures which are at variance to the IFS figures, take the JSA figures for 2009 for instance, according to the IFS they were 1,485.32, yet the ONS records them at 1,548.7; - why aren't they the same - when the IB figures are?


If you use the link you can see the full tables..

www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-222417

You will then need to look for the excel spreadsheet downloads and go to A01 XLS (worksheet 25) 'Key out of work benefits', you will see a summary from which I've been able to take the following figures:

JSA

Aug-09 - 1,548.70
Aug-10 - 1,397.00
Feb-11 - 1,477.70

IB/ESA

Aug-09 - 2,632.70
Aug-10 - 2,606.60
Feb-11 - 2,578.70

Combined JSA/IB/ESA

Aug-09 4,181.40
Aug-10 4,003.60
Feb-11 4,056.40

Now, one of the things which I find quite astonshing about these figures is how, despite all the tough ESA assessment regime and moves to get people off incapacity related benefits, the figure has infact only gone down from (Aug-08) 2,590.6 to (Feb 11) Feb-11 - 2,578.7; - a difference of 11,900 - it just doesn't add up.

I also note that the ONS statistic base makes for a number of changes (which is why I plumped for one its tables linked to 'previous' methods of recording), in the JSA claimant count for instance, it only includes those related to 'GB' claims, for accuracy this would need to be the same in previous sets of figures.

Ministers, often make a big noise over how figures have fallen. Invariably they often refer to those which appear over a quarter, whereas what really needs to be looked at is the overall trend during and over a longer period of time.

It is particularly, noteworthy that the difference between the combined JSA/IB claimant count of 3,496.27 in 1997 and February 2011 at 4,056.40 is only 560.13 (around half a million); - it's hardly what the media portray is it?

Remember, how the media often throws in the DLA statistics under a mistaken belief that they represent those who are claiming as incapable of work.

But my biggest doubt is over the combination figures currently appearing in the ONS stats. Bear in mind there were around 1.9 Million IB claims in 2010 (according to the IFS) and 0.5M ESA claims, since when we have had a huge number of ESA (and IB/ESA conversions) claimants who have appealed in their droves, I wonder if the appeal figures have been included?

None of these figures stack up, I've consistently held this belief throughout compiling the welfare reform thread and I'm wondering how these IB/ESA appeal cases are being tracked. It remains to be seen how information is being compiled on the number of new ESA claims and those who go from ESA over to JSA. In my view, far more work needs to be carried out over the true numbers; - the figures are adrift.

It makes sense that where large numbers of IB/ESA cases are being refused, the numbers of JSA claims, would - by default - increase because most of this group will move from one to the other, it remains to be seen how many actually fall into work.

Whichever way you look at it, if the unemployment figures are worse than government expected, a further blow will be a number of unaccounted for IB/ESA cases which may be found adrift in the appeals system.

It's vitally important for government to stop being idealogical and start being more accurate. I'm far from convinced we are being presented with the right figures here.

[nickd]

The work with the magnifying glass continues.

So far I've referred only to the claimant counts and how these have added up in terms of separate figures for JSA and also IB/ESA; - I've then gone in to add the two together to give us a 'combination' figure.

I should just mention that the Office of National Statistics have put an emphasis on new groups of people they have identified, such as 'lone parents'; - who they classify as inactive as far as work is concerned. May be this is a fair way of guaging the extent of those who are unemployed but only if 'like for like' figures are being used when comparing sets of statistics. The same can be said of the way that those who don't claim any benefits are now being used in the data sets. It's fair enough to include them in an estimation, but you can't use newer and more inclusive methodology and compare it against less inclusive measuring.

A further area I've looked at is that of cost. After all it's the area where government places so much of its emphasis.

Now, if you look at our HM Treasury public accounts analysis and also cast your eye over individual departmental budgets, you start to see what all of this means in money.

A look at the budgets for Jobcentre plus, tells us that they have a Departmental Expenditure Limit (DEL) for total voted expenditure of £8,239 set for 2010/2011 (in millions) and at first glance the department would seem to be working to a reduction of this down to £7,224 million for 2011/12. Sounds marvelous at making a saving of -£1,015 million or down by -12.32% on the face of it.

But really you need to study these tables in more detail to get the real picture. What you will then notice is how they make 'readjustments' before 'restating' the figures which were initially produced for 2010/2011.

You can see one of these adjustments at the table on page 8 where the sum of -£1,061 million is in effect deducted in so far reduced operating costs are concerned; - they give the reasons in the text, but undoubtedly it all helps balance the books.

It seems extraordinary that with the overall unemployed statistics not materially shifting, they can even think of making this reduction but you can see why they need to elsewhere.

Take for instance the actual Jobcentre plus expenditure. Initially they set this for 2010/2011 at £1,741 million, but they then make a 'readjustment' of £710 m giving a 'restated' figure of £2,451m and compare this against their main figure of £2,368 m for 2011/12. By comparing the restated figure for 2010/11 against the main figure for 2011/12 they are able to say they were out by only £-83 m or -3.39%.

Whereas the real difference should really be considered in the context of a comparison between the initial 2010/11 figure of £1,741 m and the main figure of £2,368 m for 2011/12. Which shows the figure was actually out by - £627 million.

It shows how the budgets are being altered around and where they don't fit, they 'readjust' them by making deductions elsewhere. I suspect there is a lot more of this when you look into the figures.

Have a look and see what I mean on page 8, here...

www.publications.parliament.uk/pa/cm201012/cmselect/cmworpen/writev/mainest/dwp_main_est.pdf

[nickd]

In summary





(1) Is unemployment on the rise; or it it falling?



The figures for JSA claimants (according to the IFS) stood at 1,485.32 in 2009 whilst in the same year the National Office of Statistics (NOS) put the JSA claimant count at 1,548.70. The current source is NOS and using their statistics it then fell to 1,397.00 in August 2010 and has risen again to 1,477.70 in February 2011.

So yes, since 2010 it has risen by 80,700 in the JSA count in the months between August 2010 and February 2011


(2) What about all those who claim Incapacity Benefit or ESA, have they gone up or down?


Well surprisingly, no they haven't really significantly changed that much. In August 1999 the incapacity figures stood at 2,655.38. By 2007 the figure was 2,641.11, by 2008 it was 2,590.61, by 2009 it increased to 2,632.74, then in 2010 it fell to 2,606.60 and in February 2011 the figure stood at 2,578.70 (about 2.5 million).

What surprises me most about this is how the figure in August 2008 stood at 2,590.6 and yet in February 2011 the figure stood at 2,578.7; - a comparatively minor difference of 11,900 claims. I say this in view of all the hype at 'getting people back to work', the adverse media and the much stricter Employment & Support Allowance introduced in October 2008.

To me Government has pledged to tackle long term welfare dependency, so it's meaningless to say the figures are good or bad by just looking at say a three month quarter, you need to look at it historically and see what it is achieving and on balance if the figures are only down by 11,000 since 2008, the figures are either wrong or something simply isn't working.

If the figure is really down by only 11,000 since 2008, it's far too minimal an amount to say whether any moves to get people off welfare and into work are successful.


(3) Do you think the statistics are right?


No, I'd put money on them being wrong. In the first instance there are accepted official errors within the DWP and ultimately they are the data source. Remember I've used two sources, the IFS ones up to 2009 and then the NOS ones from 2009. There's obviously something adrift because the NOS figures for JSA in 2009 are different to the IFS whereas for IB they are the same between the two sources.

As far as benefit expenditure is concerned, I see nothing wrong with using the JSA claimant head count to measure unemployment. However, the NOS use a different methodology which may more accurately pin point the numbers of economically inactive individuals, but when making comparisons with the past it should be done on the same sample basis. The use of the NOS figures accounts for the headline figures of 2.5 million out of work; it's far higher than the JSA head count as the statistics show.

The DWP would I suggest have a real problem with sorting out the claimants who claim contributory IB to those who claim Income Support on the grounds of incapacity. There are huge problems within these departments in communication my experience and I rather suspect problems also exist when data recording their own claimant count. The sheer number of appeals against adverse IB/ESA decisions tells me that the claimant count only reducing by 11,000 from 2008 to 2011 must be incorrect or seriously questionable.

Rather than spend vast fortunes on closely auditing legal aid welfare benefit specialists in at attempt to save the country £28 million, I think government should much more closely audit the DWP and find out what the true claimant count is, I just wonder how many are lost in the appeals system. Ultimately, a proper validation exercise could save billions.

With close to around half a million social security tribunals before the Tribunals every year, there's every possibility that a number of claims are 'between departments' and could quite easily become lost when departments are asked for their claimant count; - it's a valid point.

The difference in the JSA claimant between the IFS and the NOS for the same year in 2009 clearly shows something is wrong. If these were MP's at election time, they'd be demanding a recount.


(4) So who was right, David Cameron or Harriet Harman?


Oh far be it from me to get political! In truth; - neither of them was right, there is just no way of knowing what's going to happen on the job front because of the great uncertainty which hangs over us in terms economic growth. Where I think they both go wrong is by only considering the unemployed and whether the statistics will rise; - it's too simplistic to say analyse whether they'll become employed by the private sector or not.

The greater problem is the 2.4 odd million that government are currently saying should be in the employment market, I refer of course to the number on IB or ESA. With around 61% (at appeal) apparently being found 'fit for work', that's around 1.46 million extra people who will potentially become unemployed. I'm mindful that the DWP are reviewing these claims at the rate of around 10,000 per week, that's potentially putting 6,000 on the dole every seven days.

This is where you have to look at the 'combination' figures between JSA and incapacitated (ESA/IB) claims. The historical data tells us that in 1999 the combined figure stood at 3,837.24, by 2008 it was 3,459.34 and in August 2009 a figure of 4,118.06 was recorded.

To me, what's worrying is that in February 2011 the figure still stands at 4,056.40; it raises the question as to whether more claimants are taking up an ESA claim instead of JSA; may be by more than government cares to let on.

Long term unemployment analysis requires a far more constructive look at what will happen to the incapacitated, it's a waste of time creating any extra jobs for this sector unless we are absolutely certain that they have been correctly identified and are properly assessed. It's only once this has been done that you can begin to look at job creation. The risk is the long term incapacitated will just continue to remain as porns in a game aimed at showing who's master at getting welfare right.


(5) Surely welfare reform will make it all better?


I really hope it will, but it won't in the current way we're headed. It all started off with some good thinking, but political ideology has swamped it all; - it's this which now unfortunately threatens successful implementation.

Why?...

Well you'll have to make up your own mind and I'd invite you to have a read of why I think welfare reform is destined for one almighty car crash.

Read it here:
mylegal.org.uk/index.cgi?board=frontline&action=display&thread=405&page=1
[/i]