Why We Should Care About The Half A Million Long-Term Unemployed
The government needs to start thinking of these people as assets, not liabilities and charity cases.
There's nearly half a million people who are not contributing to the economy, who are not paying taxes, and who are not fulfilling their potential. The government needs to start thinking of these people as assets, not charity case liabilities.
We currently have 1.4 million unemployed people. According to the government’s own figures, 1 in 3 of these people are long-term unemployed and growing. The number of us out of employment for over a year has increased 30% since pre-lockdowns - an increase larger than seen during Black Wednesday and the 2008 financial crash. A record spike of 149,337 cases coinciding with lockdown measures. That means 429,000 of us have been out of work for over a year which is the highest it has been since 1995.
It’s not a pretty picture. Unemployment is not just a number. It's not just a statistic. It's a human tragedy. Too often, we forget that behind every unemployment rate is a real person with a real story. That person has hopes and dreams. They have a family to support. They have bills to pay. And when they can't find work, it doesn't just affect them—it affects their whole community.
The long-term effects of unemployment are well-documented. It leads to poorer health, both mental and physical. It increases the risk of homelessness and crime. It weakens social cohesion and trust. And it costs taxpayers billions of pounds every year in benefits and lost productivity. It has been estimated that the total cost of long-term unemployment to society could be as high as £100 billion per year - practically the equivalent of an entire year of NHS spending.
The fact is, unemployment is a bigger problem than most people realise. And if we're going to solve it, we need to start by understanding its true cost—not just to the economy, but to society as a whole. We thus need to see the long-term unemployed not as a burden but as an untapped resource. Because if we can do that, then maybe, just maybe, we can help them get back on their feet and lead productive, fulfilling lives, while reducing our bills in the process.
What’s more, the long-term unemployed are an economic resource that our companies have to pay for anyway. Unemployment benefits are funded through rising National Insurance contributions on every hire they make meaning they are in practice paying people not to work for them. They are a potential source of skilled or re-skilled labour that can be used to fill the 1,246,000 positions and help businesses grow.
Unemployment is bad for mental health, bad for children, and bad for taxpayers. Unemployed people have little resilience to economic shocks such as inflation, and when events happen everyone else has to foot the bill. This is why debate among Tory backbenches has been so tense over whether to increase universal credit payments in line with soaring inflation as opting not to do so represents real terms cuts to the most economically vulnerable in society. Yet electing to increase payments above and beyond average pay rise for those in work means the gap between the unemployed and the lowest paid will narrow - and it will be the lowest paid paying for it through higher taxes.
Unfortunately, this dilemma will be the focus of discussion leading up to the Autumn Statement next week, when there is a more growth-minded and creative discussion we should be having about changing lives rather than just breadlines.
The best way for both groups out of taking the brunt of difficult choices ahead is by getting chronically inactive into work. We need a holistic approach to long-term unemployment that addresses skills, well-being, and psychological barriers to achieving potential. Rather than keeping this 1.4 million on costly state-sponsored bread lines, efforts thus must be on investing smarter in these people so that they can again lead productive, fulfilling lives and contribute to the economy. Only then will we see a reduction in long-term unemployment and an increase in economic growth.
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