ONS - workless households hit record low

Official figures reveal 17.1% of all households have no adult aged 16-64 in work, down from 17.9% in 2012

by Andrew Saunders
Last Updated: 30 Sep 2013

There were a 'mere' 3.5m households in the UK in June with no adult in work, the lowest figure since records began in 1996. That’s down 182,000 from the figure for May, and continues a steady fall amounting to 2.1% of all households since 2010. So the nation’s statisticians-in-chief at the ONS have come up with some good news for supporters of the Coalition’s effort to rein in benefit dependency.

Workless households are defined as those including at least one adult of working age (16-64) where no-one is in work. The number of children living in workless households also fell 159,000 to 1.6m.

Taken in combination with the way that employment has remained consistently higher than many predicted in recent years, these figures suggest that part-time work may be taking up the slack. And fair enough - under-employment is probably less damaging socially than unemployment, although it is storing up potential productivity issues when the upturn arrives.

But even this record low represents a total of 17.1% of all households, a pretty substantial number of people to be economically inactive. It is however a way down on 1996’s peak of 21%, something to be thankful for.

Hidden within that overall average are also stark regional differences. The number is highest in the North East at a whopping 23% and lowest in the South East at 13%. And there are still a scary 224,000 families where no-one has ever worked.

With figures like this, it’s easy to see why the government is so eager to reform the welfare system to encourage people to work if they possibly can. And it’s hard to argue that it’s not better to pay people benefits to work rather than benefits not to work.

But as every good student of Milton Friedman knows, market interventions like that always come with strings attached. In this case, the risk is that the benefits system will end up underwriting thousands of part-time or low-paid jobs which aren’t really economically viable on their own.

Is that Social engineering, or just kicking the can down the road?

Economy Misc

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