Mon 14 Nov 22
A record-breaking gap has opened between the high number of job vacancies and low level of jobseekers available to fill them in the UK, according to new research.
Data compiled by the University of Essex and the University of Edinburgh shows despite there being 400,000 fewer people in work compared to pre-pandemic levels, unemployment has dropped by roughly 6,000.
The findings, which are based on figures from the UK Labour Force Survey (LFS), show there has been a 378,000 rise in inactive workers – people without a job who are not seeking employment – since 2019.
This gap between vacancies and workers available to fill them is said to be at the highest level since records began in 2002.
The researchers found this low level of unemployment is at odds with the record numbers of job vacancies, which are up 60% compared to before the pandemic.
They also show there are fewer workers changing industry or occupation when they move or leave jobs.
Project lead, Professor Carlos Carrillo-Tudela, head of the Department of Economics at Essex, said: “The data shows a lot of older people who are in low-paid and low-skilled jobs are really fed up and choosing to become inactive.
“Since the pandemic, we’ve seen an increase in older men leaving work due to sickness, while there has been a rise in older female workers opting to retire early relative to pre-pandemic trends.
“Whether they can continue to afford not to work isn’t known yet, but because of the aging labour workforce in the UK, it means the number of vacancies is likely to remain high, particularly as industries such as manufacturing are in long-term decline.”
Manufacturing and the retail and wholesale sector have both lost over 200,000 workers since COVID-19, while accommodation and food also suffered badly.
Professor Carillo-Tudela continued: “Some of these industries are in long-scale decline so it’s not a surprise to see workers avoiding them.
“Manufacturing, for example, which always suffers during economic downturns, is being impacted by advanced robotics and outsourcing to cheap labour economies such as China. “But other industries struggling to fill jobs like food and accommodation were badly hit by COVID-19.
“The hospitality industry is rebounding, but we may also be seeing the impact of Brexit on the sector, which has generally relied on young people from across Europe to fill roles while they are in the UK studying, learning the language, or just looking for work.”
Only three sectors have grown significantly in employment since the pandemic; health; public administration; and high-skilled services in industries like IT.
Every quarter, researchers from Essex and Edinburgh universities analyse the latest data to build a Labour Market Snapshot and present a summary online together with explainers on economic terms.
As well as the usual data such as total employment or the unemployment rate, the analysis focuses on inactivity, vacancies, labour market flows, and mobility and reallocation across industries and occupations.
Dr Alex Clymo, from the department of Economics at Essex, added: “The data shows us that there’s never been a better time to be a job seeker who is willing to work and transfer to industries like hospitality and manufacturing that are desperate to fill vacancies.
“This could potentially see jobseekers earn higher wages, with employers trying to offer incentives to get workers through the door.
“You could also argue it’s a good time to be a young person because opportunities to climb the ladder quickly are also available in some sectors, with older and more experienced workers leaving.”
The research has been supported by a grant from the Economic and Social Research Council and focuses on the impact of COVID-19 on unemployment and earnings inequality.
To view the data, visit Covid Jobs Research: UK