UK has a smaller workforce that is poorer and sicker than in 2019


A person cleaning floor with a machine.

Responding to the new Labour market overview June 2024 released by the Office for National Statistics, Rebecca Florisson, Principal Analyst of the Work Foundation at Lancaster University said:

“Today’s labour market data shows there will be no time for complacency for the next Government as the UK has a smaller workforce that is poorer and sicker than in 2019.

Strong wage growth but living standards have not recovered

“Annual nominal wage growth was 6%, with the record National Living Wage increase of 9.8% improving the pay of 3.3 million low paid workers. There are signs that the wage growth recovery has peaked.

“Despite real wages rising by 2.3% on the year, the economic impact of the Covid-19 pandemic and the war in the Ukraine has made this the first Parliament since 1955 where living standards have declined. The reality is that most people are feeling poorer than when they last voted in the last General Election nearly five years ago.

Facing the challenge of a smaller workforce

The next Government will face the challenge of a smaller workforce than at the start of the Parliament, with the employment rate 1.9% percentage points lower than in December 2019-February 2020. Today, more than a fifth of working-age adults (22.3%) in the UK are not actively looking for work and unemployment has risen to 4.4% which is the highest level for three years.

“There are now a record 2.83 million people who are economically inactive due to long-term sickness – 702,000 higher than in January-March 2020. The UK continues to be an international outlier with participation rates well below pre-Covid levels and this trend shows no sign of abating.

Challenges facing the next Government

Grasping the challenge of high levels of economic inactivity – and how it impacts the exchequer, the welfare system and the health of the nation – will be one of the most pressing tasks facing the next Government.

“Over the coming weeks, political parties should focus on how to support more people into sustainable employment, rather than on binary measures of increasing employment or reducing unemployment that ignore the quality and security of jobs available for jobseekers. Instead, their manifestos must prioritise de-risking the journey back into work, through high quality employment support and designing jobs that offer people adequate reward, security, flexibility and progression.”

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