A row of ambulances outside the emergency department of the Royal London Hospital on November 24, 2022, in London. In the UK, the number of “economically inactive” people – those who are neither working nor looking for work – between the ages of 16 and 64 has increased by more than 630,000 since 2019.
Photo Leon Neal / Getty
LONDON — Coupled with sky-high inflation and energy costs, Brexit-related trade predicament and an ongoing recession, the UK economy is being hammered by record numbers. workers report long-term illness.
The Office for National Statistics reported that between June and August 2022, about 2.5 million people cited long-term illness as the main reason the economy was not working, an increase of about half a million people since 2019. .
The number of “economically inactive” people – those who are neither working nor looking for work – between the ages of 16 and 64 has increased by more than 630,000 since 2019. Unlike other major economies, the data Recent UK data shows no sign that these displaced workers are returning to the labor market, even as inflation and energy costs weigh on household finances.
The UK has avoided mass job losses during the Covid-19 pandemic thanks to a scheme to subsidize businesses to retain workers. But since lockdown measures were lifted, the country has seen a labor market exodus of a rate unique among advanced economies.
In it last month’s reportThe ONS said a range of factors could be behind the recent spike, including a record-high National Health Service waiting list, an aging population and the lingering effects of Covid.
“Young people have also seen some of the largest relative increases, and some industries such as wholesale and retail have been affected to a greater extent than others,” the ONS said.
While the impact of the above problems has not been quantified, the report attributes the increase to “other health problems or disabilities”, “mental illness and neurological disorders”, and ” issues related to [the] back or neck.”
Legacy of austerity
Jonathan Portes, professor of economics and public policy at King’s College London, told CNBC that the scale of the labor market decline could be a combination of prolonged Covid; other health problems related to the pandemic such as mental illness; and the current crisis in the NHS.
In addition, he notes that factors that directly harm public health — such as increased waiting times for treatment — can have a knock-on effect: people may have to leave the force. labor force to care for sick relatives.
“It’s worth remembering that the UK has been here before, so to speak at least twice. In the early 1990s, the UK saw a strong recovery, with unemployment rates rising. declined after ‘Black Wednesday’, but it also saw a large and long-lasting increase in the number of claimants related to incapacity,” said Portes, adding that Not working is generally harmful to both health and employability.
“The government is clearly not doing much about this. Aside from addressing the crisis in the NHS, another important policy area is helping sick and disabled people return to work, and almost certainly, back to work. There’s not enough going on with this — instead the government is harassing Universal Credit users with penalties and sanctions that we know aren’t helping much.”
in my recent Declare AutumnFinance Minister Jeremy Hunt announced that the government will require more than 600,000 recipients of Universal Credit – a vehicle-tested social security payment for low-income or unemployed households – to meet a “job coach”. ” to set up a plan to increase hours and income.
Hunt also announced a review of issues preventing re-entry into the labor market and pledged £280 million ($340.3 million) to “eliminate fraud and benefits errors” over two years. next.
While the pandemic has exacerbated the health crisis that has left holes in the UK economy, the rise in long-term sickness claims really started in 2019 and economists recognize see a number of possible reasons this country is vulnerable.
Portes suggests that the government’s austerity policies – a decade of drastic public spending cuts implemented after former Prime Minister David Cameron took office in 2010 and aimed at reining in the national debt – had an important part in getting the UK exposed.
“The UK is particularly vulnerable to austerity – NHS waiting lists skyrocketed and performance/satisfaction plummeted, just before the pandemic,” Portes said.
“And support for the disabled and disability benefits dried up in the early 2010s. More broadly, austerity has led to markedly disparate health outcomes across the board. income/class.”
Inequality and growing wait lists
That’s shown in the country data: The ONS estimates that between 2018 and 2020, men living in the most deprived areas of Britain live 9.7 years less on average than those in the region. least deprived, with a gap of 7.9 years for women.
The ONS noted that both sexes saw a “statistically significant increase in life expectancy at birth inequality between 2015 and 2017.”
In the aftermath of the pandemic, the NHS waiting list has grown at its fastest rate since filings began in August 2007, a recent report by the House of Commons has highlighted, with more than 7 million patients on a waiting list to receive treatment at a consultant-led hospital in the UK as of September .
However, the report notes that this is not a recent phenomenon and that the waiting list has been growing rapidly since 2012.
“Prior to the pandemic, in December 2019, the waiting list was over 4.5 million – nearly two million more than in December 2012, a 74% increase,” it said.
“In other words, while the increase in waiting lists was accelerated by the pandemic, it also took place several years before the pandemic.”
Former Bank of England policymaker Michael Saunders, now a senior policy adviser at Oxford Economics, also told CNBC that the UK has been particularly hard hit by Covid in terms of severity and some of this may be the result of the country raising interest in pre-existing health conditions – such as obesity – that may have been exacerbated by Covid.
“The UK is a relatively unequal country, so that could be part of the reason why even if we had the same Covid wave as other countries we could have a big impact. than for public health, because if you want to, you’ll have a bigger wave.” who will be hardest hit by it,” he added.
Saunders suggested that any growth strategy from the government should include measures to address these health care challenges, which are now inseparable from labor participation rates and the broader economy.
“It’s not just a health issue, it’s an economic one. It’s important both ways. I think it’s important enough as a health issue, but it’s also of particular importance. more distinct because of the effects on potential output, which then lead to other economic problems.”
