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The impact of unemployment has been more severe than the headline statistics suggest, says CIPD

David Woods , 25 Jan 2010

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Despite official figures due to be released this week likely to show that the UK economy is growing again, the CIPD has found the impact of the recession on the UK workforce has been much deeper than the headline employment and unemployment figures indicate.

According to the CIPD, 1.31 million people were made redundant during the recession - double the net fall in employment and equivalent to 4.4% of people in work before the downturn.

It also reports there were 6.2 million fresh claims for Jobseekers Allowance between April 2008 and November 2009 - 7.5 times the rise in the unemployment claimant count during the recession, highlighting the degree to which many people are struggling to find permanent jobs.

And two thirds of people made redundant during the recession who subsequently found work were paid less in their new job. The average pay penalty was 28%.
 
John Philpott, chief economic adviser at the CIPD, said: "Although the scale of job loss in the recession is much less than originally feared and much less than might have been expected given the scale of the contraction in the economy, it is evident that the direct experience of redundancy, repeat spells of unemployment and pay penalties has nonetheless been widespread.

Further reading

"Moreover, given that redundancy also affects the families, friends and former colleagues of those made redundant, the full experience of the jobs recession has been wider still. This is likely to have a much greater impact on perceptions of job security and consumer confidence during the recovery than the simple ‘unemployment situation is better than feared' story of the moment would suggest."   

 

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