Belfast Telegraph

Northern Ireland's workforce is shrinking

Numbers opting out of the labour market rises as jobless rate falls

BY MARGARET CANNING

Northern Ireland's economic inactivity rate has been fuelled by a leap in the number of people looking after their homes and families – despite a chink of light from a fall in overall unemployment.

The number of people aged between 16 and 64 who were economically inactive grew by 10,000 to 328,000 over April, May and June, according to the Government's Labour Force Survey.

That left Northern Ireland with an inactivity rate of 28.2% – above the UK average of 22.3%, and the highest of 12 UK regions.

The Labour Force Survey looked at 2,500 households.

People are classed as economically inactive if they haven't worked in the last four weeks, aren't claiming unemployment benefits and will not be seeking work in the next two weeks.

Some of them may want to find work but will be unable to due to other demands on their time, such as looking after relatives.

Including the over-64s, there were 568,000 economically inactive people.

Among those of working age who said they did not want to work, there were 64,000 who were looking after the family home or their children. That was an increase of 8,000 on the same period last year and a jump of 5,000 on the previous quarter.

Pip Jaffa, chief executive of family support group Parenting NI, said financial circumstances were resulting in tough decisions for parents: "I know anecdotally that for parents it can be a big decision as to whether to go out to work and manage increasing childcare costs, or stay at home."

Many parents were also fully reliant on the help of grandparents, who were in turn passing up opportunities for paid work in favour of helping to help their children out.

"If grandparents weren't able to do that, that would surely impact on the parents' ability to work," Ms Jaffa added.

There were 69,000 people who could not work because of long-term illness, up from 63,000 on the previous quarter – though down 2,000 on April to June 2012.

There was better news in unemployment, with the overall rate falling 0.7% between April and June to 7.5%, lower than the UK average (7.8%).

There was also a fall in the number of claimants of unemployment benefits, with figures for July showing 62,400 people on the dole, down 500 on June. That contributed towards a total fall of 2,500 in the last six months.

But Ulster Bank chief economist Richard Ramsey (below) said the improvements were "less dramatic" than they seemed at first.

"For the most part, the latest quarterly decline in the unemployment rate was due to a rise in economic inactivity rather than growth in employment," he said.

However, Mr Ramsey summed up the unemployment figures as showing "modest improvement".

"This adds to the mounting evidence that an economic recovery is taking hold in Northern Ireland.

"The challenge for Northern Ireland remains lowering the unemployment rate through significant job creation rather than through rising economic inactivity and outward migration."

While the overall dole queue was smaller, people were stuck in the dole queue for longer. Around 54% have been unemployed for over a year, up 9.9% on last year.

BACKGROUND

Northern Ireland has had the highest levels of economic inactivity in the UK for several years. The rate monitors people who are not in paid work but are not claiming unemployment benefits. According to the Labour Force Survey, 29% of the economically inactive of working age were students; 25% were sick/ disabled; 24% were looking after the family/home; 13% were retired and 8% cited other reasons. Economic inactivity in Northern Ireland peaked at 29.5% in 2009.

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