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Where is the highest unemployment rate in the UK?

UK’s labour market has its regional differences in terms of employment rate, economic inactivity rate, and unemployment rate. Such differences are present in almost any country of the world. They showcase the complexity of the issue and the specifics of each particular region.
In this article, we’ll review statistics on unemployment trends in the UK and the reasons behind them.

Spotlight on Regions with High Unemployment Rate

No labour market is homogeneous. The data from the Office for National Statistics and information from the labour force survey show that the regional disparities of the UK labour market have their trends.

The latest report by the Office for National Statistics comes with such highlights as:

  • By the end of 2023 (the last three months of the period), the region with the highest employment rate was the South East with 79.6%;
  • The lowest employment rate was registered in the Northern Ireland, with 71.1%;
  • At the same time, the North West had the highest unemployment rate at the end of 2023 – 5.3%;
  • The lowest unemployment rate was in Northern Ireland, with 2.7%;
  • The most significant increase in employment happened in the North East, with 2.7 percentage points;
  • The North West experienced the highest increase in the unemployment rate with 1.8 percentage points.

Answering the main question – the North West is the region with the highest number of unemployed people. And it is a growing trend based on the published statistics because the rate has increased compared to the same period the previous year.

Understanding the Regional Disparities

When it comes to national statistics or any labour force survey, it is essential to correctly interpret the data and figures. It is never as simple as figuring out what region has the highest unemployment rate. One needs to account for economically active populations, seasonally adjusted numbers, labour market trends, and other signifiers to understand the picture.

For example, Northern Ireland had the lowest employment rate among all regions at the end of 2023. Yet, it doesn’t mean there are more unemployed people there. Northern Ireland scored the lowest unemployment rate at the same time. The reason is the number of economically active population of the region. The region has the highest economic inactivity rate, at 26.9%.

According to the labour market statistics, one might think it is not the best among UK regions in terms of finding a job. However, this is quite the opposite.

Factors Contributing to the Localized Labour Market

The overall UK unemployment rate is 4.3%, according to the Office for National Statistics as of the end of 2023. Although this figure is slightly higher than at the end of 2022, it is lower than in many other European countries. This number is helpful for comparison with specific regions to understand the disparities.

At the same time, it is vital to acknowledge factors that contribute to labour market differences in the UK regions and countries. The National Statistics data signifies such factors in this process:

  • Highest unemployment numbers among young people, specifically 16+ group of citizens;
  • The decline in employment rates has continued since the economic recession in 2008. The process was affected by the COVID-19 pandemic as well;
  • Immigration affects these figures, particularly in low-skilled positions;
  • Economic inactivity among citizens;
  • Industries that are represented in specific regions. Some might be seasonally adjusted, for instance;
  • Gender and ethnicity. There is a higher number of unemployed people among ethnic minorities. At the same time, white citizens experience the lowest jobless numbers;
  • Government policies, local authorities and their policies, taxation, welfare benefits, and labour market regulations.

For example, if one region has a significant population of a specific ethnic group, it might impact the statistics as ethnicity contributes to employment opportunities. Or if a region has a lot of seasonal positions, the rates might be different in specific periods of the year.

Figures represent different trends. Consider the higher rates of unemployed citizens among young adults. The reasons might include a lack of work experience and heightened competition in entry-level positions. Lack of professional education also decreases the opportunities for young adults to find a job.

At the same time, a local authority might introduce specific programs and policies that help to solve the issues. The ONS website gives a lot of data in terms of UK countries, but interpretation is usually more complex than just naming figures.

National Statistics on Unemployment by Region UK

The Office for National Statistics offers the following data on this matter by UK region:

  • The overall rate for the UK is 4.3%;
  • Great Britain – 4.3%;
  • England – 4.3%;
  • North East – 5.2%;
  • North West – 5.3%;
  • Yorkshire and the Humber – 2.9%;
  • East Midlands – 4.1%;
  • West Midlands – 5%;
  • East – 4.3%;
  • London – 4.8%;
  • South East – 3.9%;
  • South West – 3.6%;
  • Wales – 3.8%;
  • Scotland – 4.3%;
  • Northern Ireland – 2.7%.

The labour force survey concerns citizens from 16 to 64 – employed, unemployed, and inactive. It is important to note that the Office for National Statistics estimations are subject to sampling variability.

Analyzing Urban Employment Trends

Every annual population survey showcases differences in urban and rural areas and labour market statistics. It concerns the represented industries, companies, and population density. That’s why it is essential to evaluate the economic activity of such regions separately.

Unemployment Challenges in Metropolitan Areas

The metropolitan areas come with their own set of challenges for job seekers. First of all, the density of the population creates more competition for almost any job.

Many professionals, especially younger ones, come to big cities to find a job. Thus, the number of job seekers is usually higher than in rural areas. Also, research shows that it might be harder to start a business in metropolitan areas due to several reasons, such as shortage of finances, lack of proper training, lack of equipment, no license, problems with finding a place to work, etc.

In terms of employment difficulties, citizens usually name such factors as:

  • Lack of job opportunities;
  • Lack of training;
  • In the ability to find a job in their profession;
  • Lack of professional experience;
  • Distance issues (not willing to commit to long commuting or travel time to a workplace);
  • Low payments;
  • Unsatisfactory work environment.

Rural Areas and Employment Dynamics

Rural areas of UK regions have issues different from metropolitan ones. Although the competition for a job is usually less here, the number of openings and positions is also lower.

There is also a lack of diversity in industries and professions. One can find openings in almost any sphere in London, which cannot be said about rural areas.

Unique Factors Affecting Rural Unemployment

So, what are the factors that affect rural UK regions? The main ones are as follows:

  • Lower wages than in metropolitan areas for the same jobs;
  • Decreased number of job opportunities and lack of diversity in job offers;
  • The declining importance of primary activities in rural areas, like agriculture, contributes to decreased economic activity;
  • There is a prevalence of small businesses that employ less people than bigger companies;
  • Less entrepreneurial dynamics and lack of governmental policies to help poverty-stricken rural communities of the UK.

It is important to also note the lack of public transport, affordable food options, and seasonal employment patterns.

Strategies for Addressing Rural Joblessness

There is a strong need for governmental and local policies to fight poverty and joblessness in rural areas. The issues of transportation, poor mobile coverage, and access to digital means should be addressed. A local authority can implement training programs or initiatives to help people find jobs.

It is also vital to account for the local specifics of each area. Different English regions come with their struggles in terms of prices, taxes, housing, jobs, and climate.

Demographic Impact on Unemployment

Regarding demographics, the National Statistics ONS website also provides a lot of interesting data. As mentioned above, the white population has the lowest number of unemployed citizens. There is a big problem with youth employment, especially if the citizens come from any ethnic group besides White.

Youth Unemployment Concerns

Young citizens seeking work were not as successful as older population groups. This trend has remained strong for several years. The main reason is lack of experience and education. There are a lot of young people looking for entry-level jobs. It creates a higher competition for this age group to get into the labour market and get work experience.

Also, immigration impacted the availability of low-skilled positions, the ones many youth aimed at.

According to the labour market statistics, 11% of all economically active citizens from 16 to 24 could not find a job. For comparison, the other age groups experience significantly fewer problems with 3-4% unemployment rates.

In terms of ethnicity, the labour market statistics show the following unemployment proportion for economically active people aged 16 and up 24:

  • Asian – 18%;
  • Indian – 12%;
  • Pakistani, Bangladeshi – 20%;
  • Other Asian – 21%;
  • Black – 20%;
  • Mixed – 14%;
  • White – 9%;
  • White British – 9%;
  • Other White – 11%;
  • Other – 24%.

Gender Disparities in the Labour Market

In terms of gender disparities, the labour market statistics look fairer. The overall rate was 4%, both for men and women. However, if you closely examine the annual population survey and add ethnicity into the comparison, there are some slight differences.

The proportion of unemployed men based on ethnicity is as follows:

  • Asian – 6%;
  • Indian – 3%;
  • Pakistani, Bangladeshi – 7%;
  • Other Asian – 8%;
  • Black – 6%;
  • Mixed – 7%;
  • White – 3%;
  • White British – 3%;
  • Other White – 3%;
  • Other – 5%.

The proportion of jobless women based on the ethnic group:

  • Asian – 7%;
  • Indian – 5%;
  • Pakistani, Bangladeshi – 11%;
  • Other Asian – 6%;
  • Black – 8%;
  • Mixed – 6%;
  • White – 3%;
  • White British – 3%;
  • Other White – 3%;
  • Other – 7%.

Government Initiatives and Programs

Role of Government in Reducing Unemployment

The International Labour Organization published a document on countering unemployment in the UK. It analyzes the trends and statistics from the 1970s to the middle of the 1990s, along with governmental policies. Although a significant period has passed, it is an interesting insight into the effectiveness of specific initiatives from a historical perspective.

The summary explains that joblessness and long-term unemployment are seen as detrimental to an individual career and future. The main downfalls of the governmental initiatives for this period are:

  • The school-to-work transition route couldn’t keep up with trends in education and the reduction in manual labour opportunities;
  • The trade union membership reduction;
  • The inability to stay on top of the changing need for different skills.

However, the were also some effective measures as well. For instance, the introduction of MSC positively impacted countering joblessness. Although not all initiatives were highly prolific, the sudden change created positive dynamics in the country’s labour market statistics.

Policies in youth employment by MSC were successful despite the government’s initial resistance to financing them. A considerable role played by local authority and acceptance of programs on a local level, not only on the country scale.

Effectiveness of Existing Programs

One of the most effective programs currently is the introduction of apprenticeships. During the height of the COVID-19 pandemic, policies like emergency employment and income support helped millions of people in the UK.

The same goes for the SEISS initiative. At the same time, there is a lack of success in fighting the geographical immobility of labour and the encouragement of entrepreneurship in specific regions.

Summary

National statistics are a crucial source of data. Its quarterly reports give a lot of insight into trends and specifics. However, it is vital to consider the bigger picture due to sampling variability and limitations of three-monthly figures.

New figures suggest that the UK regions and countries have almost recovered from the COVID-19 pandemic regarding job opportunities. Yet, there are still a lot of issues in this area that need to be addressed on the national and local levels.

Where is the highest unemployment rate in the UK?
Date: 15 February 2024
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