There has been a huge collapse in the economic activity rate for working age men in the UK, which has gone completely unnoticed – perhaps because it has happened over such a long period.
Reports from the Office for National Statistics of an all-time record in the UK employment rate during the fourth quarter of 2019 are wholly misleading. The percentage increase, such as it is, has been mainly due to continued recovery back to pre-recession participation rates, an increase in female employment (primarily due to their later retirement) and seasonal adjustments. The “record highs” for new jobs result from an increase in the UK working population and not a sign of any improved economic health. What employment growth there has been owes more to a decline in wage inflation – down from 4% in Q2 2019 to 2.8% in Q4 2019.
But at the heart of these employment trends, and what all these figures hide, is a serious problem concerning economic inactivity rates for men aged 16-64 (see figure 3). Back in Q1 1971 this was just 4.9%, then progressively it rose to 23.6% by Q1 2010 – after which it has largely levelled off. Men are losing out, whilst women are reducing their inactivity rates. Whether these two trends are linked is open to debate, but should not be ignored.
It is also important to point out that this trend in economic activity rates for men is quite distinct from their level of unemployment. The latter reflects the proportion of the working population who are registered and actively seeking work. Many of those not in this bracket are discouraged workers who have given up their job search activity altogether.
Commenting on these statistics, the Secretary-General of the Federation of International Employers (FedEE), Robin Chater, has underlined that “although policy makers have fixed their sights on the equal pay gap, they have missed the fact that women are getting jobs at a much higher rate than men. Controversial as it may be to say – the greater wage competitiveness of women, their more relevant skills and greater job flexibility could be contributing to the inactivity of men. Moreover, the combined impact of automation and a post-Brexit economic decline is likely to push this male inactivity rate still higher. Many UK men in work are probably now living in the lull before what could well become a perfect storm.“