Coronavirus: labour market October 2021 update

Published 12/10/2021   |   Last Updated 12/10/2021   |   Reading Time minutes

Have official statistics started to reflect the impact of coronavirus on the labour market?

Each month the Office for National Statistics (ONS) publishes estimates of employment and unemployment rates. These estimates are based on information collected by the Labour Force Survey (LFS) for the preceding three-month period. The time lag to these figures means that the latest labour market release published on 12 October 2021 provides information from June 2021 to August 2021.

The Coronavirus Job Retention Scheme ended on 30 September 2021. However the October LFS figures do not reflect the number of people who have been placed on furlough due to coronavirus.

The latest HMRC statistics on the Coronavirus Job Retention Scheme (CJRS) show 46,000 employments in Wales have been furloughed as at 31 August 2021. This represents a take up rate of 4%. 21,600 females and 24,500 males were furloughed under the CJRS in Wales as at 31 August 2021.

What do the latest Labour Force Survey figures show?

The Labour Force Survey (LFS) is a quarterly household survey of around 80,000 adults. The survey asks a range of questions on employment and the labour market. As people were still furloughed in June 2021 to August 2021 this doesn’t reflect the full impact of coronavirus on the labour market in Wales.

ONS explains they have made changes to the LFS:

Labour Force Survey (LFS) responses have been reweighted to new populations derived using growth rates from HM Revenue and Customs (HMRC) Real Time Information (RTI), to allow for different trends during the coronavirus (COVID-19) pandemic. The reweighting will give improved estimates of both rates and levels.

For June to August 2021 the unemployment rate for people aged 16+ in Wales was 4.0%, slightly higher than 3.9% in the previous quarter (March 2021 to May 2021). This is an increase of 4,000 people from the previous quarter to 63,000.

Headline statistics June 2021 to August 2021 compared to the previous quarter March 2021 to May 2021. The 16+ unemployment rate is 4.0% with 63,000 people unemployed, an increase of 4,000 from the previous quarter. The 16-64 employment rate is 74.2%. 1,490,000 people aged 16+ employed, an increase of 25,000 from the previous quarter. The 16-64 economic inactivity rate is 22.6% with 428,000 people economically active, a decrease of 15,000 on the previous quarter.

Source: ONS, Regional labour market: Headline indicators for Wales

The unemployment rate in Wales (4.0%) is lower than England (4.5%), Scotland (4.4%) and Northern Ireland (4.1%).

Percentage of people aged 16+ who are unemployed, UK nations; June 2016 – August 2016 to June 2021 - August 2021.

Line graph of age 16+ unemployment rates for Wales, England, Scotland and Northern Ireland. All show an overall decrease to under 4% in 2019. This was followed by a sharp overall increase since the beginning of 2020. Wales and Northern Ireland have seen an increase in the last quarter. Current figures are stated above.

Source: ONS, Labour market in the regions of the UK: October 2021

Data from the LFS is available showing the unemployment rate by sex and age for 12 months to June 2021. The latest data shows unemployment rates decrease with age for both males and females. In all the age groups males have higher unemployment rates than females.

Unemployment rate by age and sex in Wales; 12 months to June 2021

Males aged 16-24 have an unemployment rate of 13.2% compared to 10.8% for females. Males aged 25-49 have an unemployment rate of 3.8% compared to 3.1% for females. Males aged 50-64 have an unemployment rate of 3.3% compared to 2.7% for females.

Unemployment data is also available by parliamentary constituency. The map below shows for the 12 months to June 2021. Swansea West had the highest rate (8.3%) and Aberconwy and Islwyn the lowest rates (1.8%).

Note: The sample sizes in Clwyd West and Cardiff Central are too small to provide estimates.

Are there other data we can use to see the impact of coronavirus on the labour market in Wales?

Claimant count figures are published monthly and are more timely. However, people in work can also be eligible for Universal Credit and included in the claimant count. ONS states;

As part of the response to the pandemic, the rules about who can claim Universal Credit have changed, meaning an increased proportion of those claiming may actually still be in some kind of work. Because of these reasons, the change in the claimant count almost certainly ends up overstating any underlying change in unemployment.

ONS has also been working with HMRC to produce estimates of employees being paid through the PAYE system. The PAYE seasonally adjusted data for September 2021 (1,274,389) shows the number of payrolled employees in Wales is above the number in February 2020. There was an increase of 6,350 payrolled employees between August and September 2021.

Claimant count - seasonally adjusted

ONS publishes an experimental series counting the number of people claiming Jobseeker's Allowance plus those who claim Universal Credit and are required to seek work and be available for work. This replaces the number of people claiming Jobseeker's Allowance as the headline indicator of the number of people claiming benefits principally for the reason of being unemployed. The latest data for September 2021 show that the Wales claimant count went up from 59,173 in March 2020 to 119,232 in August 2020, then decreasing to 86,935 in September 2021.

Claimant count for Wales; September 2019 to September 2021

graph showing the Wales claimant count went up from 59,173 in March 2020 to 119,232 in August 2020, then decreasing to 86,935 in September 2021.

Source, NOMIS, ONS Claimant Count – seasonally adjusted

Notes: From May 2013 onwards these figures are considered Experimental Statistics. Under Universal Credit a broader span of claimants are required to look for work than under Jobseeker's Allowance. As Universal Credit Full Service is rolled out in particular areas, the number of people recorded as being on the Claimant Count is likely to rise. Rates for regions and countries from 2018 onwards are calculated using the mid-2018 resident population aged 16-64.

Definitions

The number of unemployed people in the UK includes people who meet the definition of unemployment specified by the International Labour Organisation (ILO). The ILO defines unemployed people as being:

  • without a job, have been actively seeking work in the past four weeks and are available to start work in the next two weeks
  • out of work, have found a job and are waiting to start it in the next two weeks

Employment measures the number of people aged 16 years and over in paid work. The headline measure of employment for the UK is the employment rate for those aged from 16 to 64 years.

The headline measure of inactivity for the UK is the rate of those aged from 16 to 64 without a job who have not sought work in the last four weeks and/or are not available to start work in the next two weeks.


Article by Joe Wilkes and Helen Jones, Senedd Research, Welsh Parliament