Institute for Employment Studies says UK has 800,000 fewer people in work or looking for work since before Covid
he UK has suffered the biggest contraction in its workforce since the 1980s, costing the public finances at least £16bn a year in lost tax receipts, according to a study.
Hundreds of thousands of people have quit the labour market since the pandemic and never returned, undermining the strength of the economy and leaving the government out of pocket, according to the Institute for Employment Studies.
The “participation crisis” is shown by the 1.5 percentage-point fall in the share of people aged 16 and over either in work or looking for work since the eve of the pandemic – equivalent to about 800,000 fewer people in the labour force and representing twice the contraction seen after the 2008 financial crisis.
Had the UK maintained the same proportion of the population in a job as there were before the pandemic, the economy would be £25bn larger and thousands more workers would be paying tax, equating to £16bn in extra tax receipts.
Ah Covid, the pandemic that keeps on giving. Absenteeism from school is at an all-time high, as are marriage breakups. The ripples of the pandemic continue their grim pulse.
As you may know, Northern Ireland has the highest economic inactivity rate in the UK. There can be good reasons for this, such as high sickness levels. But we have a perverse situation where we basically have full employment but also a record number of people not working. But I have full confidence in Stormont to solve that riddle right after they fix the health service.
I help to manage Slugger by taking care of the site as well as running our live events. My background is in business, marketing and IT. My politics tend towards middle-of-the-road pragmatism, I am not a member of any political party. Oddly for a member of the Slugger team, I am not that interested in daily politics, preferring to write about big ideas in society. When not stuck in front of a screen, I am a parkrun Run Director.
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