Already it has been revealed that those who have had benefits sanctioned are not included in the Claimant Count. Now it appears, thanks to some sterling work by consent.me.uk, that those on workfare are counted as employed by the Labour Force Survey, the other measure used to calculate unemployment.
This follows revelations in the Daily Telegraph that a significant number of those ‘employed’ according to the Labour Force Survey guidelines, are actually on Government training schemes.
The Claimant Count and the Labour Force Survey are the two measures of unemployment. The Labour Force Survey is based on a survey of 45,000 households. The claimant count means all those currently claiming Job Seekers Allowance and no-one else. It does not include those sanctioned and neither does it include those on sickness benefits and found fit for ‘some’ work and placed in the Work Related Activity group (WRAG).
Both of these measures of unemployment fell in the last months figures. Both of these figures are vulnerable to misinterpretation about the true numbers of unemployed people. The Claimant Count does not include possibly tens of thousands of people sanctioned each month. The Labour Force Survey does not include people on workfare.
The Government claim they don’t know exactly how many people are on workfare, however all the indications suggest the number is rising. Over two thousand people are referred to Mandatory Work Activity on a monthly basis. Approaching eight thousand young people currently start on Work Experience or other workfare schemes each month. Over half a million people are currently on the Work Programme, which can include up to six months workfare. The rise in workfare is clearly one significant factor in the supposed fall in unemployment.
Similarly the number of people facing benefit sanctions has almost trebled since 2009 to approaching half a million annually. Again, a rise in the number of sanctions handed out could easily outstrip the recent modest fall in the Claimant Count.*
Even without the huge increase in people claiming Working Tax Credit as self-employed, or on zero hours contracts, or in unstable and irregular casual work, both measures of unemployment appear highly vulnerable to policy changes at the DWP. This helps explains the discrepancy of falling economic growth and falling unemployment.
If more people are sent on workfare, and more people face having claims sanctioned then both measures of unemployment will fall. Since more people are being sent on workfare, and more people are having benefits sanctioned, unemployment is falling.
Correction 17/10/12: Recent information from the ONS suggests some people who are sanctioned may be included in the Claimant Count. It depends whether the claim remains live, many do not. Am waiting on further information from the ONS and will clarify in a later piece. Details of sanctioned claimants in relation to the LFS is below.
*The Labour Force Survey does not mention sanctions. It is possible that some of those sanctioned would not be classed as unemployed – it seems that it would be based on the answers given to questions relating to job seeking activity. Therefore those sanctioned may also place downward pressure on this measure of unemployment.