Unravelling the Mystery of Falling Unemployment Figures

Another day brings yet another tantrum from the hapless Work and Pensions Secretary Iain Duncan Smith.  This time it’s the BBC who are the subject of his potty mouth, with his claim that journalist Stephanie Flanders is ‘peeing all over the economy’ for discussing the strange discrepancy between a nose diving economy and apparent falling unemployment.

IDS appears to think that state TV should ignore this much discussed phenomena and instead broadcast announcements proclaiming what a wonderful job our glorious leaders are doing.  Unfortunately for ministers balanced journalism doesn’t quite work like that.

The truth is that it doesn’t take much digging into the recent unemployment figures to discover that the situation is far from rosy.  The staggering rise in self-employment – 218,000 self employed workers on the year – seems to be one explanation for the fall in unemployment.  Combined with the growth in part time work, this explains much of the economic anomaly which seems to be taking place.

On it’s own, a rise in casual, part time and self employed work still doesn’t fully explain what’s going on.  The Office for National Statistics (ONS) still maintain that the number of total hours worked over the economy rose by 0.5%, meaning that even if people are pushed into insecure and casual work, the actual amount of work being done in the UK is still rising.

This still flies in the face of the plummeting growth figures.  To understand why this is happening requires something few economists and journalists possess – an understanding of the benefits system, and in this case Working Tax Credits.

To qualify for the self-employed element of Working Tax Credits, a claimant  must declare that they are working at least 30 hours a week.   This does not mean that they are earning even minimum wage for those hours.  They could be earning nothing at all.  Those on low (or no) incomes as self-employed workers will be recorded in the statistics as working 30 hours a week. So whilst the recent figures show a small rise in the numbers of hours worked, this doesn’t mean that people are actually getting paid for those hours.

Given the huge leap in those now registered as self-employed, and the relatively small rise in hours worked across the economy, this is perhaps enough to reveal that whilst people may be working more hours (on paper at least) they aren’t any better off.

The number of people without children claiming Working Tax Credits under the 30 hour rule has almost doubled since 2004 and is still rising.  There is even anecdotal evidence that Work Programme providers – the grasping poverty pimps paid billions by the Government to get people into work – are bullying unemployed claimants off the dole and onto Working Tax Credits.

This dovetails with the growth in people who are in work, or self-employed, and claiming Housing Benefits – a benefit based on income rather than hours worked.  The latest DWP Statistical bulletin shows a rise in Housing Benefit claims of around 20,000 people between April 2011 and April 2012*.  Whilst this does not represent a huge leap it must be weighed against the far stricter criteria for the benefit.

So whilst the number of people who are ‘unemployed’ is claimed to be falling, the number of people claiming income related benefits appears to be rising.

There are two figures which are key in understanding levels of unemployment.  The headline figure, which states that there are currently 2.56 million unemployed people, is based on the Labour Force Survey.  This is a large scale household survey using internationally recognised measures of estimating  unemployment and is carried out by the ONS.  The second is the Claimant Count.  This is compiled by the ONS from data provided by the DWP and represents the number of people claiming the unemployment benefit Job Seekers Allowance.

Whilst unemployment according to the Labour Force Survey has steadily fallen over the last few months, in part because of the reasons given above, the Claimant Count figures have bounced around, although the number fell last month.

For the last year the Government have been claiming this is down to the changes made to sickness, disability and lone parent benefits.  The argument is that many who were previously claiming Incapacity Benefits or Income Support will now be on Job Seekers Allowance and included in the claimant count.  As ever the Government’s claims hold little water once the numbers are crunched.

The number of people claiming sickness benefits (Incapacity Benefit or Employment Support Allowance) fell by just 21,000 between February 2011 and February 2012.  The number of those claiming lone parent benefits dropped by 30,000 in the same period.    Many of these people will not have then been eligible for Job Seekers Allowance.  Even if they were then it would only represent about 4000 people a month – the true figure is probably half that.  What can’t be hidden is that the number of working age benefit claimants in total rose by 117,000 between February 2011 and 2012.

It’s clear that changes in benefit eligibility criteria have had only a negligible impact on the claimant count.  There is one factor however which has skewed the figures considerably.

Over half a million benefit sanctions were handed to Job Seekers Allowance claimants in 2011 and the figure is believed to be rising.  This represents a tripling in the number of claimants who have had benefits stopped since 2009.  The ONS recently confirmed to me that those sanctioned are often not included in the Claimant Count – it depends on whether a claim is maintained throughout the sanction, which in many cases it isn’t.  With sanctions lasting anywhere between two weeks and six months, this is enough to skew the count by tens of thousands of people every month.  Other people are ‘disallowed’ benefits because they are judged to have given up a job voluntarily, or failed to meet JSA eligibility.  It almost renders the Claimant Count worthless, as it tells us far more about the current sanctioning policy in Jobcentres than it does about the true number of unemployed people.

Economic editors at the BBC and elsewhere have rightly focused on the rise in temporary jobs due to the Olympics, the rise in part time work, or zero hours contracts, as some of the factors behind falling unemployment.  All of these will no doubt have made an impact.

But almost a quarter of a million more people on Working Tax Credit (but not necessarily earning anything) and half a million benefit sanctions tells us far more.  Unemployment is not falling as Iain Duncan Smith claims.  The growth in hours worked has more to do with reporting requirements for working tax credits than it does with any genuine improvement in the labour market.  Sanctions grossly distort true  numbers of unemployed benefit claimants.  The number of people claiming Housing Benefit and Working Tax Credits is rising, despite stricter eligibility for these benefits.

And once again, even this month, those who have been unemployed for over a year rose, despite over half a billion handed out to welfare to work companies with the aim of cutting long term unemployment.

This Government’s policies are not working.  And no matter how they try and cook the books, neither are an increasing number of people.

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.

*Unfortunately there is a lag in Housing Benefit, sickness benefit and lone parent benefit statistics which are now only to be published quarterly.  Therefore the most recent figures are not available and won’t be until November. The most recently published figures are at (PDF): http://statistics.dwp.gov.uk/asd/asd1/stats_summary/stats_summary_aug12.pdf

45 responses to “Unravelling the Mystery of Falling Unemployment Figures

  1. On the link it says the number of people claiming ESA is 2.56 million exactly the same as the recent jobless total. Something smells fishy could it be Grayling?

  2. Been sanctioned myself. No real communication from JC+ or Work Programme about it, waiting for my bank statement to know if I can afford to go in for their endless appointments and courses. As someone on the Work Programme getting them off my back for a year by going onto working tax credits, by trying to start a business seems quite appealing to me.

  3. money isn't real

    I wish I could remember where, but I was recently reading something about fascisms obsession with bodily fluids. Amy ideas Johnny?

    Anytime there is a controversial protest they always claim that people were throwing faeces/urine at the police.

    Now according to IDS the BBC have some kind of Ur-Woman straddling the whole of an economy happily pissing away?

    What a sad repressed little man he is.

  4. Is it worth campaigning to get the sanctioned count released alongside the claimant count? As you rightly say, removing claimants from the claimant count through sanctions distorts the count.

  5. Christian Garland

    This was in response to Dunacn Smith complaining of BBC ‘bias’.

    Duncan Smith, what a prick: the media and the BBC are, and always have been extremely good at toeing the line; they do not ever present or allow anything approaching alternative let alone critical voices, so the Daily Fail’s long-running fantasy that it is ‘socialist’ is pretty funny.

    ‘Sought every little bit of bad news’ on jobs? So not at all like he and his party (and every other one vying for power) does when selectively presenting information, to use every bit of (non) information and making it appear either much better or much worse than it actually is? ‘Last month, there was a marginal rise in youth unemployment so they centred on that.’ Yes, good…Not that ‘they’ were exactly calling the cooked statistical books into question. The fact that besides the 2.5 million+ unemployed, a figure that is more like 6-7 million, – all of whom are of course, ‘lazy-feckless-workshy-scroung​ers’ don’t forget – there are all those other claimants who have the temerity to be sick, disabled, or terminally ill, so the (selectively) quoted figures are fucking meaningless anyway. ‘They had popped those words into her mouth. They had come in and said “let’s just sit on this and flatten it”. If the unemployment figures had gone up, we would have been on the BBC TV News at Six and Ten and would have got the blame.’ Well there you are you see…not at all like a Tory (or Lib Dem, or Labour) policy hack issuing a laundered press release steeped in bogus positivity, is it?

    ‘This time it came down so they cast doubt on the figures. [Flanders] said it could be industry is so bad they have to take on two people where one person could do the job.’ What? ‘Have to’…So like claimants having to work unpaid or ‘prove’ they are entitled to derisory benefits? I mean, since we’re talking compulsion here…Good example of what I mean about the media being the lapdogs of the rich and powerful: one of the main reasons why there is a chronic problem of not just unemployment, but underemployment, is because bosses don’t want to pay full-time wages, or ‘create jobs’, so Flanders’ far-from-radical standpoint could easily mean she is suggesting employers become ‘leaner’, cut costs to boost revenues, and employ fewer, thus more people forced onto JSA, even fewer job ‘opportunities’, and so even more cutthroat competition for the few remaining jobs that exist – set against the punitive workfare regime. What was that about the socialist BBC being anti-government?

    This old-school crap is vintage too: ‘Our [check the patriotic/nationalist subtext] private industry is unbelievably robust compared to much of Europe.’ Yes, because it has those famously ‘flexible’ labour markets, where bosses can hire and fire at will, unlike mainland Europe, where a modicum of collective action at the point of production is still (just) possible – seriously, why do you think the bourgeoisie of all Europe, in fact the entire world, rushes to London?

  6. He looks like, well a new name, “Duncula Smith” He has the fangs but normally smiles for the camera.

  7. Incidentally, single parents are eligable for WTC so long as they work at least 16 hours a week. Although it often has no fincancial benefits, for many single parents becoming ‘self employed’ for 16 hours a week is far preferable to the whole JSA/Work Programme nightmare.

  8. Andrew Coates Old Grannie

    Bleeding filth that he is IBS looks like the bleeding Devil in the pic… bleeding filth. Now… where did I put me bleeding teef…

  9. This is why they are changing the criteria for Working Tax Credits where under Universal Credit anybody self-employed will be assumed to be earning the minimum wage. The bastards have got your every which way.

  10. Ian Duncan Smith is a Cunt

    Fuck this Nazi bastard!

  11. Reblogged this on dogsharon and commented:
    IDS – the new Christopher Lee…

  12. I’m just waiting for some daft cunt to tell me that the ceo of Atos & In Da Shit are not Nazis. They are. And if people try to tell you they’re not then they are Nazis, too

  13. Part Two

  14. Work Programme providers are actively pushing people down the self-employed route, knowing that very little actual work exists, but former JSA claimants can then claim Working Tax Credits, the WP provider can claim thousands in sustainable employment handouts, and the government can claim lower unemployment figures … While in reality for the unemployed, nothing has changed.

  15. Andrew Coates Old Grannie

    Ian Duncan Smith is bleeding filth. Now… where did I put me bleeding teef…

  16. United StereoTypes of Unemployment (U.S.T.U)

    What are Work Programme participants tagged as? Is it training?

    What about people who live with family members? Are they tagged as NEETS?

    Are ‘natural’ death, suicide and prison stats rising as unemployment stats fall?

    Maybe the ONS should cross reference all data available. There’s a few hundred people available to do the work (for free) on WP that could do with the work experience.
    ONS on my cv? YES PLEASE!

    Are we all full of s***?

    Yes. Because we chose to listen to Authority for our easy money, when we should be independent, self sufficient and working as a team.

    We do more to get our benefit than we do for our own family and allies.

    • Yeah sure, if the “benefits” didn’t exist then “family” and “allies” would be rushing round to help out. But the thing is, relying on out neighbours goodwill does not work in the Real World, that’s why Social Security came into being in the first place. If Social Security did not exist in this country, millions, literally millions would be left to did on the streets, it would be no different from the slums of India, or not so far away on the frozen streets of Poland where the destitute die every year.

      • United StereoTypes of Unemployment (U.S.T.U)

        Families and allies can work together and become a unit.

        Don’t ask for handouts, but grow up & work together as a team with those that you can work with.

        If we all try, we may succeed in 2000 years. Give or take a decade.

        The real world is what we make it.

        There’s a robot on Mars as I type so anything is possible.
        It seems I’m one of a few who believe this, sadly.

        In my dream world I picture watching the 6 o’clock news, and the reader saying “not one person has paid their gas or electric bill in the UK this month in protest at fuel prices..”

        • lol And if on the Six O’Clock news it said: “Food Shortage on the Way – Do Not Panic, there will be plenty for everyone”, what do you think would happen? Yes, people are really not going to pay their electric/gas bill en masse, now you really are talking shite. And why the fuck are you peddling this destruction-of-the-welfare state with your Big Society bullshit anyway? I think the word “handout” gives your game away. Fuck off!

  17. United StereoTypes of Unemployment (U.S.T.U)

    Did I touch a nerve fraggle?

    If a food shortage was announced I’m eating duck. There are plenty about. It’s old skool. & best of all, it is free.

    What would you do? Hit the shops and panic buy?

    I don’t peddle the destruction of the welfare state. I’m fed up of being bullied by Government & their allies too.

    They don’t seem to do much other than talk, make rules, create divisions, and bombard me with marketing and sometimes useful but not neccesary products (toys) to use (play with).

    I wonder how they blagged their way into power.

    When do commoners comply with Authority? Under durress and when we want something, ie a reward.

    Do you really believe the benefits system was created to help us commoners?

    Damn. It’s helped me so much. I’ve had alot of fun and hopefully my son isn’t too bothered
    about the trillion pounds that he owes U.K.

    I can’t wait til I get my next giro.

    • Samuel & Samantha Swan

      ffs the wildlife population will be extinct within short order if we all take to eating mallard duck, wood pigeon, squirrel and swan. what the fuck is you and your toff mates problem with the welfare state? and to answer your question the welfare state was created to piss off toff cunts like you. fuck off and enjoy your roast pheasant. commoner – bet you are.

      • Oo-er – Samuel and Samantha – a right pair of posh cunts. Fuck off back to Swan Lake you fucking toffs.

  18. Pingback: How the DWP Manufactures Falling Unemployment Figures | the void

  19. Well I do know that all over 60s Job Seekers were moved on to Pension Credit. So does that make the figures look better for Ian Duncan Smith.

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  22. This is an interesting post but it lacks any sources – even any links – for most of the claims made in it, which reduces it’s credibility. My brother, who registered as Self Employed, also tells me he was sent demands for National Insurance payments even though he wasn’t actually getting any work or income – which would seem to cancel out any benefit from registering as Self Employed to get Working Tax Credit (and can’t you only claim Working Tax Credit in a proportion of taxes you can get back/ don’t have to pay?). I’m not any kind of expert on any of this but some sources and links would improve this post a lot.

    • The DWP statistical bulletin in published far behind the unemployment figures and covers housing benefit and other in work benefits. The most recent is available on the DWP website.

      There are no recent figures for numbers claiming working tax credit, or how much they are actually earning (if anything at all). it will be several months befoe this information becomes available. the reason there are no links is because there is no information yet.

      What we do know is that unprecedented numbers of people are coming off job seekers allowance to become self-employed. This is easier than ever due to Working Tax Credit. Work Programme providers can claim an outcome payment if someone moves off JSA onto tax credits. Growth is falling, along with unemployment. Huge numbers of people being transferred from JSA to WTC credit would explain most of the drop in unemployment. It doesn’t mean any of them are actually earning any money. This can’t yet be proved to be the reason for falling unemployment, but it looks pretty fucking likely.

  23. Also where is the evidence that firms taking people on on unpaid (workfare?) placements are persuading them to switch to Working Tax Credit? and how can they when the people aren’t being paid anything to get tax credits on, when they’re only getting JSA (unemployment benefit)?
    I’m not saying it’s definitely not true – it could be true – i’d just like to see some kind of evidence for it and hear how it makes sense, because from what little i know it doesn’t seem to make any sense.

  24. unless working tax credits are just another benefit and not actually a remission or exemption from some tax on income?

  25. The HM Revenu and Customs website says ” If you work, but are on a low income, you may qualify for Working Tax Credit.” which suggests you can’t get Working Tax Credit unless you’re doing paid work. Can you get it if doing unpaid work too?

    • sorry didn’t see these comments before I replied. You can claim working tax credit if you are self-employed and work 30 hours a week. You do not necessarily have to be earning anything from this self-employment. If you are earning less than – i think about 5k a year, cant check am on my phone – then you receive the full amount of working tax credit which is just over 50 quid a week. you can still claim housing benefit, which will be reduced as income grows.

      • If you’re disabled you can also get a disablity addition on WTC working over 16 hours a week. I wonder what will happen to people on this when Universal Credit is rolled out. Will self-employed people not earning enough get transitional protection or will they get thrown back on the dole because the new rules for self-employment under UC assume a minimum wage earned. That will leave a lot of self-employed people in Shit Street

  26. Zero income is ‘low income’. Unless I’ve missed it, this article doesn’t appear to consider the cash-in hand people who, due to the work programme and its operator’s many money making ‘courses’ and their ability to sanction those who do not attend, sign off benefits.

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  32. Here is a thought. How about all of you lazy malingering sponges get off benefits and start working. There are plenty of jobs out there, but you scroungers make me sick, complaining that you are all badly done to. If the truth be known, with housing, council tax and the plethora of benefits available, 95 % of work shy scroungers are better off than the working man on the lowest wage, and they don’t qualify for hand outs. I think sanctions are the way forward, it’s about time people realized the world doesn’t owe them anything, and families which are in third and fourth generation benefit scroungers should now be a thing of the past. Anyone on benefits should be made to work cleaning the streets to earn for what they get. There is no point arguing about it, as your not supposed to get anything for nothing. That voluntary work would enable why shy scroungers what it is like to get up and follow a weekly routine of work instead of sitting on their arses and complaining that they need money. Last point, over the years benefit payments have increased with inflation, year on year. The poor working on low wages didn’t get a rise for 6 years. I say reduce all benefits, make you lazy gits struggle then you will be motivated enough to get a job. No more breeding like rabbits to get hand outs.

    • Oh look, one of the baying mob who believes all the propaganda the government and Daily Heil has fed him. *Slow hand clap for playing right into the government’s hands*
      All I see is people getting nothing for doing something, including voluntary work. But this troll John Smith is obviously too stupid to know that people have been sanctioned for doing voluntary work, is obviously too stupid to realize that he’s a victim of a huge con where the rich are sucking money from the poorest (including him) and lining their own pockets, stupid enough to fall for the divide and rule politics which has poor fighting against poor, too stupid to do know that two and a half million people (a conservative estimate) looking for half a million jobs doesn’t go, is too brain dead to understand that aggressive neoliberalism requires a large number of unemployed and too thick to think for himself.
      He should try Try reading Harry’s Last Stand and see what a 91 year old war veteran has to say on the matter, then he might have some humility and learn a thing or three.

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