HomeIndices Analysis‘Breaking the Stigma: 800,000 People Fall into ‘Economic Inactivity’ as They Struggle to Find Work’

‘Breaking the Stigma: 800,000 People Fall into ‘Economic Inactivity’ as They Struggle to Find Work’

Local Man Seeks Employment with Support of Council-Backed Center

Michael, a fair-haired man with a frail appearance and a face that tells a story, is on a journey to find employment. After facing personal challenges seven years ago, including a divorce and unemployment, Michael was left with a difficult choice: be homeless or move to a bedsit in Middlesbrough. He chose the latter and is now seeking assistance from the Employment Hub on Corporation Road, located opposite the Middlesbrough Jobcentre.

The Employment Hub, supported by the local council, offers guidance and support to individuals looking to re-enter the workforce. This includes young adults transitioning from education to employment, older individuals seeking to earn again, and those like Michael who have been derailed by illness or personal circumstances.

“I’ve lost my confidence,” Michael shares. “With not being in work for a while, I got stuck in a routine and I’m not the best at helping myself out at times. You feel like you’re stuck. It would be nice to get back into a work routine. You feel better in yourself through having a job.”

To help him on his journey, Michael has an appointment with Doug Hewitson, who was once long-term unemployed himself. As part of the employability team, Doug provides clients with a range of services to support their return to work, such as CV building, obtaining basic qualifications, and accessing training and work experience opportunities.

“We primarily work with retirees, the short-term sick, and people with young families, typically with children younger than two,” Doug explains. “These individuals are often on a type of universal credit that does not require them to seek work. And we have a lot of them.”

The Employment Hub is working to address a gap that exists across the country, as the economy struggles with a labor market crisis that is not due to a lack of job opportunities. Unlike the unemployment crisis of the 1980s, there are currently close to a million vacancies available. The challenge lies in finding individuals to fill these roles.

Since the start of the pandemic, nearly 800,000 people have fallen out of employment and into “economic inactivity,” a term that includes the nine million people of working age who are not currently able or seeking to work. This group includes students, early retirees, and stay-at-home parents and carers, but the largest and most concerning reason is long-term sickness, which has increased by over 400,000 due to mental health conditions.

This trend has hindered economic growth and led to an increase in the welfare bill. It has also gained political attention, with some, including Chancellor Rishi Sunak, characterizing certain mental health challenges as “the ups and downs of everyday life.”

The state’s response to worklessness is Universal Credit, a single payment system that covers benefits for housing, children and childcare, and unemployment benefits, administered through the Jobcentre Plus network. At the Middlesbrough Corporation Road branch, claimants attend strict 10-minute appointments and are monitored by up to four security guards. The system operates on a mix of incentives and consequences, requiring individuals who are able to work to attend weekly meetings with a work coach and take steps towards finding employment. Failure to comply can result in reduced cash payments. However, those who are too sick to work are not required to seek employment, leading to suspicion, shared by the Prime Minister, that some claimants may be citing mental health conditions to avoid work.

When asked if some individuals do exploit the system, work coach Michaela Fulleylove acknowledges that it does happen. “I’m saying yes, definitely. But we have to treat every individual with trust, fairness, and compassion,” she says. “But we have to be able to ask questions, because not only is it our job to support the public, but we also have to protect the public purse.”

Despite the challenges faced by Middlesbrough and the Tees Valley, there are opportunities for growth. The closure of major employers, such as ICI and British Steel, has left a void that has yet to be filled. The latest effort to address this issue is the “leveling up” initiative, spearheaded by Tees Valley Mayor Ben Houchen. Additionally, the development of the Teesworks freeport, the largest brownfield project in Europe, and the growth of the renewable energy industry, including the offshore wind project at Dogger Bank, offer potential for thousands of new jobs. However, this also presents a challenge for employers.

AV Dawson, a company that has operated the Port of Middlesbrough for 80 years, currently employs approximately 200 staff. People and Culture Director Louise Croce shares that they have no trouble filling roles or retaining staff. However, she also notes the perverse incentives of a benefits system that requires claimants to apply for jobs, regardless of their qualifications or abilities.

“We get people who want to be hairdressers applying

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