Economically inactive and unemployed – are we failing on SDGs?

Economically inactive and unemployed – are we failing on SDGs?
4 minutes read

As of June 2024, the UK has about 10.9m without a job. This comprises 9.434m economically inactive and 1.510m unemployed, making an estimated total of 10.944m. This nearly 11 million people are aged 16-64 and capable of contributing to the economy. So, are they economically inactive by choice? Are they involuntarily unemployed and desperately seeking jobs? Are they prevented from working in some way? With the figures beginning to rise, we explore this ‘stranded workforce’ in a little more detail.


Economically inactive

The UK definition of economically inactive are people who are out of work, have not tried to find work in the last month and cannot start work in the next fortnight. This has currently topped 9.4m people from 16-64 years old. About 2.4m of these are students. Another 1.7m are caring for others. 2.6m are short-term or long-term sick. 1.2m are early-retired and not looking to work. Finally, the remaining 1.5m are out of work for a variety of reasons, from disability to no longer looking for work.

Whatever the reasons, the growth of this group stands out against other developed economies. Where they are seeing decreases in economic inactivity, the UK is seeing an increase, which many experts put down to sickness and lifestyle. For all the claims of record employment, which is broadly true at over 30m people, there is a growing group being left behind.


Unemployed (involuntarily)

Interestingly, approximately 1.7m of the economically inactive would like a job, which is more than the 1.5m officially unemployed. So, for the mathematically astute amongst you, that makes over 3.2m that want to work and could work. If you believe the official survey statistics, there are only 0.9m job vacancies out there for 3.2m people.

A proportion of the 3.2m are discouraged from finding work or have given up hope of finding a job. In some cases, this is because of the cost of childcare, the need for flexible work around caring or sickness and disabilities. Others have simply been rejected too many times and have given up. Some have redundant skills or live far away from where jobs are located.


Failing on SDGs?

Though the UK Government is taking measures to get people back into work, including up to 30 hours of free childcare, there is a lack of support. That is a lot of economic growth left on the table and taxes never collected to fund public services and pensions. If we look at the UN’s 17 Sustainable Development Goals, it looks as though we are failing on some of them. Poverty? Hunger? Good health and wellbeing? Decent work? Reduced inequalities? Peace and justice?


A stranded workforce?

With 3.2m available to work, or about 34% of the 11m, why do we hear so often that businesses can’t find the staff they need? By default, this means that there is more than 10% ‘slack’ in the system of 30m paid employees, ready to come forward. If you take the same 34% and apply it to the 8.4m self-employed or non-employing businesses, there are up to 6m available workers (3.2m plus 2.8m). The LSE recently found that 2 in 5 self-employed would return to a salaried job if they could. Even taking this statistic and excluding non-employing businesses, we would have 5.1m available workers (3.2m plus 1.7m).

So, what’s happening here? Simply put, it appears that we have a triumvirate of problems. Firstly, we are not increasing output sufficiently to soak up the available labour, such as via increased exports. Secondly, we are failing to attract, find and train the available labour, wherever it may be. Thirdly, we are trading the actively employed around a merry-go-round of employers, causing huge losses in productivity and pushing up salaries. Without the support of business, Government and non-profit organisations, these people may languish outside of employment for the long-term (and you still won’t be able to find good people – sic).


Final thoughts on economically inactive

The numbers are huge and the task is daunting. Of nearly 11m people of working age, between 3.2m and 6m could move to salaried jobs. This may represent lost taxes, lost productivity and lost innovation. It also represents a blot on the copybook, a stain on the nation and an ‘F’ on the homework of reducing inequality. For every 10 that go to work, 1 or 2 don’t have the same luxury or face uncertainty and insecurity.

We know that human bias makes us more comfortable with what we know. In fact, we look for ways to confirm it. That means that it goes against our nature to look for talent in places that you don’t normally look. They may not look or act like your archetype recruit, which is why you haven’t considered them, though they may be willing and loyal. It may also mean more planning, effort and time to find the piece to fit your organisational jigsaw. But, here’s the rub – for every claim of meeting your ESG requirements, how you are an equal opportunities employer or investing in talent, there is someone who cannot get work. Perhaps your ideal employee is someone you never considered.


Making a difference with your business

Think Beyond helps senior leaders to achieve their targets in the right way. This includes building responsible organisations with good jobs and content employees. Righting the wrongs of those marginalised in our communities is part of what a responsible employer should do to help. So, whether you need help with strategic planning, redesigning the organisation or improving employee experience, we can support your journey.

If you would like to discuss your business strategy, simply drop us a note for a free initial introduction. Alternatively, you can request a specific service via our form.

Finally, why not read a related article about boosting business ideas and suggestions.