Unemployment in Aberdeen

Transcription

1 Briefing Paper 2013/03 Unemployment in Aberdeen RESEARCH AND INFORMATION

2 Research and Information Briefing Paper 2013/03 (Published July 2013) UNEMPLOYMENT REPORT, ABERDEEN This is one of a series of briefing papers being produced by the Research and Information Team. It is intended that these papers will be used by Council services and, where appropriate, our Community Planning partners to assist policy development and service delivery. This briefing paper looks at unemployment in Aberdeen. It compares claimant totals and rates with Aberdeenshire, the other key cities and the overall Scottish average. Information is presented on the age of claimants and the duration of their spells of unemployment. Historical data is also presented to give an indication of how unemployment in Aberdeen has fluctuated over the years. Most of the analysis is at local authority level, but information is also included for Aberdeen wards and intermediate zones. (Note: these intermediate zones are broadly similar to the city s neighbourhoods.) Unemployment figures from the Labour Force Survey are presented along with information from a study by Sheffield Hallam University that looked at the extent of hidden unemployment. For more information on this paper, please contact: Tom Snowling Senior Research Officer Research and Information Team Corporate Governance Aberdeen City Council Business Hub 18 Marischal College, 4 th Floor West Broad Street Aberdeen AB10 1AB tsnowling@aberdeencity.gov.uk Previous briefing papers in this series have included the following topics: Income and Earnings Migrant Workers Deprivation in Aberdeen (based on the results of the 2012 Scottish Index of Multiple Deprivation) These papers, and other statistical reports, can be found in the Stats and Facts section of the Aberdeen City Council website: We value your comments/feedback and would appreciate if you could provide your comments on this paper by clicking the following link:

3 UNEMPLOYMENT REPORT, ABERDEEN Summary In June 2013, there were 2,762 unemployed claimants in Aberdeen, 1,821 males and 941 females. These claimants accounted for 1.8% of the city s working age population. The level of unemployment in Aberdeen is low compared with the other main cities and the overall Scottish average. At 3.8%, the Scottish claimant count rate is more than double the Aberdeen rate. Although the city s claimant count has been falling in recent months, it remains well above the pre-recession numbers that were seen in 2007 and In the period since January 2001, the claimant count in Aberdeen has fluctuated between a high of 3,669 (February 2012) and a low of 1,509 (October 2007). Unemployed claimants aged under 25 accounted for 22% of all claimants in Aberdeen in June This represents a lower-than-average incidence of youth unemployment than across Scotland as a whole, where 27% of claimants were aged under 25. 1,025 claimants in Aberdeen had been out of work for more than six months in June 2013, including 530 who had been out of work for more than a year. 1,195 claimants in Aberdeen were classed as short-term, i.e. their period of unemployment at June 2013 was less than 3 months in duration. Unemployment is unevenly distributed across Aberdeen. There were 466 claimants in the Torry/Ferryhill ward in June 2013 compared with 39 in Lower Deeside. Northfield ward had the highest rate of unemployed claimants, 3.5% of the ward s working age population. Based on the International Labour Organisation definition of unemployment, there was an average of 6,300 unemployed people in Aberdeen in 2012, 5% of the city s population aged 16 and over. A report by Sheffield Hallam University estimated that Aberdeen s real unemployment total in April 2012 was 9,600. This includes the hidden unemployed who are not included in either the monthly claimant count or the unemployment data from the Labour Force Survey. With the introduction of Universal Credit there will be a change in the way the claimant count is calculated in future. Briefing Paper 2013/03 - Unemployment Report, Aberdeen 2

4 UNEMPLOYMENT REPORT, ABERDEEN 1. INTRODUCTION 1.1 This paper looks at the two official measures of unemployment in the UK: (a) the monthly claimant count of unemployment-related benefits, and (b) the Labour Force Survey estimate, which is based on the International Labour Organisation definition of unemployment. It also includes information from a report by Sheffield Hallam University which examines the real level of unemployment; this covers unemployed people who are missed in both the claimant count and the Labour Force Survey. 1.2 The claimant count information is based on monthly data up to June 2013, while the Labour Force Survey information is based on annual modelled estimates of unemployment for 2004 to The Sheffield Hallam University report is based on data from April UNEMPLOYED CLAIMANTS Monthly Count 2.1 The Office for National Statistics (ONS) release monthly statistics based on the number of people who claim Jobseekers Allowance (JSA) and National Insurance credits at Jobcentre Plus local offices. People claiming JSA must declare that they are out of work, capable of, available for and actively seeking work during the week in which the claim is made. 2.2 In June 2013, there were 2,762 unemployed claimants in Aberdeen; approximately two-thirds of whom were male and one-third female. The level of unemployed claimants in Aberdeen is relatively low, accounting for 1.8% of population aged resident in the city. That is less than half the Scottish average and also well below the other main cities see Figures 1a and 1b. Figure 1a Claimant count, June 2013 Male Female Total Aberdeen 1, ,762 Aberdeenshire 1, ,788 Dundee 3,927 1,708 5,635 Edinburgh 7,287 3,326 10,613 Glasgow 15,432 7,214 22,646 Scotland 89,552 43, ,569 Briefing Paper 2013/03 - Unemployment Report, Aberdeen 3

5 Figure 1b Claimant count rates, June 2013 Male (%) Female (%) Total (%) Aberdeen Aberdeenshire Dundee Edinburgh Glasgow Scotland Note: rates for council areas are based on the popn aged In the period since January 2001, the claimant count in Aberdeen has fluctuated between a high of 3,669 (February 2012) and a low of 1,509 (October 2007). The impact on the claimant count of the post-2008 financial crisis and economic recession can be clearly seen in Figure 2. In the two-year period from January 2008 to January 2010, the number of claimants in Aberdeen almost doubled. Figure 2 Unemployed Claimants, Aberdeen 4,000 3,500 3,000 2,500 2,000 1,500 1, Age and Duration of Unemployment 2.4 In addition to the basic claimant count, the ONS produce information on the age of claimants and the length of time for which they have been unemployed. This information excludes the small number of claimants whose applications Briefing Paper 2013/03 - Unemployment Report, Aberdeen 4

6 have to be processed manually, either because their postcode or National Insurance number is missing. The age and duration data is also rounded to the nearest 5. For these reasons, the totals in this section are slightly different to the basic claimant counts shown in Figure 1a. 2.5 In June 2013, 605 claimants in Aberdeen were aged under 25 years, accounting for 22% of all claimants in the city. That proportion was lower than the Scottish average, the other main cities and also Aberdeenshire. The proportion of claimants aged years was higher than average in Aberdeen, while the proportion of older claimants aged 50 years and over was broadly in line with other areas see Figures 3a and 3b. Figure 3a Age of claimants, June 2013 Numbers All 50 and Under claimants over Aberdeen 2, , Aberdeenshire 1, Dundee 5,635 1,545 3, Edinburgh 10,600 2,450 6,300 1,840 Glasgow 22,640 5,550 13,465 3,625 Scotland 132,315 35,865 73,895 22,555 Note: numbers have been rounded to nearest 5 and may not sum Figure 3b Age of claimants, June 2013 Percentages All 50 and Under claimants over Aberdeen 2,755 22% 60% 18% Aberdeenshire 1,785 24% 56% 20% Dundee 5,635 27% 57% 16% Edinburgh 10,600 23% 59% 17% Glasgow 22,640 25% 59% 16% Scotland 132,315 27% 56% 17% Note: percentages have been rounded and may not sum to 100% 2.6 Long-term unemployment is usually defined as a period of unemployment that has lasted for a continuous period of at least six months. Based on that definition, there were 1,025 long-term claimants in Aberdeen in June 2013, including 530 who had been unemployed for more than a year. The level of long-term unemployment in Aberdeen is relatively low, with 37% of all claimants classed as long-term unemployed. Across Scotland as a whole 48% of claimants in June 2013 were long-term unemployed, including almost 30% in the over 12 months category see Figures 4a and 4b. Briefing Paper 2013/03 - Unemployment Report, Aberdeen 5

7 Figure 4a Duration of unemployment, June 2013 Numbers All Up to Over 12 claimants months months months months Aberdeen 2,755 1, Aberdeenshire 1, Dundee 5,635 1, ,000 Edinburgh 10,600 3,605 2,155 2,045 2,800 Glasgow 22,640 7,335 4,055 4,235 7,015 Scotland 132,315 44,315 24,765 25,170 38,065 Note: numbers have been rounded to nearest 5 and may not sum Figure 4b Duration of unemployment, June 2013 Percentages All Up to Over 12 claimants months months months months Aberdeen 2,755 43% 19% 18% 19% Aberdeenshire 1,785 43% 20% 15% 22% Dundee 5,635 34% 15% 16% 35% Edinburgh 10,600 34% 20% 19% 26% Glasgow 22,640 32% 18% 19% 31% Scotland 132,315 33% 19% 19% 29% Note: percentages have been rounded and may not sum to 100% 2.7 Of the 605 claimants in Aberdeen who were aged under 25, almost half of them were classed as short-term, i.e. their period of unemployment was up to 3 months see Figure 5. In the other two age groups, the proportion of shortterm claimants was lower, 43% for the age group and 39% for those aged 50 and over. In contrast, 215 claimants aged 50 and over had been unemployed for more than 6 months, 43% of all claimants in that age group; the equivalent rate for claimants aged under 25 was 30%. Figure 5 Age and duration of unemployment, June 2013, Aberdeen All ages Under and over All durations 2, , Up to 3 months 1, months months Over 12 months Note: numbers have been rounded to nearest 5 and may not sum Briefing Paper 2013/03 - Unemployment Report, Aberdeen 6

8 Local Area Unemployment 2.8 The 2,762 unemployed claimants in June 2013 were not evenly distributed across Aberdeen. Figure 6 shows the ward-level claimant count and the proportions of the resident population in each ward that are unemployed. It can be seen that the rate in Northfield is 3.5%, while three wards have claimant rates below 1%. Figure 6 also shows that the claimant count fell in each ward between June 2012 and June Figure 6 Unemployed claimants by ward Ward Name June 2012 June 2013 No. Rate (%) Airyhall / Broomhill/Garthdee Bridge of Don Dyce/Bucksburn / Danestone George St/Harbour Hazlehead / Ashley / Queens Cross Hilton / Stockethill Kincorth / Loirston Kingswells / Sheddocksley Lower Deeside Midstocket / Rosemount Northfield Tillydrone / Seaton / Old Aberdeen Torry / Ferryhill Figure 7 shows the ten (out of 47) Intermediate Zones that had over 100 claimants in June 2013; these zones accounted for 53% of all claimants in Aberdeen. In contrast, nine Intermediate Zones had fewer than 10 claimants. Note: Intermediate Zones are equivalent to Aberdeen s neighbourhoods. Some of the larger neighbourhoods, such as Torry, have been split into more than one IZ, while two small neighbourhoods, Heathryfold and Middlefield, have been combined into one Unemployment data for all Intermediate Zones for June 2012 and 2013 is shown in the Appendix to this paper. Briefing Paper 2013/03 - Unemployment Report, Aberdeen 7

9 Figure 7 Intermediate Zones with most claimants, June 2013 No. of claimants Torry West 184 Torry East 168 Tillydrone 160 Woodside 159 Seaton 141 George Street 139 Heathryfold and Middlefield 134 City Centre 130 Northfield 121 Hanover Basic claimant count data is disaggregated down to data zone level. The following map shows the distribution by four broad categories fewer than 4, 4-9, and 20+ claimants for each of Aberdeen s 267 data zones. The concentrations in and around the regeneration neighbourhoods can be clearly seen. Briefing Paper 2013/03 - Unemployment Report, Aberdeen 8

10 3. LABOUR FORCE SURVEY 3.1 The Labour Force Survey (LFS) is the primary source of information on local labour markets, providing headline estimates of employment, unemployment and economic activity. Unemployment levels and rates are measured following the definition recommended by the International Labour Organisation (ILO), This counts people who: (a) are out of work, (b) are available to start work in the next two weeks, and (c) have looked for work in the last four weeks. The ILO measure includes many of the unemployed who are ineligible to receive Jobseekers Allowance and are consequently omitted from the monthly claimant count. 3.2 A drawback of the LFS unemployment figures is that they are based on a sample survey and the data for small areas can be subject to a significant margin of error. To improve the quality of unemployment data, the Office for National Statistics developed model-based unemployment estimates for all local authority areas in the UK. 3.3 The model-based ILO unemployment totals for Aberdeen for are shown in Figure 8. It reveals a similar trend to the monthly claimant count, with the incidence of unemployment rising sharply as a result of the recession. However, the ILO unemployment totals are significantly higher than the claimant count. The average claimant count for 2012 was 3,360, while the ILO-defined measure of unemployment was almost 3,000 higher at 6,300. Figure 8 ILO-based unemployment numbers in Aberdeen, ,000 7,000 6,000 5,000 4,000 3,000 2,000 1, The ILO-based unemployment rate for people aged 16 and over in Aberdeen was also higher than the claimant rate 5.0% in 2012, compared with the Briefing Paper 2013/03 - Unemployment Report, Aberdeen 9

11 average claimant count rate for that year of 2.2%. The equivalent ILO-based unemployment rate for Scotland was 7.9%. 4. MEASURE OF REAL UNEMPLOYMENT 4.1 In September 2012, the Centre for Regional Economic and Social Research at Sheffield Hallam University published a report, The Real Level of Unemployment , which sought to identify people who are hidden from the official measures of unemployment. The report points out that there are well-developed mechanisms in the UK for diverting the unemployed between different parts of the benefits system, notably from unemployment benefits to incapacity benefits, or out of the benefits system entirely. 4.2 Although the ILO-based measure of unemployment is theoretically independent of benefit status, the report claims this is not always the case for many people. If the benefit that an individual claims (such as Incapacity Benefit) does not require them to look for work, and if they think there is no suitable work available for them, they will generally give up looking. That means they will fail to meet the ILO criteria and drop out of the Labour Force Survey unemployment estimates. 4.3 Identifying the hidden unemployed among incapacity benefit claimants is difficult to measure. The Sheffield Hallam University researchers used a sophisticated benchmarking process which produced real levels of unemployment for each local authority area in the UK as at April Figure 9 shows their estimate of real unemployment in Aberdeen. Figure 9 Real level of unemployment in Aberdeen, April 2012 No. Rate (%) Claimant count 3, Additional LFS unemployed 3,300 - Hidden on incapacity benefit 2,900 - Real unemployment 9, Source: Centre for Regional Economic and Social Research, Sheffield Hallam University Note: totals do not sum due to rounding 4.4 Unemployment in Aberdeen has fallen since April 2012 and there is likely to have been a corresponding fall in the level of real unemployment, as defined in the Sheffield Hallam University report. Despite that, however, the total could be in the 7,000-8,000 range, well above the June 2013 claimant count of 2, Briefing Paper 2013/03 - Unemployment Report, Aberdeen 10

12 5. INTRODUCTION OF UNIVERSAL CREDIT 5.1 The Pathfinder for Universal Credit started in April 2013, with the introduction of this new benefit in one Jobcentre Plus office in England. Three further offices will take claims from Summer 2013 and the roll out of Universal Credit across the rest of the UK will commence in October Universal Credit will replace a number of means-tested benefits including the means-tested element of Jobseeker s Allowance (JSA). It will not replace contribution-based JSA. 5.2 Following a consultation in 2012 by the Office for National Statistics (ONS), it was agreed that, with the introduction of Universal Credit, the new claimant count will include: People claiming contribution-based JSA (which is not affected by the introduction of Universal Credit) People claiming means-tested JSA during the transition period while this benefit is being phased out, and People claiming Universal Credit who are not earning and who are subject to a full set of labour market jobseeker requirements. 5.3 ONS is working with the Department of Work and Pensions to include jobseeker Universal Credit claimants in the claimant count statistics as soon as possible. 6. CONCLUSIONS 6.1 Although Aberdeen s economy showed a degree of resilience during the post economic downturn, it was not immune from national and global trends. The impact was most noticeable in the labour market where there was a sharp rise in unemployment, especially in 2009 and The level of unemployment has fallen back in recent months, but the claimant count remains well above the totals that were seen in 2007 and The incidence of youth unemployment in Aberdeen is lower than the other main cities and the Scottish average, but 605 claimants in June 2013 were aged under 25 and more than half of them had been out of work for more than three months. This may be indicative of the difficulties that some young people have in gaining access to a labour market that is continuing to feel the effects of the economic recession. 6.3 The wider definition of unemployment used by the Labour Force Survey and especially by the Centre for Regional Economic and Social Research at Sheffield Hallam University shows a significant pool of working age people in Aberdeen who are not currently in employment but could be classed as being economically active. Briefing Paper 2013/03 - Unemployment Report, Aberdeen 11

13 Claimant Counts for Intermediate Zones, Aberdeen Appendix June 2012 June 2013 Intermediate Zone Total Rate Total Rate S Cove South S Kincorth, Leggart and Nigg South S Culter S Cults, Bieldside and Milltimber East S Cove North S Kincorth, Leggart and Nigg North S Cults, Bieldside and Milltimber West S Garthdee S Braeside, Mannofield, Broomhill and Seafield South S Ferryhill South S Braeside, Mannofield, Broomhill and Seafield East S Torry West S Braeside, Mannofield, Broomhill and Seafield North S Hazlehead S Torry East S Ferryhill North S West End South S City Centre S West End North S Summerhill S Rosemount S Hanover S Midstocket S George Street S Mastrick S Ashgrove S Sheddocksley S Stockethill S Froghall, Powis and Sunnybank S Cummings Park S Northfield S Seaton S Hilton S Heathryfold and Middlefield S Kingswells S Tillydrone S Old Aberdeen S Woodside S Bucksburn South S Danestone S Balgownie and Donmouth West S Balgownie and Donmouth East S Bucksburn North S Oldmachar East S Oldmachar West S Denmore S Dyce Source: Office for National Statistics/Scottish Neighbourhood Statistics Briefing Paper 2013/03 - Unemployment Report, Aberdeen 12

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