Twenty to One in disadvantaged areas

New analysis of online vacancy data shows that in ex-industrial and inner city areas there are on average twenty people claiming unemployment-related benefits for every job vacancy – up from around four people per vacancy before the crisis began.  In eleven local authorities, there are estimated to be over 50 unemployed people chasing every vacancy.  This includes Broxtowe, Bolsover, Rhondda and Telford.

By contrast, in more affluent areas of England it is estimated that there are on average five unemployed people chasing every job.

The table at the end of the release sets out areas:

• Where 50 or more unemployed people are chasing each job – these areas are hardest hit
• Where there are still fewer than 3 unemployed people chasing each job

The analysis, by the Institute for Employment Studies (IES) and funded by the Joseph Rowntree Foundation (JRF), uses vacancy data collected by Adzuna (www.adzuna.co.uk) and matches it with local claimant unemployment data published by the Office for National Statistics this week.

This week’s analysis also gives some tentative signs that the hiring market may be starting to recover, with the number of newly notified vacancies in the second week of June reaching 106 thousand.  This is nearly double the number notified in the last week of May (58 thousand).  However this is just one third of the number of new vacancies notified in the same week last year (321 thousand) so there is still a very long way to go in the recovery.

The total number of live vacancies now stands at 368 thousand – nearly two thirds (63%) lower than this time last year, and just under half (45%) of pre-crisis levels.

Looking at job types:

• Over a third of all vacancies advertised are now in health, education and social work, compared with just one in five before the crisis began.  Adverts for these job types are down by just a quarter compared with before the crisis began.
• One in nine job adverts for IT roles.  These have risen by a quarter between May and June, but are still at less than half of pre-crisis levels (48 thousand compared with 109 thousand).
• Recruitment in sectors most affected by the shutdown remains depressed – with vacancies in sales and in hospitality running at just 21% and 13% of pre crisis levels.

Commenting on the figures, Tony Wilson, Director of the Institute for Employment Studies, said:

“This crisis has affected all parts of the economy, but it’s clear that it is hitting some places harder than others.  Many of these areas were struggling before this crisis began and are in even more trouble now.  We need to be doing much more both to support employment demand in the short term – for example by cutting employer National Insurance – and in the longer term to support new industries and jobs.

“There are tentative signs that hiring may now be starting to pick up as businesses start to reopen, but these are very early signs.  New vacancies are still at barely a third of the levels they were a year ago, and there’s a lot of people working fewer hours than they’d want or wondering if they will have jobs to go back to after furlough.  However if we can suppress the virus and start to ease restrictions further then we should start to see a stronger recovery.”

Dave Innes, Head of Economics at JRF said:

“This research shows parts of the economy where workers are at the highest risk of poverty, such as restaurants and non-food retail, are being hardest hit by the outbreak, and areas of the country where people were already held back are falling even further behind.

“People who were already struggling to get by may find their hours are cut, or their jobs lost altogether at a time when vacancies are down significantly. As the furlough scheme winds down, unemployment is only likely to increase.

“As the government focuses on restarting the economy and mitigating the economic impact of coronavirus, it has to be ambitious in the size and scope of its interventions to address these challenges.

“The government has restated its commitment to the ‘levelling up’ agenda. To make this ambition a reality, we need sustained investment in jobs, skills and infrastructure across the country, as well as a social security system that supports people when they need it.”

Areas with 50 or more unemployed people per vacancy:

Areas with 3 or fewer unemployed people per vacancy: