Work & Worklessness

Date 31 August 2017
Date updated 31 May 2018

The indicators in this topic look at the problems associated with not being in paid work, underemployment and insecure work. 

Poverty and the amount of paid work carried out by adults in a household are closely related. As the figures on in-work poverty show, having an adult in employment is not a guarantee of having a good income. However, poverty is much more likely without employment or when working relatively few hours. 

270,000 people were unemployed in London in 2016, which is the lowest level since the start of the recession in 2008/09. This is also the first year in which unemployment has been split evenly between men and women. Previously, the unemployment rate had been higher for men, partly because men who were not in work were more likely to be seeking work, and hence included in the figures. The unemployment ratio has decreased to 4.9% in London, which remains higher than the 3.8% unemployment ratio in the rest of England. The unemployment ratio looks at unemployment as a proportion of the working age population, as opposed to the economically active population. A quarter of the working age population in London were workless in 2016. 5 out of 6 of them were economically inactive (meaning that they were not looking for work).

The number of Londoners claiming an out of work benefit has been falling year on year, and is down to 470,000 in 2016. This has been falling faster in London than the rest of England. Only 41% of unemployed people in England were claiming Job Seeker's Allowance or Employment & Support Allowance in 2016, suggesting that the gap between benefit need and benefit receipt is widening. Only 8% of London households do not contain working adults, down from 15% in 2005.

Work & Worklessness: Indicators

Out-of-work benefits over time

This graph shows the proportion of the working-age adults claiming an out-of-work benefit in London and the rest of England. This is based on their ‘client group’, and the main reason why they are claiming a benefit. This includes jobseekers, Employment Support Allowance and incapacity benefits claimants, lone parents and others on income-related benefits (for example carer’s allowance) and is shown by the lines on the graph. The bars show the proportion of the working-age population that are claiming one of the four main out-of-work benefits for London only. Universal Credit (UC) will replace all of the benefits shown when it is fully rolled out, a process expected to be complete by 2022. It has been included in the graph for 2015 and 2016 only, as before then the numbers of people who had been transferred onto UC were extremely small. …

Map of out-of-work benefits by ward

The map shows the proportion of the working-age population claiming an out-of-work benefit* across London in November 2016. The boroughs of North East and East of London contain the highest concentration of wards with more than 10% of people claiming out-of-work benefits. Most boroughs have a mixture of areas with larger or smaller proportions of people claiming an out-of-work benefit. Hackney, Islington and Barking & Dagenham only have a few areas where less than 10% of the working-age population are claiming an out-of-work benefit. Some boroughs such as Barnet, Harrow, Hounslow, Kingston, Richmond, Merton and Sutton contain no areas where more than 10% of the working-age population are claiming an out-of-work benefit. These are all Outer London boroughs. 

The 32 London boroughs, excluding the City of London due to lack…

Household work status and the income distribution

This graph shows the position of Londoners within the UK income distribution by several different work statuses. These are: whether they are in households where all adults are working full-time; all work but one or more is part-time; only some work; none work; or all adults are of pension age. Families where all the adults are working full-time are mainly found in higher income quintiles. However, more than 1 in 10 (13%) adults in the poorest 20% are in households where all adults are working full-time. Families where all adults are in work, but one or more are working part- time, are spread fairly evenly across the second, fourth and fifth quintiles with slightly more found in the middle 20%. There are fewer in the poorest 20% at 1 in 10 (10%). Households where some adults work and some do not are common across the entire distribution, …

Household work status over time

This shows how household work status has changed over time in London for families with at least one working-age (16 – 64) adult. The proportion of households where all adults are working has remained fairly constant over time, apart from during the recession. In 2016, 47% of people in London were in a household where all adults were working. In the past 20 years the only time this has dropped below 47% was from 2009 to 2013. During this period there was a substantial fall in the proportion of people in a working household, to 42% in 2012.

The proportion of adults in a mixed household, where only some of the adults are working, has increased over the past 20 years. It increased from 35% in 2001 to 44% in 2016. It increased during the recession to its highest level in 2012 and 2013. It has since fallen, but represents nearly half of all tho…

Unemployed adults in London over time

This graph shows the number of unemployed men and women in London from 1992 to 2016. In 2016, there were 270,000 unemployed people in London, the lowest level since the start of the recession in 2008/09. The figure is down around 27,000 on the previous year.

The recent peak in the number of unemployed men was 230,000 in 2011, although the high point in this data series was more than 300,000 in 1993. At 136,000 in 2016, the number of unemployed men is at its lowest in this series.

There were 134,000 unemployed women in London in 2016, down from a peak of 190,000 in 2011. Unemployment levels for women have been fairly close to the numbers for men, something that is historically unusual in London. This is largely due to increased economic activity for women: previously they were more likely than men to be not working and not seeking work or a…

Unemployment ratio over time

This graph shows unemployment as a proportion of the working-age population, (the unemployment ratio). This differs from the unemployment rate, which looks unemployment as a proportion of the economically active population.[1] In 2016, the unemployment ratio was slightly higher in London (4.9%) than the rest of England (3.8%). The ratio in Inner London in 2016 was 5.1%; Outer London was 4.1%.

These rates peaked during the recession at 7.8% and 7.3% for Inner and Outer respectively in 2011. They have since continued to fall, and further converged on the rest of England rate.

Over a longer time period, there has been a substantial convergence over time between London and the rest of England, mainly driven by an improvement in Inner London. In 1994, 11.9% of the working-age Inner London population were unemployed, a ratio that was substa…

Unemployment ratio by borough

The unemployment ratio is the proportion of the working-age population that is unemployed. This graph shows that the ratio has come down significantly in almost all London boroughs in a relatively short timescale. The exceptions are Kensington & Chelsea and Richmond, where there have been slight increases.

The percentage change in the unemployment ratio is drawn out in the graph below.

Unemployment by age

This graph shows the level of unemployment by age for both London and the rest of the UK. Unemployment is higher for 16 to 24-year-olds than for older working-age adults in both London and the rest of England. 9.4% of young adults in London are unemployed, compared with 3.6% of 25 to 64-year-olds. In the rest of England, the gures are 8.3% and 2.8% respectively. Young adult unemployment ratios have fallen quickly since 2013 in London and the rest of England, for London down from a peak of 13.9%. While unemployment for young adults in London is higher than in the rest of England by 1.1 percentage points, the difference is not as large as it used to be. Between 1995 and 2004 it was around three percentage points. The gap between the employment rate of 25 to 64-year-olds in London and the rest of England was smaller in 201…

Worklessness by ethnicity

This graph shows worklessness that is either unemployed or economically inactive by ethnicity in 2006 and 2016. It also shows the share of each ethnic group who are workless as a proportion of the total.

In 2016 the worklessness rate for all ethnic groups had fallen compared with 2006, with the exception of those of Mixed ethnicity. Those of Pakistani or Bangladeshi ethnicity had the highest unemployment rate in 2016 at 46%, a decrease of 11* percentage points from 2006. Worklessness was lowest among those of White ethnicity in both 2016 and 2006, at 21% and 26% respectively. Although the proportion of those of White ethnicity who are workless is low, because they make up the majority of the working-age population, they are also the largest share of the unemployed at 49%. This is lower than in 2006 when it was 54%.

The Mixed, Pakistani and…

Worklessness by country of birth

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This graph shows the proportion of working-age men and women who are workless (unemployed or economically inactive) by their country of birth. The countries shown are the ones with the largest populations in London. In all countries of birth apart from Ireland, including the UK, female workless rates are higher than for males. The differences between genders are explained by levels of economic inactivity rather than unemployment, which suggests that caring responsibilities are a reason for this disparity. There is, however, a large difference between countries. The female workless rate among those born in Afghanistan is 62 percentage points higher than for men, while it is 3 percentage points higher for those born in Jamaica, Germany and Italy. For those born in Ireland the female workless rate is lower than the male worklessness rate by…

Reasons for not working chart

This chart looks at the working-age adults in London who are not in work. There were 1.5 million workless adults of working age in London in 2016 which is one quarter (26%) of the working-age population. 17% of these workless adults are unemployed, meaning they are available to start working and are seeking work. The larger proportion of workless adults, 83%, is made up of those who are economically inactive, meaning that they are not available for work.

Women are more likely to be workless than men in London – 19% (570,000) of men are workless compared with 33% (980,000) of women. This is because of the large variation in the number of economically inactive men (440,000) and women (840,000). Those who were looking after the family or home contributed the most to this difference: 31,000 men and 340,000 women.

In London more t…

Underemployment over time

This graph shows the proportion of the working-age population who are unemployed, economically inactive but who would like to work, and working part-time because they cannot find a full-time job. This represents those who are not working ‘enough’ and who would like to work more. In 2016, 800,000 people, 13.6% of the working-age population, were underemployed. The largest group within this was the economically inactive who want to work. The underemployment rate has fallen for four consecutive years since its high of 17.3% (980,000) in 2012.

The unemployment rate was 5.4% in 2004, and fluctuated around this level until 2009 when it increased to 7% and remained high until 2012 when it was 7.1% (400,000). Since then it has fallen every year until its lowest rate of 4.5% (270,000) in 2016. This has been the larg…

Temporary contracts

This graph shows the number of workers who are on temporary contracts and the number of workers who are on temporary contracts who could not find a permanent position. It also shows the proportion of temporary workers who are involuntarily on temporary contracts and those on temporary contracts as a proportion of all workers in employment.

In 2016, the number of workers in London on temporary contracts was at an all-time high at 260,000. This is 55,000 more than in 2004 when the number of temporary workers was 200,000.* Despite the growth in workers on temporary contracts, the proportion of all workers in London who are on temporary contracts has remained remarkably consistent since 2004 when it was at 5.8%, nearly the same proportion as in 2016 when it was at 5.7%. The total number of workers has grown at the same rate as the number of t…

Insecure workers by age

This graph shows the proportion of employees aged 16 to 64 who are at risk of being in insecure employment by age group in London and the rest of England. Here we define the risk of insecure work as being on a zero-hours contract, in temporary employment, working for an agency, or some combination of these. It is important to note that this does not mean that all workers will experience these forms of employment negatively. This indicator also looks only at employees, and not self- employed workers who might be on a zero-hours, temporary or agency contract.

Since the recession the UK as a whole has seen a larger increase in insecure work than many other countries.* The Trades Union Congress found that the number of people in insecure work, which it defines as those working without guaranteed hours or baseline employment rights, increased …

Employment by qualification over time

This graph shows the proportion of the working-age population who are in employment, or unemployed and lacking but wanting work, by educational attainment.* Those who are lacking but wanting work are economically inactive and not available to work for various reasons (such as being a student or ill). They are not counted as unemployed.

In 2016 the employment rate for each group had increased compared with 2011. Among workers with a degree or equivalent, the employment rate was 86% in 2016 compared with 83% in 2011. For those with no or unknown qualifications the employment rate was less than half of this in 2016 at 40% and 38% in 2011.

The employment rate increased the most for those with A-levels or equivalent and those with other qualifications. For workers with A-levels or equivalent the employment rate increased by 6 percentage points …

Work and poverty

This graph looks at poverty by age and family work status. In the three years to 2015/16, the largest single group in poverty were adults in working families, at 830,000, followed by 540,000 adults in workless families in poverty. There were also 480,000 children in working families in poverty, compared with 220,000 in workless families.

These numbers have changed dramatically over time. Compared with a decade earlier, there are 270,000 more adults in working families in poverty, and 180,000 more children in working families in poverty. Their workless counterparts have fallen by 20,000 and 110,000 respectively. Some changes were more drastic in the preceding decade: the number of pensioners and adults in workless families in poverty fell considerably to 2005–06, but has fallen less since. If we look over just the last five years, there ar…

In-work poverty and work intensity

This indicator looks at the proportion of people in poverty by the family’s work status. The number of hours worked by members of a family is important for determining whether they are likely to be in poverty or not. Families in which all adults were working full time had the lowest proportion in poverty at 8%. In contrast, those with only part-time employees in the family had the highest rate, with 45% in those families in poverty. Families with a self-employed member also had a relatively high poverty risk at 28%.

Over the last 10 years, the proportion of people in every working family type in poverty has increased. It has increased most for those with one full-time employee and one adult not working (six percentage points) and families with a self-employed adult (five percentage points). There has been less change in the last five year…