Defining unemployment

Right now, over 55,000 people in Northern Ireland know the everyday pressures of unemployment but the question of who exactly is unemployed has several answers.

Government statistics divide the labour market into three groups: the employed, the unemployed; and the economically inactive.

Northern Ireland has the highest working age economic inactivity rate in the UK, at 28.8 per cent. Some of the reasons for being within that group are understandable e.g. study (28 per cent), illness or disability (27 per cent), looking after children at home (23 per cent), early retirement (14 per cent).

Eight per cent of the economically inactive, i.e. around 44,800 people, do want to work but they fall outside the official unemployment definition as they have given up looking for or are otherwise not ready to start a job.

As a rule, unemployment means not having a job but being able and willing to work. The official definition, produced by the International Labour Organisation, defines the unemployed as people who are either:

• without a job, want a job, have actively sought work in the last four weeks and are available to start work in the next two weeks; or
• out of work, have found a job and are waiting to start it in the next two weeks.

This definition’s international acceptance allows for accurate comparisons between countries over time. In Northern Ireland, this is recorded in DETI’s Labour Force Survey (LFS).

A second measure is the claimant count i.e. how many people receive the jobseeker’s allowance. Claimant numbers are added up by Social Security Agency offices and are therefore available earlier than the LFS. International comparisons are difficult as benefits rules vary in different countries.

These two measures mostly overlap but there are some discrepancies. Some benefit claimants are allowed to work in low-paid or part-time jobs and so the LFS counts them as ‘employed’. Others, who are marked ‘unemployed’ by the LFS, cannot claim benefits due to the rules e.g. their spouse may be working.

There is also margin for error in both sets of figures. The LFS is based on a random sample of the workforce aged over 16 (i.e. 3,250 households every three months) rather than all employees. Fraud inevitably means that some claimants are wrongly receiving benefits, and that some of the ‘unwell’ among the economically inactive are in good health.

Both statistics are published monthly but the timing of their collection varies. The LFS is conducted on a rolling basis and each release provides an average for the latest available three-month period. Claimant counts cover the month immediately before publication.

Joblessness always varies geographically. Northern Ireland’s 6.6 per cent LFS rate compares well within the UK, where North East England has the regional high (9.4 per cent), and the Republic’s 13.3 per cent. Our 6.4 per cent claimant count, though, is a close second to the highest regional rate (6.6 per cent), again in the North East.

Locally, claimant counts range from 3.1 per cent in Castlereagh to 7.3 per cent to Derry. More men than women are jobseekers, which pushes Derry’s male claimant rate up to 10.9 per cent, and brings Castlereagh’s female percentage down to 1.6.

Statistics cover April-June 2010 except for the claimant count (July 2010)
Source: DETI Monthly Labour Market Report, August 2010.