Economic inactivity strategy

The forthcoming economic inactivity strategy aims to bring more people into the workforce.

Northern Ireland has had the highest level of economic inactivity in the UK for the past 30 years. Economic inactivity in the working age population is currently at 26.8 per cent, significantly higher than the UK average of 21.7 per cent. Economic inactivity is a separate but connected issue to unemployment. The economically inactive group comprises adults who are neither working (employed) nor looking for work (unemployed).

Around 550,000 people were economically inactive between March and May of this year, 312,000 of whom are of working age. This figure is down by 4,000 people over the past year. For those who are disabled or sick, or are in higher education or enjoying early retirement, the reasons for economic inactivity are straightforward.

Figures suggest that 91 per cent of those who are economically inactive do not want to work, whilst the remaining 9 per cent (49,000) wish to be in employment but lack the skills, qualifications or confidence to apply for jobs.

Between March and May, the employment rate for the working age population was 68.1 per cent, an increase of 1.4 per cent on the previous year. However, the rate remains below the UK average of 73.1 per cent and is the lowest of the 12 UK regions.

By reducing economic inactivity, the strategy aims to increase the employment rate to over 70 per cent by 2023 through skills, training incentives and job creation. The strategy also reflects policy priorities beyond Northern Ireland, such as the European Commission’s target of reaching an overall employment rate of 75 per cent in Europe by 2020.

Employment Minister Stephen Farry has remarked that the strategy will be the only one of its kind in the UK dealing specifically with the economically inactive. He added that in terms of meeting its targets, the strategy requires the challenging transition of more than 30,000 inactive individuals into employment. A consultation took place between January and April and the Executive will discuss the final strategy later in the year.

Those with work-limiting health conditions or disabilities will be helped to move into employment on a voluntary basis. Lone parents will also be a focus of the strategy. It will promote flexible working, extend the working lives of those it helps, and encourage community-led innovative projects. It will also focus on inactivity caused by structural problems in the economy and an individual’s circumstances.

Farry commented that helping people to access government services more easily and increasing job opportunities would help reduce economic inactivity. He added that the strategy would be helping to “break the cycle of inactivity by doing more to help those most at risk of disengaging from the labour market.”

Reasons for economic inactivity

28% – sick/disabled

28% – students

25% – family/carers

11% – retired

8% – other