UK staff quitting workforce at a higher rate than nearly all developed countries
Data from the ONS showed a nearly 1% rise in economic inactivity over the pandemic
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Your support makes all the difference.The proportion of the workers who exited the workforce during the pandemic and have not returned since is higher in the UK than in nearly any other developed economy, new data has revealed.
Official figures released on Monday show that the rate of economic inactivity rose by 0.9% in the UK between the end of 2019 and the middle of 2022.
It means that around 565,000 people who were previously either in work or looking for work are now doing neither.
The Office for National Statistics (ONS) said there were only three other countries in the OECD – Columbia, Chile and Switzerland – with a higher increase in dropouts than the UK.
There are still uncertainties as to whether this effect on participation will be a permanent feature of the pandemic, though this UK participation puzzle remains a challenge for policymakers
The average across the OECD’s 37 members was a 1.1% fall in economic inactivity.
“The evidence so far implies that some of the behavioural changes of workers in their ability and willingness to work have been more specific to the UK,” the ONS said.
“The challenge of a lower active population would not appear to be a global phenomenon, highlighting that the UK may have specific challenges if these inactive workers do not return to the labour force.
“There are still uncertainties as to whether this effect on participation will be a permanent feature of the pandemic, though this UK participation puzzle remains a challenge for policymakers.”
The long-term sick and those who are aged 50 and above are concentrated among the new dropouts.
It has left many businesses in the UK struggling to get staff to fill vacant roles.
The statisticians said the low unemployment level that currently exists in the UK has more to do with people exiting the workforce rather than unemployed people finding work.
“Low unemployment in the UK reflects the increase in inactivity, not an increase in employment,” it said.
“It also reinforces the challenge of the UK economy, where the tightness in the labour market reflects that labour demand is above pre-coronavirus levels and that labour supply is below pre-coronavirus levels.”
However it also cautioned that part of the rise in economic activity is due to the labour force participation rate being historically high just before the pandemic.
A fall in participation had been expected, but not as large as the one that has been observed.