UK Unemployment is High, But Government Efforts are Working
On Tuesday the Office for National Statistics reported that unemployment rose 5 percent from August to November in 2020. This resulted in the unemployment rate hitting its highest mark in 5 years. Analysts polled by Reuters predicted an unemployment rise of 5.1 percent during the period.
However, the unemployment rate could have risen more if it wasn't for the government's wage-subsidy scheme. This program actually helped the UK keep unemployment below levels seen in other countries.
"This crisis has gone on far longer than any of us hoped - and every job lost as a result is a tragedy," said chancellor Rishi Sunak. "Whilst the NHS is working hard to protect people with the vaccine we're throwing everything we've got at supporting businesses, individuals and families."
The wage-subsidy scheme works by paying workers who would have been laid off amid the pandemic. The most recent data shows that the program is supporting 2.4 million workers, but has supported more than 9 million since its inception in spring 2020. The cost of this program is high, with its recent extension through the fall costing around $63 billion.
Here's how the UK unemployment rate matches up against the US and Germany over the same period:
- UK: 5 percent
- Germany: 6.1 percent
- US: 6.7 percent
Britain's unemployment rate of 5% in November compared to 6.1% in Germany in the same month and 6.7% in the US in December.
However, Bank of England governor Andrew Bailey stated that this value is inaccurate because it does not include individuals who have become discouraged and stopped looking for work.