The trends

Despite eight years of uninterrupted economic growth, the rate of unemployment in December 1999, as measured by the number of people registering and claiming benefit, was higher than it had been in January 1971 (Figure 3.1). Moreover, the comparison – 3.3% in 1971 and 4.0% in 1999 – is hardly fair, since the earlier figure includes many people (for example, people aged under 18 and men aged over 60) who are no longer considered to be part of the labour market. Furthermore, at the turn of 1971, unemployment had been rising steadily for 18 months from a low point of 498,600 in June 1969, and had reached 690,000. In December 1999, unemployment had fallen to 1.14 million, from a high of 2.96 million in 1993.

Virtually all the changes that have been made in the method of counting unemployment since 1971 have reduced the year-on-year count of unemployment. This means that the official series presented in Figure 3.1a, while accurate as a record of the number of people claiming benefit on account of unemployment, does not truly compare like with like. For this reason, the new Labour government has begun to make more use of the unemployment measure deployed by the International Labour Organisation (ILO). This is based, not on a count of people receiving unemployment-related benefit, but on the reports of respondents to the Labour Force Survey as to whether they consider themselves to be unemployed and seeking work. As is apparent from Figure 3.1b, the ILO measure reveals higher levels of unemployment than are indicated by the unemployment count.