Kevin Rowan column

Aug 22 2005 By Kevin Rowan, The Journal

The economic figures released last week showing a significant rise (15,000) in the number of people claiming unemployment benefit caused a good deal of unappealing attention.

The North-East sits well clear at the bottom of the unemployment league among the English regions (although London also endures a high unemployment rate of 7.1%).

But the headlines and figures don't hold much value on their own. We need to scratch below the surface and delve deeper to understand what this actually might mean regarding the economy.

Unemployment is only one indicator of how the region's economy is doing. There are other measures that indicate a much less negative outlook. Firstly, perhaps the key indicator is not the people out of work, but people in work, earning money. For a couple of years now the employment rate in the region has been steadily increasing. Despite this bump in the unemployment stats, the employment rate has continued to do just that. The same set of data released by the Office for National Statistics that showed unemployment up, also showed employment up, by 0.6% on the previous year. That's good news! The North-East economy is continuing to grow, and faster than all but two other regions.

So, where have all these newly unemployed workers come from?

The region has a much higher rate of economically inactive people than other regions and initiatives like Pathways to Work and the unfortunately titled Northern Way `worklessness pilots' have been seeking to support these individuals to find opportunities in the labour market. So while unemployment and employment rates have both gone up, it is economic inactivity that has gone down. The ONS data shows that this is down by 23,000 or 1.5% on the previous year, and that is a significant, positive development for the region, although there remain almost 400,000 economically inactive citizens in the region still.

People are unable to work for all kinds of reasons. Many people are inactive because of illness or disability, many because they have caring responsibilities.

Many lack the necessary skills to participate in the modern labour market.

Increasingly, however, we are understanding that with the right, effective, tailored supports, more and more individuals are able to move from worklessness into looking for work.

Kevin Rowan is regional secretary, Northern TUC