CIPD warns recession impact on unemployment worse than suggested

The impact of the recession on unemployment has been much deeper than headline figures indicated, the HR industry body has warned.


The Chartered Institute of Personnel and Development’s (CIPD) Work Audit – The jobs recession in 3D report found 1.31 million people were made redundant during the recession, which was double the net fall in employment, and equivalent to 4.4% of people in work before the downturn.


The report showed there were 6.2 million new claims for jobseekers’ allowance between April 2008 and November 2009, which was 7.5 times the rise in the unemployment claimant count during the recession, highlighting the degree to which many people were struggling to find permanent jobs.


The CIPD also found that two-thirds of those made redundant were paid less when they found a replacement job, with the average pay cut being 28%.


John Philpott, the CIPD’s economic adviser, said: “Although the scale of job loss in the recession is much less than originally feared, and much less than might have been expected given the scale of the contraction in the economy, it is evident that the direct experience of redundancy, repeat spells of unemployment and pay penalties has nonetheless been widespread.


“Given that redundancy also affects the families, friends and former colleagues of those made redundant, the full experience of the jobs recession has been wider still. This is likely to have a much greater impact on perceptions of job security and consumer confidence during the recovery than the simple ‘unemployment situation is better than feared’ story of the moment would suggest.”


Official unemployment figures published last week revealed the number of people unemployed fell by 7,000 over the quarter, to reach 2.46 million, but the number of people unemployed for more than 12 months rose by 29,000, reaching 631,000.

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