Grim figures have recently shed light on the extent of Wales’ issue with the ‘economically inactive’. According to reports, more than half a million working-age adults in Wales are not actively seeking employment. This revelation comes as Wales is revealed to have the lowest employment rate of any UK nation or region. The Office for National Statistics (ONS) has released the latest statistics, indicating that the unemployment rate in Wales dropped by 0.1% from November to January. Despite this decrease, the current unemployment rate in Wales stands at 5.4%, higher than the UK average of 4.4%.
The ONS Labour Force Survey has highlighted that only London has a higher unemployment rate than Wales, at 6.3%. Moreover, Wales has the lowest employment rate among working-age adults in the UK, at 69.9%, compared to the UK average of 75%. The economic inactivity rate in Wales is also concerning, standing at 26%, higher than the national average of 21.5%. Economic inactivity includes individuals not actively seeking employment, such as those on long-term sick leave or students. Currently, there are 503,000 economically inactive individuals in Wales.
Welsh Conservative Shadow Cabinet Secretary for Economy and Energy, Samuel Kurtz MS, expressed concerns about the state of the economy in Wales, calling for a new economic policy to address the challenges. He emphasised the need for a jobs-first approach and criticised existing taxation policies that may hinder economic growth. The ONS noted that regular average wage growth remained at 5.9% in the three months leading to January, outpacing inflation by 3.2%. Furthermore, there was a notable increase in job vacancies during the same period, offering a glimmer of hope for the employment market.
However, with impending increases in national insurance contributions and the minimum wage, businesses are warning of potential job losses and price rises. The recent 0.1% contraction in the economy in January added to the mounting challenges faced by both businesses and individuals. PwC UK economist Paige Tao highlighted that the UK economy is currently in a ‘wait-and-see’ phase, with businesses hesitant to commit to hiring and investment. Despite some positive indicators in the job market, concerns remain about the overall economic outlook.
In response to the data, Work and Pensions Secretary Liz Kendall acknowledged the ongoing challenges in getting Britain back to work and outlined reforms to provide support for those seeking employment. The Welsh Government has refrained from commenting on the ONS Labour Force Survey data, citing concerns surrounding the current economic climate. As the nation grapples with high levels of economic inactivity and unemployment, it is evident that concerted efforts and strategic policy interventions are needed to revitalise the Welsh economy and create more job opportunities for its residents.
This latest report underscores the pressing need for comprehensive economic reform and targeted support for businesses and individuals in Wales. The data paints a stark picture of the current economic landscape, with implications for both policymakers and residents alike. It is crucial for stakeholders at all levels to work together towards sustainable solutions that promote economic growth and reduce barriers to employment in Wales.