Nearly a million workers seem to have been overlooked by unreliable official data, paving the way for concerns over the accuracy of the UK’s employment statistics, Wales Online reports. The Resolution Foundation, a think tank, claims that the Office for National Statistics (ONS) has misrepresented trends in the job market due to flawed figures from its Labour Force Survey (LFS). According to the foundation, the LFS has underestimated the growth in employment by around 930,000 workers since 2019. The pandemic has led to poor response rates to the survey, prompting economists to question the reliability of the data provided by the ONS.
The Resolution Foundation decided to create its own employment estimate for the UK using data from HM Revenue and Customs payroll, self-employment figures, and the latest ONS population data. This alternative estimate suggests that the employment rate could be higher, at around 76%, compared to the official rate of approximately 75% reported by the ONS. The inaccuracies in the data could also impact the reported unemployment rate, currently at 4.3% in the third quarter, as well as the level of inactivity among the workforce, which has been on the rise.
Adam Corlett, principal economist at the Resolution Foundation, highlighted that the official statistics have failed to accurately depict the UK labour market’s situation post-pandemic. He emphasised that the LFS could be missing nearly a million workers, leading to an underestimation of people’s job prospects, overstatement of economic inactivity, and potentially inflated productivity growth figures. The think tank believes that this unreliable data could hinder policymakers in formulating effective strategies.
The think tank also raised concerns about the declining response rate to the ONS’s jobs survey, which plummeted from 39% to just 13% between 2019 and 2023. This drop in responses, along with an inadequate representation of workers from outside the EU, has further contributed to the data discrepancies. The ONS acknowledged the issues with the LFS data and mentioned that they are relying more on other sources like HMRC payroll data. Efforts to improve response rates, including increasing interviews and enhancing incentives, have been implemented to enhance data quality.
The ONS reassured that ongoing improvements to the LFS estimates, such as increasing the sample size and incorporating face-to-face interviews, aim to provide a more accurate reflection of the job market. Collaborating with external experts, the ONS is exploring additional actions to address the data quality concerns raised. The Resolution Foundation’s appointment of Ruth Curtice, former Treasury director of policy, as the new chief executive signals a commitment to addressing data challenges and shaping future policies based on more reliable information.
In conclusion, the discrepancies in official data regarding employment in the UK highlight the importance of accurate statistical monitoring for effective policymaking and economic planning. The Resolution Foundation’s critique of the ONS’s Labour Force Survey brings attention to the need for transparent and reliable data collection methods to ensure accurate representation of the job market landscape. As efforts continue to enhance data quality and response rates, stakeholders are hopeful for improved insights into the evolving labour market dynamics post-pandemic.