Unemployment has risen to its highest level since 1997, and is set to continue increasing dramatically in the near future as the recession starts to bite.
According to a report from the Office for National Statistics, the rate of employment fell by 0.4 percent in the quarter from June to September, with a total of 140,000 people being thrown into unemployment. The total number of unemployed now stands at 1.8 million. Tellingly, the number of hours worked over the same period increased by 0.9 million, illustrating that workers are being pushed to work longer hours both as a means of maintaining productivity and of ensuring pay packets can cover the cost of inflation.
Economists at the Royal Bank of Scotland (RBS) and BNP Paribas predict that the worst is yet to come, with up to 2.7 million people facing unemployment by the beginning of 2010, the highest rate since 1994. RBS should know, as it announced 3,000 job cuts itself in mid-November. The Confederation of British Industry (CBI) is even less optimistic, predicting nearly 3 million unemployed by 2010.
Some other worrying statistics have come recently from the CBI, which claims that 29 percent of small and medium sized manufacturers (businesses employing fewer than 500 people) have reduced their workforce over the past quarter, while only 17 percent expanded their number of employees. 27 percent claim that they will need to reduce their workforce over the next three months. Small and medium businesses are responsible for around 50 percent of the private sector workforce.
The hardest hit section of the workforce has been young people aged 18 to 24, with a rise of 12.8 percent in those unemployed for up to six months over the last quarter. Similarly, the number of workers over the age of 50 who have been unemployed for six to 12 months has increased by 29.7 percent over the same period.
Temporary workers are already bearing the brunt of the economic crisis, with employers such as Argos shedding temps on a large scale (5,000 redundancies in the case of Argos) as a response to a fall in demand. This is a trend spreading across Europe, with tens of thousands of temporary jobs in the firing line across the continent.
In recent weeks several large firms have announced massive lay-offs. BT has announced a cut of 10,000 jobs by March 2009 amid falling profits. Meanwhile Yell, the company that owns Yellow Pages, has announced a cut of 1,300 jobs over the next 18 months. Other job cuts in the pipeline include 2,200 at Virgin, 400 at Swiss Life, 620 at GlaxoSmithKline, 250 at Leyland, 280 at Friends Provident, 220 at Psion, 400 Aberdeen council workers, 345 at Precision Antenna, 300 at Babcock Marine naval supplies and 398 at JCB, to name but a few at the time of going to press.
The collapse of the housing market has led to a fall off in construction work. One construction company, Hanson, has sacked 600 workers, as half a billion bricks lie mothballed in its depots. Housebuilders Taylor Wimpey has also announced 1,000 redundancies. Meanwhile, Wolseley, the building supplies firm, is to cut 2,300 jobs.
Understandably, people's fear of unemployment is on the rise. Search engine Google shows over a ten-fold increase in people searching for the term "job cuts" over the past 12 months.