THOUSANDS of people in Scotland are giving up on the job market altogether, having failed to find work, analysts warned yesterday, as new figures revealed a marked slump in the number of people in employment.
New labour market figures showed that the number of people in work fell by 27,000 over the past quarter, by far the biggest drop of any nation or region within the UK.
Ministers in London and Edinburgh both chose to highlight a fall in unemployment which was also confirmed yesterday, as Scotland’s headline rate fell below the UK’s once again.
But economists said the picture remained “worrying”, warning the drop in both unemployment and employment suggested many people were falling into a third “economically inactive” category, which includes students, the long-term sick, unpaid carers and early retirals.
Professor Brian Ashcroft, of Strathclyde University’s Fraser of Allander Institute, said that since the start of the recession the number of inactive people in Scotland had risen by 102,000.
He and others warned that many of the group may have been forced to give up on looking for a job given the state of the economy. However, focusing on the official unemployment numbers, Scottish ministers yesterday said the country had recorded its biggest drop since the start of the recession, with the numbers of those out of work and looking for a job falling by 19,000 to 204,000 over the August to October period.
The unemployment rate now stands at 7.6 per cent, back below the UK average of 7.8 per cent.
The youth unemployment rate – which covers 16 to 24-year-olds – fell by 4.3 per cent over the year to 21.1 per cent, slightly below the UK rate. The number of people claiming Job Seekers Allowance went down by 1,100 from October to 139,500 in November – 3,100 fewer than the same period last year.
Finance secretary John Swinney said the figures showed Scotland now had the lowest unemployment of “all UK nations”.
He added: “We welcome this fall in unemployment over the quarter and the substantial drop in youth unemployment over the year in particular.”
Secretary of State Michael Moore also welcomed the drop in unemployment. However, others warned the headline figure hid a more troubling picture of a stubbornly slow job market.
Professor John McLaren, of the Centre for Public Policy for Regions at Glasgow University, said: “While the unemployment figures look quite good, more worrying is the employment rates, which are probably more relevant to the overall health of the labour market.
“People may just have given up looking for work”.
In total, the figures showed there were now 2,463,000 Scots in employment, down 27,000 compared to the previous three month average and down 7,000 compared to last year.