Unemployment is the human tragedy of a recession, when useful skills lie idle and families suffer as a result of international forces over which they have no control.
For many in the labour market, the days of more than one in 10 people seeking work but unable to find a job are distant history. But with unemployment jumping 0.5 percentage points over the summer, comparisons with the early 1990s no longer look so silly.
The number of people out of work this summer rose at the fastest rate for 17 years and is poised to rise even faster. The north-west of England and London bore the brunt of declining employment rates and, unlike in the early 1990s, the rate among men this summer rose fastest in the south-east, along with Wales and the north-east.
“This year London will be bearing the brunt of [the recession],” says Peter Guttmann of Experian, a consultancy that monitors regional trends in the economy, who thinks the poor performance of the south-east will continue. This is because “the sector most affected is financial services, and that is where the largest fall in employment will take place”.
But the recession is not just a story of banks shedding whizzkids who are able to sell complex products but unable to work out that they pose a risk to the bank as well.
The latest figures show there were 26,000 extra jobs in the economy in the second quarter, just before unemployment really took off. But that seemingly healthy figure hides falls of 9,000, 7,000 and 11,000 respectively in the three sectors of manufacturing; construction, distribution and hotels and restaurants. Redundancies, not yet anywhere near the levels of 2002, are rising fastest in construction and in the service sector areas of finance, transport and restaurants.
Vacancies data also point to gloom ahead. There were 62,000 fewer jobs available in September than a year earlier, a decline of 9.3 per cent, with the biggest drops – all of more than 15 per cent – in construction, transport and communication, and business and financial services.
With the recession rooted in a squeeze on incomes and a lack of funds for borrowers, there are few sectors or regions that will escape a sharp rise in unemployment, says Vicky Redwood, economist at Capital Economics. “Compared with the past, this downturn will be a lot more broadly based.”
Among generations, the rise in unemployment so far has been radically different to the pain of the 1980s, when older workers bore the brunt. Now unemployment has risen faster among workers under 50 than those above it, and it continues to grow rapidly for those above the state retirement age.
In today’s labour market, if there is a job to hold, it is – like the governor of the Bank of England with his five-year tenure – that of a public servant. Public sector vacancies have risen and an official survey shows a 13,000 rise in public sector employment in the second quarter.