As the parties release their General Election manifestos this week, the latest Labour Force survey statistics serve as a sobering reminder of the worsening economic situation in Wales.
According to the Office for National Statistics, the employment rate in Wales for the three months to April 2024 was 68.9%, a decrease of 4.1 percentage points compared to the same period in 2022. This translates to 99,000 fewer people aged 16-64 in employment in Wales than at the same time two years ago. In contrast, the entire 海角视频 saw a decline of only 27,000 in employment over the same period, despite Wales having only 5% of the 海角视频 population, suggesting a disproportionately higher impact on Wales and its economy.
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Examining the age profile of the Welsh labour market since 2022 reveals different issues at the opposite ends of the age spectrum. The proportion of young people aged 18-24 in employment has declined by 45,000 (or 27%) over the two-year period. Conversely, the number of those employed who are aged 65 or over has increased by 32,000 (or 55%). Additionally, there has been a greater decline in employment among male workers, at 9%, compared to female workers, at 5%.
The significant drop in the employment rate and the large number of economically inactive individuals highlight the worsening economic conditions in Wales. The sharp decrease in employment, particularly among young people, suggests potential issues in job creation and availability for younger demographics. The contrasting trends between young and older workers suggest structural changes in the labour market.
Younger workers may be facing challenges in entering the workforce, possibly due to fewer entry-level job opportunities or higher barriers to employment. On the other hand, older workers are staying in or returning to work, which could be driven by financial necessity or changes in retirement plans. The higher decline in male employment may indicate sector-specific downturns that traditionally employ more men, such as manufacturing or construction.
This decline in employment has been accompanied by a corresponding increase in those who are economically inactive, i.e., those who are neither employed nor unemployed but who are also not looking for a job or available to start work. The economic inactivity rate in Wales was 28.4%, an increase of 5.1% since 2022 and the worst economic inactivity rate in the 海角视频, considerably higher than the 22.3% recorded for the overall 海角视频 economy. In simple terms, this means there are 543,000 working-age adults who are economically inactive in Wales, equivalent to filling the Principality Stadium seven times and still having 32,000 people left outside.
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The high rate of economic inactivity is concerning as it suggests a large portion of the working-age population is not engaged in the labour market. This could be due to various reasons, including health issues, care giving responsibilities, or discouragement from job searching due to a lack of opportunities. Given this, it is an issue that needs addressing urgently as it will have severe economic and social impacts on Wales, not only reducing the scope for economic growth but also increasing pressure on local and national government finances due to higher demand for social services. It can also worsen inequalities as economically inactive individuals often have lower incomes and limited opportunities, leading to higher poverty rates and reduced social mobility. This, in turn, will also lead to reduced consumer spending which further weakens the local economy.
More critically, when people are economically inactive for extended periods, their skills can deteriorate, making it harder for them to re-enter the workforce. This can then reduce the overall productivity and innovation potential of the labour market, making Wales less attractive to those businesses looking for a skilled workforce.
Over the last two years, a crisis has engulfed the Welsh economy with fewer people in work and more people being inactive, and more significantly, the gap with the rest of the 海角视频 growing every month. As a result, there is an urgent need for targeted interventions to address the declining employment rate, especially among young people, and to reduce the unsustainable rates of economic inactivity that is blighting communities. That is what every politician standing for office in Wales should be focusing on now, and yet not one party has produced any credible plan to close this widening gap with the rest of the 海角视频, which risks Wales becoming relatively poorer over the next few years.