London Daily

Focus on the big picture.
Thursday, Jul 24, 2025

Where are Britain's missing million workers?

Where are Britain's missing million workers?

There could be as many as a million missing workers in the UK job market, experts say.

Latest figures suggest that the vast majority of livelihoods survived the end of the furlough scheme, designed to protect the economy from the ravages of Covid.

Fears of a huge spike in unemployment when the support was withdrawn have failed to materialise.

On the contrary: with vacancies at a record high of 1.2 million, many employers are struggling to cope with a shortage of skilled workers.

On Thursday, the government announced plans to get 500,000 jobseekers into jobs by the end of June, with those claiming Universal Credit having to look for jobs outside their chosen field more quickly or face sanctions.

According to the director of the Institute for Employment Studies, Tony Wilson, the problem is that the pandemic has caused the UK labour market to shrink.

"We're seeing unemployment falling, but we're also seeing employment quite a lot lower than it was before the crisis began," he told the BBC.

So how has that happened?


Well, since the onset of coronavirus, there has been a big rise in the number of people classed as "economically inactive" - that is, people who are not looking for jobs and are not available for work.

The Office for National Statistics (ONS) reckons that there are 400,000 more people in that category than there were before the virus hit.

Darren Morgan, director of economic statistics at the ONS, says that total "increased sharply" at the beginning of the pandemic, a rise he describes as "understandable".

"If you lost your job then, there was little point in looking for one, given the economy was closed," he told the BBC.


But since then, the number of economically inactive people has proved "far stickier" than the number of people out of work, he adds.

"We have not seen falls like we've seen in unemployment, and this is particularly the case for those over 50," he said.

That, of course, includes some people who have chosen to take early retirement, although others may feel the choice has been made for them.

Recent research by the Resolution Foundation think-tank also suggests that fewer young men are now economically active, perhaps due to fear of illness or suffering with long Covid, while more women have taken up roles due to the rise in flexible working.

Who else is economically inactive?


Tony Wilson of the IES says students are also a factor.

"A lot of young people decided to stay in education instead of entering the labour market a year ago," he said.

"But actually, more recently it's been growing because of longer-term ill-health" - a problem that includes people suffering from the after-effects of the virus known as "long Covid".

"All told, we think because the labour market was growing pretty consistently over the last few decades, the fact that it's now gone into reverse means that this gap, this half a million gap in employment, is even larger when you account for the growth in the labour market that we were seeing," Mr Wilson says.

"We think there's a gap of about a million people between what the labour market would have been like without Covid and where it is now."

Are there other factors?


Many of the labour shortages in particular sectors have been attributed to a decline in the number of foreign workers in the UK.

Because of a combination of Covid and Brexit, many EU nationals who worked in the UK have returned to their countries of origin.

Mr Wilson of the IES believes that the lack of migrant workers is responsible for the one-third of the shortfall in the labour market, while the rise in economic inactivity accounts for the other two-thirds.

Which sectors are worst affected?


Kate Shoesmith, deputy chief executive of the Recruitment and Employment Confederation (REC), says the run-up to Christmas was "a touch-and-go moment" for many businesses, with Covid and recruitment problems coming together.

"It was a combination of the lowest candidate availability we've ever known and absence rates creeping up," she told the BBC.

Now Covid sickness rates are settling down, but shortages are still "a big sticking point", she says.

She singles out healthcare as one of the worst-affected sectors currently, with the NHS and private providers trying to woo a limited pool of skilled workers amid high demand for services.

"Sometimes the NHS will be paying more to retain staff, because the NHS and the private sector are competing on wages," she says.

Elsewhere in the economy, efforts to address the chronic shortage of lorry drivers have borne fruit, but at the price of attracting people from other sectors, such as fork-lift truck drivers or warehouse workers, she says.

"You have to look at the supply chain as a whole. There's a sense that we're robbing Peter to pay Paul."

And the beleaguered hospitality sector is under renewed pressure to raise wages, while not having had the chance to replenish cash reserves over the festive season because of Plan B Covid restrictions, she adds.

So what's the solution?


Ms Shoesmith says the answer lies in persuading the economically inactive to return to the job market.

But doing it properly, she says, will require a joint effort between the public and private sectors.

Jobcentres and recruitment agencies "working hand in hand" could rebuild the confidence of people who have dropped out of the job market and help them back into work, she adds.

"After the 2007-08 crash, there was a shared sense of purpose, a combined effort," Ms Shoesmith says.

"Jobcentres can get people in, while recruiters can offer deep understanding of a sector," she says. "We've done it before and we can do it again."

Newsletter

Related Articles

0:00
0:00
Close
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
Trump Walks Back Talk of Firing Fed Chair Jerome Powell
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Irish Tech Worker Detained 100 days by US Authorities for Overstaying Visa
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
×