The number of people who are neither working nor looking for work has increased to about nine million, and statistics indicate that long-term illness and, in particular, mental health disorders are to blame.
The United Kingdom is engulfed in a mental health crisis that is prompting workers to leave the labor force and fueling workforce shortages.
Since the epidemic, the number of persons neither working nor seeking employment has increased to about nine million.
This is being driven by long-term illness and, in particular, mental health issues, according to the data.
The number of long-term unwell who were economically inactive increased by 537,500 between June 2019 and June 2022.
There are around 454,300 cases of mental health disorders, such as sadness, stress, and anxiety. The numbers pertain to those aged 16 and older.
Falling participation rates present difficulties for firms. Although the number of job openings is decreasing following a post-lockdown employment boom, they remain at record highs.
This means that firms have fewer candidates to pick from when filling positions, hence limiting the economic expansion potential.
Moreover, the data suggests that businesses should provide better support for the current workforce. During the same period, the number of employed individuals with long-term mental health disorders increased by 816,400.
A recent report by the professional services firm Deloitte indicated that the annual expenses of poor mental health UK firms have climbed by 25 percent since the outbreak began. This can be quantified by absenteeism, productivity, and employee turnover rates.
Policymakers are cognizant of the issue.
An increase in economic inactivity will impede UK growth.
Jonathan Haskel, a member of the rate-setting committee at the Bank of England, issued a warning last month: “During the pandemic, the economic inactivity rate, defined as the proportion of people neither working nor actively seeking employment, rose in the majority of developed nations, but then declined.
“However, the United Kingdom is different. This increase in economic inactivity will impede UK growth.
As the government strives to cover a big shortfall in the public finances, growth will be crucial. if more people are unemployed, the Treasury will collect fewer taxes and spend more on unemployment benefits.
Four-fifths of the increase in the number of disability benefits recipients over the previous two decades has been driven by psychiatric disorders such as mental health issues and learning difficulties.
Increase in disability compensation attributed to mental health issues.
Tom Waters, an Institute for Fiscal Studies economist, stated: “If these trends continue, it will continue to put pressure on these costs, especially at a time when the government is attempting to reduce the deficit.
“Over the last couple of decades, there has been a significant increase in the number of people receiving disability benefits. This increase has been almost entirely driven by mental health conditions. Approximately a million people are now claiming disability benefits for mental health, which accounts for nearly half of all people receiving disability benefits.
At 3.5%, Britain’s unemployment rate is at an all-time low, but it conceals worrisome long-term patterns that the epidemic has exacerbated.
The rise in economic inactivity among the chronically ill is driven by an epidemic of mental illness. These individuals are not actively seeking employment, so they do not appear in unemployment statistics, but the longer they remain unemployed, the more difficult it will be for them to return to the workforce.
There are fewer workers to create the commodities and services that stimulate economic expansion when the labor force is diminished.
It also raises competition for workers, driving increasing pay during a period of severe inflation.
The Bank of England has already urged workers to exercise “caution” when requesting salary increases, yet fierce competition may force firms to compensate workers.
