The U.K. economy is being hammered by record numbers of workers reporting long-term sickness.
The number of people who cited long-term sickness as the main reason for economic inactive has increased by half a million since 2019.
Between the ages of 16 and 64, the number of economically inactive people has gone up by more than 620,000. Even as inflation and energy costs exert huge pressure on household finances, recent U.K. data shows no sign that these lost workers are returning to the labor market.
The U.K. avoided mass job losses as a result of the government subsidizing businesses. The country has seen a labor market exodus unlike anything seen before.
There are a number of factors that could be behind the recent spike, including National Health Service waiting lists that are at record highs, an aging population and the effects of long Covid.
Some industries such as wholesale and retail are affected to a greater extent than others, and younger people have seen some of the largest increases.
The increase has been driven by other health problems or disabilities, mental illness and nervous disorders, and problems connected with the back or neck.
According to Jonathan Portes, professor of economics and public policy at King's College London, the scale of the labor market depletion is likely a combination of long Covid, mental illness, and the current crisis in the National Health Service.
People may have to leave the workforce to care for sick relatives if factors that hurt public health directly are included.
The U.K. has been here before. In the early 1990s, the U.K. saw a sharp recovery, with falling unemployment, but it also saw a rise in the number of people claiming incapacity related benefits.
The government isn't doing a lot about this. There isn't nearly enough support for sick and disabled people to get back to work and the government is harassing people on Universal Credit with penalties and sanctions which don't help much
In his Autumn Statement, Finance Minister Jeremy Hunt said that the government will ask 600,000 people receiving Universal Credit to meet with a work coach in order to increase hours and earnings.
There will be a review of the issues preventing re-entry into the job market and a commitment to crack down on benefit fraud and errors.
The health crisis has left a hole in the U.K. economy, and economists think there are a number of reasons.
The government implemented a decade of sweeping public spending cuts in order to rein in the national debt, according to Portes.
The U.K. was vulnerable because of austerity because of rising waiting lists and falling satisfaction in the health care system.
In the early 2010s, support for people on incapacity and disability benefits was slashed. A sharper difference in health outcomes by income and class has been caused by austerity.
According to the ONS, males in the most deprived areas of England live an average of 9.7 years less than their counterparts in the least deprived areas.
The inequality in life expectancy at birth has increased for both men and women.
Over 7 million patients were on the waiting list for consultant-led hospital treatment in England as of September, according to a House of Commons report.
The report stated that this isn't a recent phenomenon and that the waiting list has been growing rapidly.
In December of last year, the waiting list was over 4.5 million, almost two million more than in December of 2012
The rise in waiting lists was taking place before the Pandemic.
The U.K. has been badly affected by Covid in terms of severity and may have been the result of the country's higher rates of preexisting.
If we have the same Covid wave as other countries, we might get a bigger effect on public health.
Measures to address health-care challenges should be included in any growth strategy from the government.
The economic issue is not just a health issue. In both ways, it is important. The effects on potential output which feed through to these other economic problems is what makes it important.
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