Northern Ireland’s record low unemployment rate is a positive step, but the region still has a high proportion of economically inactive adults, The Journal reports.
The unemployment rate in Northern Ireland was around 1.9 per cent between April and June, the lowest on record. It has fallen by 0.7 per cent over the past year.
However, the number of people who are “economically inactive” is still a concern and will be a problem for businesses trying to recruit workers in the future, Anastasia Desmond, senior economist at Ulster University, said.
The unemployment rate takes into account people who are unemployed but looking for work, while the economic inactivity rate takes into account those who are unemployed and not looking for work.
The economically inactive group includes both adults who are not looking for work and those who are unable to work for reasons such as study, disability or retirement (aged 16 to 64).
According to new figures released by the Northern Ireland Statistics and Research Agency, there are 807,700 PAYE-paid workers in Northern Ireland as of July 2024, an increase of 2.3 per cent on last year. The median monthly wage for workers in July 2024 was £2,249, an increase of £164 (7.9 per cent) on last year.
The employment rate – that is, the proportion of people aged 16 to 64 in work – rose by 1.2% over the year to 71.6%. The economic inactivity rate – that is, the share of people aged 16 to 64 who are not working, not looking for work and not ready for work – increased 0.5% over the quarter and decreased 0.7% over the year to 27.1%.
Speaking to The Journal, Desmond said it was positive that the unemployment rate in Northern Ireland had fallen below 2 per cent. She also said:
It shows that people who want jobs are able to get them, which is very positive.
We’re always going to have a certain level of unemployment between people changing jobs, so it’s not a realistic expectation to get that ever down to zero, but having that lower rate means that people who are searching for jobs are able to find them. That indicates a healthy labour market.
Desmond attributed the rise in employment to strong economic growth since the COVID-19 pandemic and improved government support compared to what was seen in the 2010s after the financial crisis.
The low rate of permanent redundancies during the pandemic means that businesses that are now trying to expand and hire more workers are hiring fewer people, meaning there are more opportunities for people looking for work or looking to move into a new field or sector, Desmond noted.
No record employment number
However, Desmond warned that the country also has a high proportion of economically inactive people. She outlined:
What we’ve got at the minute is a record unemployment number but we haven’t got a record employment number. It’s not quite matching up – those people aren’t going directly from unemployment into employment. There’s some of them who are joining the pool of being economically inactive. What we would really want to see is, while that unemployment number is coming down, we’d also look for those employment numbers to be really pushing upwards. But what we’re seeing is we’ve still got a really big, quite stagnant pool of people who are economically inactive in Northern Ireland.
Desmond said the solution to the problem must involve helping people from the economically inactive group overcome any barriers they face in entering or returning to work. She concluded:
It’s about making sure they’ve got the right skills and qualifications to meet the jobs that the labour market is requiring today and making sure that they’ve got the experience and training behind them to get back into the labour market, but also stay in the labour market as well so they’re not swinging backwards and forwards between economic inactivity, unemployment and employment.
