There can be “no quick fix or single policy cure” to the north’s chronic economic inactivity conundrum, a think tank report has found.
But while uncertainties remain, there are things which can be done to improve access to the job market, according to Pivotal, with better health care (including for mental health), social care and childcare all having the potential to allow different people to start seeking work.
Pivotal produced what it says it an initial report to “inform and encourage discussion” about economic activity,
The issue has proven both significant and stubborn, and is also complicated in that in Northern Ireland it is different from other parts of the UK as it is driven more by sickness and disability.
The report sets out an in-depth analysis of inactivity data and offers a mixture of specific statistics but says future research is necessary to come up with longer-term solutions.
More than a quarter of working age people in Northern Ireland (27.7%) are economically inactive, with high and rising rates of sickness and disability a big part of this.
The report says reasons for inactivity are varied and complex, but insist poor levels of support are leaving some people unable to work – at a cost to individuals and families, employers, and to society and the economy as a whole.
Around one in nine working age adults (11.9%) in Northern Ireland are economically inactive due to sickness or disability, compared to just 6.9% across the UK. Sickness and disability is the reason for 43% of all economic inactivity in Northern Ireland, whereas in the UK it only accounts for 32%.
Only 39% of disabled people in Northern Ireland are in work (the UK average is 53%). Many disabled people would prefer to work if they could, but lack the required support or flexibility from employers, and Pivotal’s research indicates this is an area where Northern Ireland needs to improve.
Ann Watt, director of Pivotal, said: “Economic inactivity is a long-standing issue for Northern Ireland. Rates of economic inactivity here have been amongst the highest in the UK for many years.
“The consequences are significant. Economic inactivity can leave people and families in poverty, it can leave them isolated, and it can reduce their life opportunities.
“For people who would like to work but lack the proper support, the right assistance could help them as individuals, and also provide a boost to employers who are struggling to recruit and retain staff – especially now when employment rates are high and unemployment is historically low.”
She added: “It seems likely that some current economic inactivity is due to poor public services at present, like inadequate healthcare provision, lack of social care packages, or shortage of unaffordable childcare. So some policy choices could provide benefits in the short-term.
“But it is important to make clear that, despite its prevalence in Northern Ireland, economic inactivity here remains poorly understood. More research is needed, given this is a complex area of policy with no single policy fix.
“In particular, levels of inactivity due to sickness or disability are especially high in Northern Ireland. The proportion of people who are economically inactive for this reason is growing. This should be a concern for policy-makers.”
Richard Gillan, chair of CBI Northern Ireland, said: “This is a significant and timely report from Pivotal, highlighting a long-standing issue for Northern Ireland’s economy. Businesses continue to report skills shortages and difficulties recruiting.
“Now and in the future, we need to do much better to support people who are currently economically inactive into employment, especially since many of them would like to work. Employers are ready to play their part in offering training, support and good quality jobs.”
Maeve Monaghan, chief executive of NOW Group, said: “While this report is a stark reminder of the high levels of economic inactivity we continue to face, we must remember that behind each one of these statistics is a person with different and often complex reasons for not being able to actively look for work.
“With the right structures and ongoing support many can and will move into employment. Despite delivering significant results, our vibrant third sector is constantly facing funding uncertainty. Our politicians must show leadership if the dial is ever going to move.
“It’s time to properly resource organisations with a proven track record to scale services and support more people into the labour market which will, in turn, reduce businesses’ recruitment pressures and make our workforce more inclusive.”
The report can be accessed at https://www.pivotalppf.org/cmsfiles/Publications/20240430-Economic-inactivity-FINAL-REPORT.pdf