The number of people neither working nor looking for work has risen since the pandemic to nearly nine million. Figures analyzed by Sky News show that this is due to long-term illnesses and, in particular, mental health conditions. Economic inactivity levels among long-term patients increased by 537,500 between the year to June 2019 and the year to June 2022. About 454,300 can be attributed to mental health conditions such as depression, stress and anxiety disorders. The figures refer to people aged 16 and over. Declining participation rates pose challenges for businesses. Although the number of job vacancies is falling after the post-lockdown job boom, they remain near record levels. This means employers have fewer workers to choose from when filling roles and limits the potential for the economy to grow. The evidence also suggests that employers could better support the workers they have. The number of employed people with long-term mental health conditions increased by 816,400 over the same period. Figure: Those working due to mental health increased by 454,300 A recent report by professional services firm Deloitte found that the annual cost to UK employers of poor mental health has risen by 25% since the start of the pandemic. This can be measured in levels of absenteeism, productivity and turnover. Policy makers are alert to the problem. Rising economic inactivity ‘will hold back UK growth’ Jonathan Haskel, a member of the Bank of England’s rate-setting committee, warned last month: “In most countries in the developed world, the rate of economic inactivity, that is the proportion of people neither working nor actively looking for work… has risen over the pandemic, but then subsided. “But the UK is different… This increase in economic inactivity will hold back UK growth.” Growth will be key for the government as it seeks to plug a gap in public finances. If more people are unemployed, this means less tax revenue for the Treasury and higher levels of spending on unemployment benefits. Figure: The number of employed people with long-term mental health conditions increased by 816,400 Britain’s disability benefits bill has already reached £14.7 billion. Four-fifths of the increase in the number of people receiving disability benefits over the past two decades is due to psychiatric conditions, such as mental health problems and learning disabilities. Increase in disability benefits ‘led by mental health conditions’ Tom Waters, economist at the Institute for Fiscal Studies, said: “If these trends continue, this will continue to put pressure on these costs, particularly at a time when the government is struggling to cover the deficit. “When you look at the last two decades, there’s been a really big rise (in the number of people) in disability benefits. That’s almost entirely due to mental health conditions. So we’re looking at something in the order of a million people now claiming disability benefits for mental health. That’s almost half of everyone on disability benefits. If you look back in the early 2000s, it was only about a quarter.” At 3.5%, Britain’s unemployment rate is at a record low, but belies worrying long-term trends that have been exacerbated by the pandemic. A mental health epidemic is leading to an increase in economic inactivity among the chronically ill. These people aren’t looking for work, so they don’t show up in unemployment figures, but the longer they’re out of work, the harder it will be for them to get back in. A smaller labor force means there are fewer people to produce the goods and services that help the economy grow. It also increases competition for workers, raising wages at a time when inflation is rampant. The Bank of England has already asked workers to show “restraint” when asking for pay rises but, with competition rife, employers may have no choice but to bail on workers.
