The chief executive of the Royal Society of Arts (RSA) said more than a century of progress in health and wellbeing had backfired, with a direct impact on the economy and emergency living costs. “We are in a situation for the first time, probably since the Industrial Revolution, where health and well-being are in decline,” he said. “Having been an accelerator of prosperity for the past 200 years, health now acts as a brake on the rise of growth and well-being of our citizens.” Speaking at the Health Foundation’s annual REAL Challenge lecture, Haldane said the economy was holding back after a sharp fall in the number of people in the UK workforce since the start of the Covid pandemic. But the former chief economist at the Bank of England said the global health emergency only acted as a “tipping point”. “Spending on health care systems, at least compared to the G7, the UK is at the bottom of the pack,” he said. “It should come as no surprise that we are therefore seeing macroeconomic headwinds such as record job vacancies. We don’t have enough people.” The Bank of England recently warned that it may need to raise interest rates further to prevent workers from demanding inflation-linked pay rises in response to labor shortages. Interest rates have soared since last year to prevent what the central bank says is a second round of knock-on effects from earnings increases on inflation over the next two years. A report by the newly formed Commission on the Future of Employment Support found that the UK is one of only five countries in the industrialized world with a weaker labor market than before the Covid-19 pandemic and is set to have its worst record until the following year. Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. Only Iceland, Switzerland, Latvia, the UK and the US have recorded a lower employment rate since 2019. And while the UK’s employment rate, which measures the number of workers as a percentage of the total workforce, remained weak , Iceland, Switzerland and the US saw an average increase of 2% over the past 12 months. “If these trends continue, then by the first quarter of 2023 the UK may be the only developed economy in the world with an employment rate lower than it was before the pandemic,” the report said. About 600,000 workers have dropped out of the labor force, including 200,000 unemployed for five years or more due to ill health. An estimated 30,000 more people with long-term Covid and unable to work. Around 50,000 more people took early retirement in the past two years, while the number of people who never worked rose by 250,000 with two-thirds of this group made up of students and a third of people with ill-health or a disability unable to enter to work instead of leaving it. The situation is exacerbated by the retirement and lower immigration of the baby boomer generation – “with half a million fewer workers not born in the UK than there would have been on the pre-2016 trend”. Tony Wilson, head of the Institute for Employment Studies, which has backed the commission, said: “We have a real opportunity now to look again at our approach and build something for the future that can support higher growth, better living standards and local economies”.
