New report puts Aberdeen unemployment rate at 15.6%

New report puts Aberdeen unemployment rate at 15.6%

Actual unemployment in Aberdeen is four times higher than the official figure and above the Scottish average, a new report claims.

Center for Cities’ latest annual economic assessment of the UK’s largest urban areas focuses on a broader definition of unemployment than the UK government’s official figures.

His “hidden” unemployment definition includes people who have left the labor market for various reasons but would like to work, but not students, retirees or those looking after family.

Research organization Center for Cities estimates around 350,700 people in Scotland fall into this category.

The UK Government needs to address its lack of action so far and act quickly to create more opportunities that get people back into the workforce in Scotland.”

Andrew Carter, CEO of Center for Cities.

The Cities Outlook report puts the “hidden” unemployment rate in Aberdeen – official plus “involuntary” unemployment – at 15.6%, compared to an official rate of 3.9% in the Granite City.

Dundee (16.3%) and Glasgow (16.1%) are also above the Scottish average of 14.9% for “hidden” unemployment. The UK average is 12.1%.

Edinburgh is said to have a “hidden” rate of 9.1%, making it “one of the UK’s best performing cities”, although the figure is more than three times the capital’s official unemployment rate.

Aberdeen from the air.

Center for Cities’ research focused on the UK’s 63 largest cities and towns.

North of the border only Edinburgh, Glasgow, Aberdeen and Dundee are included.

The 63 “primary urban areas” account for 1.2 million people who are officially classified as unemployed, but this is “only the tip of the iceberg”, the report says.

3.5 million missing British workers

It adds: “Beneath the surface there is a much larger and more complex situation at play.

“Adding those who are involuntarily inactive reveals an army of up to 3.5 million missing workers.”

Long-term illness is one factor, but Center for Cities says a long-term job shortage is the “bigger challenge” facing many urban areas.

Image: Shutterstock

North economist Tony Mackay said the conclusions reached in the “very academic” report were “certainly interesting”.

But he also expressed “doubts about the accuracy of those for Aberdeen”.

He said: “There is no doubt that the official unemployment statistics for cities like Glasgow and Dundee are too low. Those cities have large numbers of other people who are economically inactive, particularly the over 50s, so the numbers of people not working is undoubtedly much higher than the official unemployment figures.

“This was not the case in Aberdeen, where there has recently been a large increase in local unemployment due to the downturn in the North Sea oil and gas industry.”

Economist Tony Mackay. Image: Sandy McCook / DC Thomson

Mr Mackay added: “There is hope that many of the lost jobs will be replaced by new ones in renewable energies, such as offshore wind, but progress so far has been very disappointing.

“There have also been job losses due to the coronavirus pandemic and other problems affecting other industries such as retail and hospitality.”

Center for Cities “understands” the recent large increase in unemployment in Aberdeen, he said.

Report’s estimates for Aberdeen ‘should be much lower’

He continued: “Many of the people working in the North Sea oil and gas industry are not local residents and unless there is a big increase in renewable jobs I expect many of them will leave the North East .

“This is not the case in Dundee and Glasgow, where most of those out of work were born and raised locally.

“The report’s estimates for Aberdeen should be much lower and closer to those for Edinburgh and the UK average.”

I think the Center for Cities report misunderstands the recent big rise in unemployment in Aberdeen and Aberdeenshire.”

Tony Mackay, economist.

A spokeswoman for the Center for Cities said the data for Aberdeen focused on residents already out of work and classed as “economically inactive”.

The spokesman added: “If a person was working in Aberdeen but lives elsewhere and has become unemployed then they are not counted in our figures as they do not live in Aberdeen.”

Andrew Carter, chief executive of Center for Cities, said: “We have seen many headlines referring to the record low numbers of jobseekers.

“Cities Outlook shows there is actually a job shortage, with a significant regional breakdown in involuntary inactivity rates.

Action to date ‘inadequate’

“With Britain now likely to enter recession, the UK Government needs to address its inadequate leveling performance so far and act quickly to create more opportunities that bring people back into the workforce in Scotland.

“This will require setting out and implementing an agenda that delivers much-needed investment in skills and public services, while supporting job creation in hard-to-reach places.”

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