Low unemployment is a mirage explained only by mushrooming disability benefit

As of February 2023, there were 6.3 million people claiming some form of disability benefit in the UK, representing 9.6pc of the total population. The costs are skyrocketing. 

According to forecasts by the Office for Budget Responsibility, they’ll reach the giddying heights of £52.3bn annually in five years time, 74pc more than last year. 

Small wonder that there are labour shortages when so many people who might work are sitting at home, or in a few extreme cases, fraudulently out on the golf course. 

I hesitate to say we have become a nation of skivers; obviously those with genuine disability, including debilitating mental conditions, need to be supported. But the incentives not to work, especially when it comes to lower paid forms of employment, are all too evident. 

The same might also be said of Universal Credit, used in many cases to top up the proceeds of poorly paying part time employment to a semblance of a living wage. “Underemployment” is becoming as big a problem as unemployment, and indeed is often pursued as a lifestyle choice. 

We may not have seen a surge in officially measured unemployment, in other words, because the welfare system has already created a buffer of unseen joblessness which renders the observed adjustment less potent than it might have been. 

A skills and geographical mismatch between towns and regions where these forms of unemployment are most prevalent, and the places and industries in which labour shortages are most acute, completes the picture of economic dysfunction. 

No recession? Try telling that to the people of Port Talbot in South Wales, where nearly 18pc of the population is on disability benefit. 

These distortions may also help explain why elevated inflation is proving more of a problem here in Britain than other “high income” economies.

After badly lagging the surge in inflation, wage increases have caught up and are now outpacing prices. Most benefits have meanwhile been indexed to inflation, or better in the case of the state pension. 

To help work pay, the Government is therefore jacking up the minimum wage by a full 9.8pc from April next year.

This article was originally published by a www.telegraph.co.uk . Read the Original article here. .