Why It Matters Economic Activity
Summary
We have assessed residents of your neighbourhood, and whether or not they work, and on what basis.
Definition
We have recorded the number of people within your postcode and how many are economically active or inactive. If they are economically active, we capture how many are unemployed or employed, and if they are employed how many are self-employed versus employees, and if so, do they work full or part-time.
We capture how many of your neighbours are economically active but unemployed, and of those residents what age group do they fall into, and how many if any have never worked. If a person is economically inactive we capture how many are: students, sick (long term) or disabled, long term unemployed, looking after home or family, retired, self employed or retired.
The number of individuals who fall into such categories are presented as a percentage (%) of the total population of the postcode.
Interpretation
| Dataset | Explanation |
|---|---|
| Walulel Percentage (%) of economically active residents | This tells you the percentage of all the people in your neighbourhood that could participate in the labour force comprising of all people between the ages of 16 and 74 who are currently working, looking for work or studying full time. |
| Walulel Percentage (%) of economically inactive residents | This tells you the percentage of all the people in your neighbourhood that could participate in the labour force comprising of all people between the ages of 16 and 74 who are NOT currently working, not looking for work, and/or neither are they studying full time. |
Economically Active
| Dataset | Explanation |
|---|---|
| Walulel Percentage (%) of full-time employees | This tells you the percentage of all the people in your neighbourhood that participate in the labour force as (self identified) full time employees. |
| Walulel Percentage (%) of part time employees | This tells you the percentage of all the people in your neighbourhood that participate in the labour force as (self identified) part time employees. |
| Walulel Percentage (%) of residents in employment | This tells you the percentage of all the people in your neighbourhood that participate in the labour force by undertaking paid work, training/employment programmes or work without pay in a market-oriented family establishment. |
| Walulel Percentage (%) of self-employed residents | This tells you the percentage of all the people in your neighbourhood that participate in the labour force as people who work on their own account, irrespective of whether they have employees or not, and who regard themselves as self employed. |
Economically Inactive
| Dataset | Explanation |
|---|---|
| Walulel Percentage (%) of sick (long term) or disabled residents | This tells you the percentage of all the people in your neighbourhood that do not participate in the labour force because they suffer from a long-term sickness or disability. |
| Walulel Percentage (%) of residents looking after home or family | This tells you the percentage of all the people in your neighbourhood who do not participate in the labour force because they are occupied with the full-time care of a family or home. |
| Walulel Percentage (%) of retired residents | This tells you the percentage of all the people in your neighbourhood do not participate in the labour force because they either self-identify as retired, or are of the minimum National Insurance pension age and are economically inactive. |
| Walulel Percentage (%) of long-term unemployed residents | This tells you the percentage of all the people in your neighbourhood who do not participate in the labour force because they are out of work and have been actively seeking employment for at least a year. |
| Walulel Percentage (%) of residents economically inactive for other reasons | This tells you the percentage of all the people in your neighbourhood who are not sick/disabled/unemployed/homemaking and do not participate in the labour force by choice or circumstance. |
Economically Inactive-In Education/Training
| Dataset | Explanation |
|---|---|
| Walulel Percentage (%) of Students including full time students | This tells you the percentage of all the people in your neighbourhood that could be economically active but are registered at a higher education provider, on a course that leads to the award of a qualification. |
Unemployed
| Dataset | Explanation |
|---|---|
| Walulel Percentage (%) of unemployed aged 16 to 24 | This tells you the percentage of all the people in your neighbourhood that are potential junior members of the labour force (i.e. not in an economically inactive category above) however they are not in education, employment or training. |
| Walulel Percentage (%) of unemployed aged between 50 and 74 | This tells you the percentage of all the people in your neighbourhood that are potential senior members of the labour force (i.e. not in an economically inactive category above) however they are not in education, employment or training. |
| Walulel Percentage (%) of unemployed who never worked | This tells you the percentage of all the people in your neighbourhood that are potential members of the labour force (i.e. not in an economically inactive category above) however they have not, since the age of 16, been in education, employment or training. |
| Walulel Percentage (%) of unemployed residents | This tells you the percentage of all the people in your neighbourhood that are unemployed. |
Why the metric matters from a commercial inhabitant’s perspective
Commercial inhabitants will be at a competitive advantage if they are aware of the economic activity of their local residents. It provides a strong indication of disposable income which is of great relevance for retailers establishing themselves in the local area.
It is also of interest to developers so they know what sort of housing mix will be sought after. For example, knowledge of the number of stay at home parents would give a strong indication of whether a nursery would be a good tenant to have or not.
Why the metric matters from a residential inhabitant’s perspective
The economic activity of one’s neighbours will go a long way to dictating the feel of one’s local area. If one lives in an area where a high number of residents are economically active, and then amongst those people employment levels are very high with the majority of residents working full time, one will notice an absence of people physically present in the area during standard working hours - unless the neighbourhood in question is also an area offering the jobs they are working in such as the City of London, parts of Old Street, etc.
The goods and services on offer in the area will reflect this. For example, in an area with a high number of unemployed it will have a greater proportion of people physically present in the day, but they will have little to no disposable income so high value and quality goods and services are unlikely to be on offer as there would not be any sizeable market for them. In the latter sort of neighbourhood however, one will experience higher levels of community cohesion, because a neighbourhood where its residents are physically present more have more opportunity to interact and form ties and support networks, which has an amenity value.
Many of London’s workers live far from areas of economic activity so must commute to their jobs (Photograph: Martin Addison, Wikimedia Commons)
General Commentary
The percentage of London residents who are in work has hit record-levels latterly, with the most recent estimates showing that of those who are economically active, over 73 percent were in employment in early 2016. This is a marked recovery of six percentage points from the lows following the global financial crisis of 2008. Unemployment is also sitting at its lowest ever level for London of 6 percent. However, employment rates are lower and unemployment rate higher in London than in the UK as a whole despite these gaps narrowing in recent years.
The reasons for these differences are that London has entirely different demographics to the rest of the UK – for instance, it is more ethnically diverse and there is a much higher proportion of children and students. Other factors that may influence London’s employment rate include its share of full-time and part-time jobs and higher living costs that raise the opportunity cost of working.
There are also positives to being a young person in London reflected in the economic activity statistics of Londoners. London has a lower proportion of people who are not in employment, education or training than the England average, an explanation for which is the higher percentage of students achieving at least five A*-C grade GCSEs including English and Maths (60.9 per cent versus 53.8 per cent in 2014-15) - statistics have shown that people of this age group who do not achieve this academic benchmark are at more risk of not being in employment, education or training. Whilst the majority of older people in London aged 65 and over were economically inactive as they were retired, 17 percent of men and 8.9 per cent of women aged over 65 were still in employment in 2015. Half of these did so by choice, whilst 18.1 percent did so to pay for essential items. Moreover, older people also participate in the informal labour market by caring for adults, childcare and volunteering.
The majority of people of working age (16-64) who were economically inactive in London cited that it was by choice (74.7 percent). The most commonly cited reasons for being economically inactive were study at 31.6 percent or looking after the family or home at 30.3 percent. 43.3 percent of economically inactive persons who gave the latter reason were women, compared with only 5.6 percent of men.
The vast majority of Londoners are employees (81.4 percent in 2015), with the remainder largely self-employed (18.1 percent). Self-employment has grown twice as fast as the number of employee roles since 2004 and is one of the contributors to the general rise in employment rates for London. Those who are self-employed have continued to be most likely to be aged 25-49 years, but the number of those over 65 who are amongst this category has more than doubled since 2004. This does tie in with trends across the country as a whole, and this appears to be as a consequence of deferring or transitioning to retirement.
Of those in employment 77.8 percent worked on a full-time basis and 21.7 percent part-time. Of those in part-time work, 20.9 percent cited that this was because they could not find a full-time position, a demographic which has more than doubled since 2004. Part-time working has grown 34.2 per cent since 2004, which is far greater than the growth in full-time work. So, it appears that more Londoners in total are employed than a decade ago but not on the basis that they want to be. This leads to a greater proportion of lower paid roles and contributes to a stagnation in wages in real terms. A greater share of men was in full-time work (87.2 per cent of all male workers in 2015) than women (66.5 per cent).
This growth also reflects the rising number of Londoners working in the gig economy. Such jobs match customers with providers of services via an online platform, so that the latter are paid per task. Such flexible working has huge advantages for workers, who may otherwise find it very hard to find customers, but this work can be precarious, as they do not have the legal protections that are conferred by employee status, such as protection from the Employment Act, no sick pay and no pension contributions. A small but sharply rising number of Londoners work in this sector, and solutions must be considered to ensure that governments do not have to stand in for the obligations which private companies are until now keeping at bay.
Trivia
A newspaper poll of the most unusual student job was topped by a person who played the role of Mrs Hudson, the fictional landlady to the detective character Sherlock Holmes’ who had to receive visitors in character, at the museum of the same name on Baker Street and frequently explain to tourists that he was indeed a fictional character.
History
In medieval Britain, the broad system was one that recognised four classes of person from the King, to the Barons who were given high rank by the King who had land and power, to the knights who worked for the King and enjoyed some spoils of privilege and status. Beneath them was a working class, sometimes referred to as peasants who generally survived by working on the land of a Baron. Some were born into debt bondage and were effectively serfs. This had been the status quo for centuries until the Peasants’ Revolt in the fourteenth century, following which the feudal system broke down, serfs were emancipated and wages were generally paid to all workers in this country. This led to the growth of wages and the growth of a middle class, however the widescale closure of many monasteries in the 1530s increased poverty, as the church had been a large source of help to the poor. In addition, there was a significant rise in enclosure during the Tudor period, limiting the land available for people to work on. In the 1500s a system of public works was created to deal with the problem of unemployment, to be funded by a tax on income and capital and each town was required to provide work for the unemployed.
The Act for the Relief of the Poor 1601, was one of the world’s first government-sponsored welfare programs. It distinguished between those who were unable to work and those who refused employment. Under the Poor Law systems of England and Wales, Scotland and Ireland, workhouses were created where people who were unable to support themselves, could go to live and work. These were not prisons and people could come and go, but conditions were tough and as being a vagrant was still illegal, many had little choice but to admit themselves.
By the eighteenth century, a full sixty per cent of Londoners were still likely to find themselves in receipt of charity, or aid from the local parish when out of work, elderly or infirm. By 1760, approximately 2 per cent of the population of London resided in workhouses, more of which had been created by parishes of London.
Data on employment only started to be captured in the late nineteenth century and even then, it was based only on employment levels amongst trade union members so it did not capture all the employed. Extrapolations of this data therefore indicate employment levels in this period of anything from 2 to 10 percent. From the early twentieth century onward, the introduction of a compulsory national scheme of insurance against unemployment was introduced and subsequent acts meant that it covered more and more people. Excluding the war years, unemployment in the twentieth century had peaks and troughs, from the roaring 20s where it reached a low of 2.6% in June 1920, to a high of 23.4 percent in May 1921 after the Wall Street Crash. Long periods of relatively high unemployment rates were also recorded in the UK in the Depression of the early 1930s.
In 1948, National Insurance expanded to cover all male and female employees aged 15 and over. The data on the unemployed from 1948 to 1982 is referred to as the registrant count as it referred to the number of people registered at government offices as looking for work. The lowest recorded unemployment rate in this period is 1 percent in the mid 1950s when manufacturing in London was at its peak and the City was enjoying new status as the forum for international foreign exchange, the highest was in September 1982 when it reached 14 percent following government attempts to control inflation and the decline of manufacturing which led to the closure of the majority of London’s still surviving factories.
From 1982 onward the count changed from the registrant count to the “Claimant Count” because from then on it aimed to count the number of people claiming benefits principally because they were unemployed. This count is still published today alongside the headline unemployment figure based on the broader Labour Force Survey which captures those who are unemployed but not claiming benefits.