- According to the most recent figures at the time of the claim, NI’s unemployment rate was 2.6% – lower than England (5.0%), Scotland (3.9%), Wales (4.9%) and Ireland (4.7%), as well as being lower than each individual region of England.
- The Belfast/Good Friday Agreement was signed on 10 April 1998. In the quarter preceding that, NI’s unemployment rate was 8.5%, although it dipped to 7.5% in the April of the Agreement. Comparing these with the current rate of 2.6%, these represent falls of 69.4% or 65.3%.
- However, simply looking at unemployment rates will not give anyone a full picture of the relative health of Northern Ireland’s labour market when compared with elsewhere.
- The unemployment rate in NI is broadly low – but its employment rate is also low, relative to other parts of the UK and Ireland. Local economic inactivity rate is high.
During a discussion on BBC Radio Ulster show Talk Back on 21 October, UUP MLA Jon Burrows claimed:
“Sometimes we need to remember that Northern Ireland is doing well and getting better. We’ve just had 1,000 new jobs from Bank of America. We’ve got the lowest unemployment on these islands. It’s reduced by 80% since the Belfast Agreement.”
There are two aspects to this claim:
- Northern Ireland has the lowest unemployment on these islands (the UK and Ireland).
- NI’s unemployment has reduced by 80% since the Belfast/Good Friday Agreement.
Both aspects are supported by evidence.
The first is accurate whether you are comparing NI to England, Scotland, Wales and Ireland as nations, or if you break the UK down into regions.
At the time of the claim, NI’s most up-to-date unemployment rate was 2.6%, compared with 5.0% in England, 3.9% in Scotland, 4.9% in Wales and 4.7% in Ireland. The UK region with the next lowest unemployment was the South West of England (3.6%).
There is also evidence to suggest that NI’s unemployment rate has generally been lower than England, Scotland, Wales and Ireland since around 2022.
The Belfast/Good Friday Agreement was signed on 10 April 1998. In the preceding quarter (Jan-Mar 1998), NI had an unemployment rate of 8.5%, while in the month the agreement was signed this dipped to 7.5%.
Comparing these with the current unemployment rate of 2.6% we see falls of 69.4% or 65.3%, depending on which figure you use. Neither of these figures are quite as high as 80% but they are both in the same ballpark – close enough to still support the claim.
However, the rest of this article looks at the wider context for these figures, including an examination of both employment and economic inactivity, in order to create a fuller picture of the health of Northern Ireland’s labour market when compared to the rest of the UK and Ireland. The unemployment rate on its own is not enough to properly compare the situation between different areas.
For more information, read on.
- Source
FactCheckNI contacted Mr Burrows about this claim. His office responded by pointing us to two different data sources:
- Office for National Statistics (ONS) bulletin on the regional labour market as the source for NI having the lowest unemployment in the UK.
- ONS time series as a source for unemployment in NI reducing by 80% since the Belfast/Good Friday Agreement.
Before we look at any figures, let’s run through exactly what is meant by unemployment, employment and some other related terms.
- Definitions
Both the UK and Ireland use definitions matching the principles designed by the International Labour Organisation (ILO) to measure employment, unemployment and other related statistics.
In the UK, employment is measured by the Labour Force Survey. This is because the number of employed people is not the same as the number of active jobs (as people can have more than one job). Those counted as employed “consists of people aged 16 and over who did paid work (as an employee or self-employed), those who had a job that they were temporarily away from, those placed with employers on government-supported training and employment programmes, and those doing unpaid family work.”
In Ireland, the definition is more or less equivalent – however, the lower age limit used there is 15 and not 16.
In the UK, the “headline employment rate is calculated by dividing the employment level for those aged from 16 to 64 by the population for that age group.”
Once more, the definition in Ireland is equivalent, save for the fact that the lower age limit is 15 not 16. Note that this does create a potential distortion when comparing employment rates in the UK with those in Ireland, however any such distortion is liable to be very small and this fact check proceeds on the basis the equivalent statistics in the two jurisdictions are directly comparable.
What about unemployment? Unemployment is not the same thing as not being employed. In the UK, someone is unemployed when they “are without a job, have actively sought work in the last four weeks and are available to start work in the next two weeks; or are out of work, have found a job and are waiting to start it in the next two weeks.”
The UK unemployment rate is “is calculated by dividing the unemployment level for those aged 16 and over by the total number of economically active people aged 16 and over. Economically active is defined as those in employment plus those who are unemployed.”
Note that there is no upper age limit for the unemployment rate. However, by definition those who are retired (generally including pensioners) are neither in employment nor are they seeking work, so are usually excluded from these figures.
In Ireland, definitions for both unemployment and the unemployment rate are once again equivalent – although Ireland’s Central Statistics Office (CSO) again uses a lower age boundary of 15, and also notes an upper age limit for classifying someone as employed as 75-years-old. Again, this highlights a small but likely insignificant difference in the approaches between both jurisdictions.
Another relevant definition in this discussion concerns economic inactivity. In the UK, someone is considered economically inactive if they are at least 16-years-old and are without a job, have not sought work in the past four weeks and are unable to begin work in the following two weeks.
The UK’s economic inactivity rate is calculated as the total number of people aged 16-64 who are economically inactive as a percentage of the total 16-64 population. Essentially, this is the portion of the working age population that is neither employed nor unemployed. According to the ONS:
“The main economically inactive groups are students, people looking after family and home, long-term sick and disabled, temporarily sick and disabled, retired people and discouraged workers.”
In Ireland, the definition for inactivity once again works among the same parameters but is broader because it covers the age range 15-89. As definitions of inactivity include retirees, the difference in upper age bound between the two jurisdictions here has the high potential to be significant.
FactCheckNI previously examined rates of economic inactivity across these islands in an article published in May 2023.
Now to compare some data.
- Unemployment rates
***Please note that many of the statistics used in this article rely on the ONS’ Labour Force survey. Currently, ONS warn that the data quality in their survey is not as high as it could or should be and this should be borne in mind by readers. Nevertheless, this still represents the best source for these figures across the UK. ONS itself states:
“The ongoing challenges with response rates, response levels and weighting approach mean that labour market statistics based on both the Labour Force Survey (LFS) and Annual Population Survey (APS) will be considered official statistics in development until further review. Because of increased volatility of LFS and APS estimates, estimates of change should be treated with additional caution.”
As outlined above, the unemployment rate is expressed as a percentage of the labour force (i.e. those in work or seeking work) who are actively looking for work and ready to start work within two weeks.
At the time of Mr Burrows’ claim, the latest UK labour market figures published by the ONS – covering June-August this year – showed that Northern Ireland’s unemployment rate was 2.6%.
This was lower than Scotland’s rate at the time (3.9%), Wales’ rate (4.9%) and not only was it lower than the overall rate in England (5.0%), it was actually lower than all the constituent regions of England – where the lowest unemployment rate was found in the South West (3.6%) and the highest in the West Midlands (6.2%).
The most up-to-date employment figures for Ireland available at that time covered September this year, with an unemployment rate of 4.7%. This relates to a slightly different period of time than the UK figures above, but Ireland’s monthly unemployment rate has not dropped below 4.1% since October 2022 regardless.
This means Northern Ireland’s unemployment rate is 1.3 percentage points (pp) lower than the next-lowest nation (Scotland) and 1.0pp lower than the next-lowest region (South West England).
Based on all this, it is fair to say that Northern Ireland does have the lowest unemployment rate on these islands.
And not just that, it has been the lowest among the five national jurisdictions in Britain and Ireland for some time. Once again, relevant data for this comparison for the UK is provided by the ONS while equivalent data for Ireland is published by the CSO.
Figure 1 – source: ONS and CSO
In 2015 (in the relevant, snapshot quarter), Northern Ireland’s unemployment rate was 6.3%. England was 5.5%, Wales was 6.6%, Scotland was 6.3% and the Republic of Ireland was 9.9%.
In the last ten years, Northern Ireland’s unemployment rate has dropped to 2.3%. In England and Wales, it is 4.9% and 4.8% respectively. Similarly, the Republic of Ireland’s unemployment rate was last measured as 5%. Scotland is slightly lower with 3.6%.
- The Agreement and today
The second part of this claim concerns how NI’s current unemployment rate compares with the equivalent figure at the time of the Belfast/Good Friday Agreement.
The Agreement was signed on 10 April 1998. According to historic data from ONS, for the first quarter of 1998 (Jan – March), the unemployment rate of Northern Ireland was 8.5%, although this dipped to 7.5% in April that year.
From above, the most up-to-date employment figures for NI at the time the UUP MLA made his claim was 2.6%. This represents a fall of 69.4% from the figure of 8.5% for Q1 of 1998, or a fall of 65.3% compared with April that year.
Figure 2 – source: ONS
While neither of these figures is as high as 80%, as in the claim, they are both in the right ballpark and provide evidence in support of the claim.
- Wider context
It is clear that Northern Ireland’s unemployment rate has fallen by a very significant amount in the past 25 years or so, and has recently been established as the lowest unemployment rate across the UK and Ireland.
However, when it comes to the labour market that is not the whole story. Being unemployed is not the same thing as not having a job.
For instance, the local employment rate is not the highest across these islands.
Using a similar approach to that seen above in Figure 1, we can take annual quarterly snapshots to look at Northern Ireland’s employment rate since 2015 and compare that with the other four national jurisdictions throughout the UK and Ireland.
Figure 3 – source: ONS and CSO data
Using the definitions of employment rate outlined above, we can see that NI’s employment rate has generally tended to be lower than in England, Scotland, Wales and Ireland, although the rate in Wales has recently dipped below local figures.
In the most recent points in this data (which covers May to July of this year) we can see that the lowest employment rate was found in Wales (70.8%), with NI second lowest (71.8%).
There is then a slightly larger gap before getting to Scotland (74.5%), England (75.6%) and Ireland (78.5%).
What this means is that in Northern Ireland 28.2% of the working age population (those aged 16-64) were either unemployed or were economically inactive.
When you factor in NI’s relatively low unemployment rate, this must mean that a relatively large amount of people are economically inactive – and, indeed, this is the case. Using the same single-quarterly snapshots for each year from 2015, the graph below charts levels of economic inactivity across England, Scotland, Wales and NI using data from ONS (this chart does not use inactivity data from Ireland because the age range used in that jurisdiction does not allow straightforward, valid comparisons between there and the UK, as discussed in our section on definitions).
Figure 4 – source: ONS
It’s clear from this that NI’s economic inactivity rate has historically been high when compared to other parts of the UK, albeit Wales’ own inactivity rate has approached NI’s and even overtaken it on occasion.
For a comparison with inactivity in Ireland, we can look at research conducted by the Economic and Social Research Institute (ESRI) earlier this year which has made efforts to allow comparisons between the UK and Ireland. Figures in the chart below measure economic activity as a percentage of the 20-64 year old working population – i.e. not the official measure in either the UK or Ireland, but a third construction which allows comparison between the two.
Figure 5 – source: ESRI
Again, it is clear that economic inactivity in NI has broadly been higher than the rest of the UK, as well as mostly being higher than the equivalent figure in Ireland.
- What does all this mean?
Analysing labour markets is not a straightforward business. Focusing solely on the unemployment rate cannot properly describe the overall health of the labour economy in a given area.
Although the unemployment rate in NI is broadly low, its employment rate is also low, relative to other parts of the UK and Ireland, while its economic inactivity rate is high.
Research conducted by the Northern Ireland Assembly in 2024 found that the two biggest reasons for people being economically inactive were sickness and childcare costs (for a look at some of our previous work on childcare, see here, here and here).
