Unemployment higher than government suggests

Think-tank concerned by increased numbers of individuals considered ‘unemployable’

 

Questions are being raised over the governmentÂ’s unemployment statistics after a study released by economic policy institute AE found many more Danes were on cash welfare than the numbers suggest.

The labour-oriented AE stated in a press release that 124,000 Danes are receiving cash welfare benefits, though only 33,000 of them count as being unemployed by the Employment Ministry.

The remaining 90,000 individuals are not counted in unemployment statistics as they are considered unemployable.

“Unemployment is actually a far greater problem than it appears in the statistics,” AE managing director Lars Andersen told Politiken newspaper. “We have to take it seriously.”

Cash welfare recipients are divided into three groups by job centres, with individuals in Group 1 considered ready to work.

Those in Groups 2 and 3 are not considered ready to enter the workforce and are not entered into official unemployment statistics.

What the official unemployment statistics hide, according to Andersen, is that these groups are growing.

And while these groups are typically comprised of individuals suffering from alcoholism and/or drug addiction, more and more young people are falling into these categories.

“Now it’s more likely that people who have dropped out of school or young people who never got into the workforce are being considered unprepared for the workplace,” Andersen said. “It’s not that likely that we’ve gained that many more addicts.”

Some 90,000 individuals received cash welfare benefits in September 2011, up 22,000 from 2008.

In the same period, the proportion of recipients under the age of 30 rose from seven percent to 36 percent.

Between 2004 and 2008, some 30,000 cash welfare recipients found jobs. According to AE, the new numbers show that those gains have been all but wiped out.

“We are close to losing all the progress we made in the good years getting cash welfare recipients into work,” Andersen said. “The hidden unemployment numbers show that something needs to be done about creating growth and jobs so we don’t lose an entire generation.”

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