Regional Unemployment in UK

Readers Question: Why are there large differences in the unemployment rate across different regions of the UK?

In the 1980s regional differences in unemployment were greater. To some extent regional differences in unemployment have narrowed in recent years. However, differences still exist. Some reasons include:

  1. Decline of Industry. Some areas relied on certain industries to provide a large % of jobs. If these industries close down then areas suffer from a high rate of unemployment. A good example, was when coal mines closed down in certain areas. It led to high unemployment in certain areas such as South Yorkshire and South Wales.
  2. Negative Multiplier Effect.  Depressed areas often struggle to attract investment. e.g. if an industry closes down then related to businesses suffer e.g. cafes, pubs which used to service the old industries.
  3. Labour Immobility. One question is if unemployment in one part of the country is high, why don’t people move to areas where there are jobs? One issue is the difficulty of moving. For example it is:
  • Difficult to gain housing in areas such as London (especially difficult if you have to sell and buy a house)
  • Difficult with children in school, wives in part time work e.t.c
  • Emotionally difficult to leave friends e.t.c.

4. Lack of skills / qualifications. Some inner city areas may have low numbers of qualified people who therefore struggle to gain employment.

5. Higher unemployment amongst ethnic minorities. Sometimes unemployment rates are higher in certain boroughs or areas of cities. These areas may have a high ratio of first or second generation immigrants. They may be more likely to be unemployed because of poor skills / language barriers/ discrimination e.t.c