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date: 2 September 2009

embargo: 00.01 hrs Thursday 3 September 2009

Jobseeker's Allowance is just ten per cent of average earnings

People on average salaries receive just a tenth of their earnings if they lose their job and claim Jobseeker's Allowance (JSA), a new TUC study reveals today (Thursday).

A TUC analysis of average earnings, unemployment benefit (UB) and JSA rates since 1970 (the first year that average weekly earnings data is available for men and women) has found that the value of out-of-work benefits compared to earnings has declined steadily and is lower now than in previous recessions.

During the 1980s recession, unemployment benefit rates were around 17 per cent of average earnings. The rate fell to around 14 per cent of earnings in the early 90s recession and in 2008 JSA reached a record low of 10 per cent of average earnings.

Currently £64.30 a week, the UK has one of the lowest out-of-work benefit rates compared to wages in the developed world, according to OECD figures.

The TUC has used the new analysis to renew its call for an increase in JSA to at least £75 a week, to provide more of a cushion for the newly unemployed and stimulate the economy as unemployed people are highly likely to spend their benefits immediately.

TUC General Secretary Brendan Barber said: 'Losing your job is always a massive blow. But successive governments have failed to increase unemployment benefits in line with earnings. The result is that people losing their jobs today face a bigger loss in their income than in previous recessions.

'Of course the real challenge is to get people back into work again and the Government is doing much, both through stimulating the economy and through initiatives like the Future Jobs Fund.

'But many people are going to spend a long time on benefits, and £64.30 a week is not enough to get through the week. Increasing JSA by as little as £10 a week would make a real difference to millions of families.

'The view that we need low benefits to encourage people into work makes no sense in a recession. The vast majority of the unemployed are desperate for jobs, and need no encouragement.'

NOTES TO EDITORS:

- * The weekly average earnings figures for 2009 are not yet available. JSA went up to £64.30 a week on 6 April 2009.

- The weekly out-of-work benefit rates are for June of the corresponding year.

- The weekly average earnings figures are mean gross weekly earnings for full time men and women.

- Unemployment benefit levels since 1968 can be found on the Institute for Fiscal Studies' fiscal facts page at http://www.ifs.org.uk/fiscalFacts/taxTables

- The weekly average earnings figures are taken from the ONS time data series Average Gross Weekly Earnings 1938-2009. The figures from 1970 to 1997 are from the New Earnings Survey and the figures from 1997 onwards are from the Annual Survey of Hours and Earnings.

- International comparisons of out of work benefit levels are taken from the OECD tax benefit calculator, accessed at www.oecd.org.

- Congress 2009 will be held at the BT Convention Centre, Liverpool from Monday 14 September to Thursday 17 September. All applications for media passes must be received no later than noon Monday 7 September. Any applications received after this date will be processed in Liverpool and subject to a £50 administration fee. The form for media credentials, plus information on how to book wireless internet access and a phone line at the BT Convention Centre can be accessed at www.tuc.org.uk/mediacredentials

Contacts:

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Elly Brenchley T: 020 7467 1337 M: 07900 910624 E: ebrenchley@tuc.org.uk

Press release (800 words) issued 3 Sep 2009