As the cost of living crisis bites for many across the UK, new figures show four in five households in Gateshead have at least one working-age adult in employment.
Last year saw the first national rise in the number of working-age households without an employed adult since 2010, before rising food and energy prices led to soaring inflation this year.
The Institute for Public Policy Research said the rise in workless households is "seriously concerning", especially during the rising cost of living.
Office for National Statistics figures show 59,539 Gateshead households containing one or more occupants aged between 16 and 64 had at least one person in employment in 2021.
It meant 81.3% of households were classed as either working – where all working-age adults are in employment – or mixed, with at least one working and one workless adult – down from 83.8% the year before.
Across the UK, the number of workless households rose for the first time since 2010 last year from 13.7% to 14.1%.
In Gateshead, just 13,687 households (18.7%) had no working-age occupants in employment last year.
Rachel Statham, associate director for work and welfare state at the IPPR, said: "It’s seriously concerning to see a rise in workless households as our cost-of-living crisis deepens this winter, and it’s clear that urgent action is needed to keep people in the workforce as living costs soar."
Ms Statham also highlighted the high rate of sickness and ill health as a reason for the uptick in worklessness.
Across the UK, 34% of workless households said they did not work because of sickness or disability.
This was the most common reason given in every region across the country – in the North East, it was 35%.
A further 15% said it was because they had retired early, while 12% were out of work due to being unemployed.
"We need to see urgent action from our new Government to drive down waiting lists, improve access to employability services for people struggling with health problems, and strengthen social security for those who are unable to work due to ill health or disability, or this trend will result in significant social and economic costs over the long term," Ms Statham added.
The Department for Work and Pensions said it has supported 1.3 million people with disabilities into work in the last five years.
"All disabled people deserve the same opportunities to start, stay and succeed in the workplace as everyone else," a spokesperson added.