Gerrard Shields watches with a wry smile when Liverpool stars such as Mohamed Salah and Roberto Firmino pass his home to reach the club’s Melwood training ground. A team paid more than £2m a week between them, gathering in Lamborghini and Bentley sports cars, is an irony not lost on the unemployed 55-year-old.

“These players are on millions, coming and going in their flash cars. I’m on £158 a fortnight,” he says, wearing a bright-red cycling jacket and black tracksuit bottoms at a jobs club run by his housing association up the road in West Derby. He pedalled to this CV training session, on a bike with a “Stop universal credit” sticker slapped to the frame.

“Tebbit would have loved this,” he says, pointing at the bike propped up beside him. But then again, he adds, Thatcher’s on-yer-bike employment secretary of the 1980s never had to get by on as little as he did on the Tory benefits scheme.

“I’m a living example of austerity,” says Shields, who has been unemployed for more than 10 years and is a universal credit claimant. “It’s all right for Boris Johnson and his likes; they live in a totally different world to people on housing estates. They just do not understand what it’s like and they never will.”

Official employment figures suggest people like Gerrard are in the minority. On the campaign trail, Johnson has repeatedly hammered home a key government statistic: unemployment has fallen to the lowest levels since the mid 1970s, at 3.8% or about 1.3 million people. More people are in work than ever before.

But a new study suggests otherwise. The Organisation for Economic Co-operation and Development and the Centre for Cities thinktank believes three million people are missing from the official jobless figures, implying the scale of unemployment issues in Britain is far larger than the official figures show. The UK’s unemployment rate, the report claims, should be 13.2% or about 4.3 million people. It also suggested that austerity has bit-by-bit damaged people’s chances of finding work.

The Institute for Fiscal Studies, the tax and spending thinktank, said this week the number of people on universal credit will almost triple in the next five years, with a significant risk families will be left without support. Labour says it would scrap universal credit. A spokesperson for the Department for Work and Pensions said more than 600 jobcentres have helped people to find work and that universal credit was supporting claimants.

Liverpool had the highest rate of hidden unemployment in the OECD/Centre for Cities study; with almost 20% of working-age adults out of work compared to an official rate in the city of 5.8%. The study used the central council authorities of Liverpool and Knowsley to define the city, excluding districts such as Sefton and Wirral.

Steve Rotheram, the directly elected mayor of the Liverpool city region, saida decade of cuts from Westminster had made it harder to help the unemployed.

Sitting in his top floor office overlooking the Albert Dock on the banks of the Mersey – regenerated from the murk of Liverpool’s 1980s nadir – he said the combined authority runs a scheme called Households into Work that offered greater support to the jobless than the Tory approach.

“Benefit sanctions and universal credit are not working and pushing people into poverty. We believe if you try to treat people as human beings first then you get better reactions than if you sanction someone,” he said.

Facebook Twitter Pinterest Emma Gibbons, 27, from Anfield. Photograph: Joel Goodman/The Guardian

Emma Gibbons, 27, from Anfield, is among those helped. Her local jobcentre was as good as out of bounds, for fear of bumping into her abusive ex-boyfriend who, until recently, manipulated her by keeping back the insulin she needs to manage type 1 diabetes.

“I don’t want to go anywhere near it. They don’t know whether they’re giving him appointments at the same time,” she said, explaining that her confidence was low, with only £171 a fortnight for her and for her four-year-old daughter.

Households into Work, which is also delivered by the city council, has paid for training courses, exams and gym clothes to help her find work, and her search is progressing. “In the jobcentre they pure intimidate you. You go into these and they’re dead nice, they’ve been everything.”

Heather Shaw, her dedicated support worker, said: “The jobcentre has had cuts to funding. How can they deal with 30 clients in one day and expect to do a good job? All across the UK – but certainly in Liverpool – there are families with incredibly complex and troubled lives who can’t access the mainstream. It isn’t working for them.”

At the Anglican cathedral high on a sandstone ridge overlooking the Mersey – the larger of the city’s two cathedrals standing at opposite ends of Hope Street – Paul O’Brien, the director of Micah Liverpool, a food bank and job support charity, tells a similar story.

“The advice the jobcentre gives is for the single white male between 25-35 because that’s their average person. That means the benefit system doesn’t suit everybody, which means people don’t fit into it, and that’s why its easier for a lone parent to stay on a benefit or someone with a health condition to go on to the sick. Or for somebody who can pick up shifts for his uncle’s firm on the side.”

Condemned to the brink of managed decline under Thatcher, Liverpool struggled as its industrial hinterland shrank and trade flows ebbed out of the Mersey. The population halved in a handful of decades and unemployment peaked at 20% as the Toxteth riots raged.

Over the years the city has made steady strides back to strength, though many credit Liverpool’s year as European Capital of Culture in 2008 for sparking a regeneration revival; promoting its rich history as the home of the Beatles, two top-flight football teams, scores of museums and the Three Graces at the Unesco world heritage waterfront.

But culture hasn’t always been entirely kind. Yosser Hughes in the TV drama Boys from the Blackstuff, the stereotypical workless scouser pleading “‘gizza job” is still present in the collective national consciousness.

Liverpool clearly is not the place it was a decade ago, never mind three decades ago. “It’s a completely different place,” says Steve Rotheram, adding that Liverpool is much the same as any other big post-industrial city these days. “We’re much more resilient – hopefully we’ll be able to withstand some of the aftershocks of Brexit now than we would have done three or four decades ago.”

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Billions of pounds were spent building the Liverpool One shopping district in the centre of the city for the 2008 capital of culture year. The collapse of Carillion might have led the cranes to fall idle at the site of the city’s new hospital, but over the road is a hive of activity to build the new northern base of the Royal College of Physicians.

A little beyond the city centre, the feeling is the gleaming new towers form more of a copse than a forest of redevelopment. Despite progress, support is still required for the hidden unemployed, made harder by cuts from central government funding.

As a tenant of the Riverside housing association cycling in from the outskirts of the city to find work, Gerrard says: “There must be some more help for the working class but all they’ve done is bring in shiny buildings that look nice.”

“I do not want to be on the dole,” he says. “It’s not healthy, both physically and mentally.”