Some thing strange is happening with the statistics relating
to the economy and employment.
There is no disagreement that, at best, the economy is
flat-lining. There is no growth and little prospect of growth given the
coalition government’s economic policies. Some suggest that we have a
triple-dip recession. That view is reinforced by the UK’s loss of its AAA
credit rating this week.
Traditionally, such economic performance is reflected in
increasing unemployment. However, over the last few months, there has been a
fall in the headline rate of unemployment. Obviously that is welcome, but a
combination of economic recession and falling unemployment is one that is
mystifying all the experts. It’s counter-intuitive. So, we need to look behind
the headlines to try to understand what is happening.
First, it is now clearer than ever that British workers are
paying the price to get a job or keep a job. People have now taken an average
£1,200 pay cut since the election because jobs are so hard to come by. Today we
see there are more than five people chasing every vacancy.
Of course, pay and income cuts – particularly amongst those
on low and medium incomes, who tend to spend nearly all their income – actually
contribute to a lack of economic activity. The least wealthy areas are the
hardest hit by this.
Secondly, youth unemployment has risen yet again. It is
expected to burst back through the million mark this month. Most worrying,
long-term youth unemployment has risen by 79% in the last year.
Thirdly, the number of women out of work has gone up again,
after a fall in the last period.
Fourthly, long-term unemployment is still far too high. It
is long-term unemployment – especially amongst young people – that should most
concern us. Have we forgotten the disastrous social and economic impact that
this had on local communities after Margaret Thatcher’s pursuit of similar
economic policies?
What Britain now needs from next month’s Budget is an
industrial strength back to work programme to match the crisis we face. We need
a Compulsory Jobs Guarantee to get anyone out of work for more than two years
straight into a job – one that they would be required to take.
