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.