The strange course of unemployment continues with a rise in employment and fall in unemployment.
A rule of thumb is that there has to be around 1% growth in the economy to maintain the level of employment. This is because productivity improvements account for about 1% of growth.
The economy is not growing by anywhere near 1% and so the question has to be asked where are the jobs coming from. Sadly the data does not help us much and more work will have to be done here.
A good sign is that full-time jobs grew strongly. Sometimes the growth in jobs is part time and so the benefits are not as great as they seem. On the down side there was a rise in unemployment for the 18 to 24 year old group.
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I am sure that the government will be somewhat relieved by this latest piece of data however there is not reason to party. The claiment count did fall too but only marginally, by 20,000 from November to December. The rate that this is falling is somewhat different to the rate that unemployment itself is falling. Indeed this rate of change is much less than that of unemployment. This therefore means that the deficit will not be reducing as much as they would like. But at times like this I suppose anything would help.
ReplyDeleteAlso, the article provides data on the regional change of unemployment and there are definitely winners and loosers in that. The fall in unemployment was felt greatest in London, with the West Midlands, the South East and the East Midlands suffering with a significant rise in unemployment. Scotland did as well witness a fall in unemployment which would be in jeopardy if they decide to go for independence, but that's up to them.
Maybe we should doubt the data, it sounds potentially too good to be true and it is possible that this is actually either a lie or just inacurate. It doesn't make sense with the growth/unemployment relationship that we are meant to assume.
One reason potentially for this rise in employment is that more people are staying in jobs but experiencing almost negligable pay rises. Therefore firms are able to take on more people but at lower real incomes and therefore the figures reflect that.
More women may well also be working now as a result of changes in child benefi laws which meant that they no longer receive them and are therfore adapting in an attempt to have that overall income back again.
Zak Ajjane
It is true that economic growth can create more employment as a result of less unemployed labour. Firms would have more capital to hire high skilled labours and rise the average wage rate in order to attract marginal labour in the labour market. A rise in unemployment for the 18-24s implies that teens would prefer going out to work rather than studying in universities. There is such trend as firms would employ experienced labour as to rise productivity.
ReplyDelete(Deps Jeffrey Ho)
The economic position is good with high employment, since low unemployment is one of the key performance indicators for a government. 'Unemployment and claimant count in the UK 1992-2012' which is shown in the bbc article, showed that the unemployment rate between 2011-2012 had nearly reached the highest point in these 10 years, just about 200,000 less than the highest point in between 1992-1993. However, it is gradually going down slope after that, which means more people are employed.
ReplyDeleteThere are a number of reasons may affect the increase of youth unemployment rate. Young people may decide to spend some more years on their study or take a gap year to gain more knowledge and skills to be able to compete with other people in the society.
Privatising roads is something that causes massive uproar as, like many other private sectors (e.g. Power suppliers and train companies), tend to exploit the user. It also may pose a problem because this opens up an opportunity for more foreign companies to take larger sections of the UK economy. I feel that this is just more money to pay for citizens of the UK for essentially the same thing as road taxes and fuel tax. As with many tolls that claim to be there to pay off construction of the road or bridge it is on (Dartford Tunnel comes to mind), these tolls stay there and increase, the toll roads won’t differ and be essentially just another tax.
ReplyDeleteJoe Humphreys
Economic growth has caused more employment in the UK. This indicates that firms are in need of more workers as demand may have increased. But, a rise in unemployment for younger members of the workforce (18-24) could be seen as a negative. As firms need, in order to function, to nurture the talents of the next generation. But this can also be seen as more people of that age group going to higher education instead of going straight to work. This employment of older people could be an attempt to increase productivity and efficiency by firms. Despite all of this, overall the UK's drop in unemployment will be seen as a positive.
ReplyDeleteCould it be that over the preceding years we saw a decline in employment due to the closing of businesses whereas now new shops such as pound land seem to be filling these holes and this has lead to a rise in employment without really making an substantial difference in consumption.
ReplyDeleteCurrently the escalation in unemployment for the 18-24s emphasises the fact that teens would prefer to go to work over accumulating debt through studying at universities. Though, firms would rather employ experienced labour workers so to increase productivity-resulting in decreasing employment. However the rise in productive output through selective employment leads to growth. Therefore, as a result of less unemployed labour, economic growth can occur, in the long term potentially creating more employment.
ReplyDeleteOscar Williams