There is a problem with all policy choices. There is an inevitable trade off, one goal has to be sacrificed in order to achieve another.
While there have been periods when that really didn't seem too bad (such as the NICE decade), now the costs are transparent. In particular the aim of long run growth and securing a sound budget position is causing a rise in unemployment and the sacrifice of short-run growth.
The recent unemployment figures show this clearly and have inevitably led to a call for a reversal of policy. In this case the costs of the policy are unevenly distributed, those who loose their jobs pay the highest price and for some, the young, there is little prospect of a job anytime soon.
The BBC covers the story and have an excellent interactive map if you follow the links at the bottom of the page!
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i think it's really embarassing, especially for a country like the UK, which is so proud of their economie, to get such a high rate of jobless people in only 3(!!) month.
ReplyDeleteThe first question everyone should ask himself is, how could it be possible, that sth like this happens so sudden?
Not looking good lads....
ReplyDeleteThe rise in unemployment is mainly a result of the public sector cuts as a result of the government's austerity measures. The expectation the government has is that the private sector would fill the void and begin to employ more people to make up for it. This is however not as simple as the government hopes as we have seen today the announcement of 3000 jobs cut in the public sector by BAE Systems. It seems that the idea of the private sector employing more as a result of the public sector employing less has backfired in parts and that the private sector is now beginning to employ fewer people.
ReplyDeleteThe news is not great for the economy with growth slowing to 0.2% for those few months. Some leading economists have also apparently started saying the the UK, USA and Eurozone are all back into recession.
The article also mentions that the rate of wage increase is lower than inflation levels which means that incomes are still being squeezed and people will have less money to spend.
This is all bad news for the economy and David Cameron himself said recently that Britain is 'staring down the barrel' which clearly shows the bleak outlook for the economy. Mr Cameron would like to, as he already has stated to, blame other economies around the world for our economic worries.
All in all, it doesn't look great but there is little, if anything, we can do about it.