This is good news for the economy because more people in work implies higher Real GDP and so an improvement in the standard of living. The Government will be pleased because tax revenues should rise leading to a smaller deficit.
The question of why employment is so high in a recession is one we must visit again. It is almost certainly due in part to a demographic anomaly. The size of the workforce must have risen. Fewer people leaving the workforce (for example not retiring at the previous normal age) and more people gaining jobs would explain this. While a substantial number of people remain unemployed there are more jobs.In other periods unemployment would have fallen substantially already.
There are particular concerns. The young are finding it increasingly difficult to get work and the difference between geographical areas is also widening. Scotland saw a rise in unemployment as did Northern Ireland. Cambridge has the lowest jobless rate overall in the country. Horsham has 1.6% unemployment, Birmingham Ladywood 12.2%. These are big differences showing the costs of unemployment are not evenly distributed.
Good news has to be welcomed. It will help boost confidence in both households and firms, but we really have to start asking about how youth and long term unemployment will be solved over the next few years.
But does it just go to show that people are taking part-time work and even pay cuts to hang to their jobs and long-term unemployment is still going up. Surely, the Government should be giving people more incentives for people to get back into work and also looking at ways to boost employment in the private sector, such as lower taxes which will also help kickstart the economy too.
ReplyDeleteAt the moment the Government spend a great deal on helping. The Work Programme has helped 693,000 people already and they spend up to £14,000 on one individual to help them get back to work.
ReplyDeleteOf course about 60% of the jobs created since the election are self-employed or part-time. The rise in self-employed was seen in the period 1981 to 1985 as well. Part-time work can be seen as 'second best' in some cases, but possibly better than no work at all?