A nation of unemployed workers and inept politicians

Posted on: 12 October 2011 by Alexander Hay

As unemployment nears the dreaded 1-in-10 mark, older workers and women lose their jobs, youth unemployment creeps ever closer to 25% and the economy remains in doldrums, what does the government do? Wage war on cybergrot of course!

The jobs market, yesterdayEconomics, while often a complex discipline, can sometimes be expressed in very simple terms. For example, the less people have paid full time work, the less times they will be able to go into shops and buy the consumer goods which prop up the economy.

A simple equation, you might think, meaning that the more people you keep in gainful employment, the more their local retailers, businesses and so on will be able to stay afloat, keeping the government a-flush with tax receipts.

Sadly, such simplicity eludes the government which has, through overly harsh 'austerity measures' let this happen:

The number of Britons without work increased by 114,000 between June and August, the Office for National Statistics said. The unemployment rate has reached 8.1pc, 0.1pc more than analysts had been expecting and the highest total since 1994.

The grim figures reveal the number of people claiming Jobseeker's Allowance in September increased for the seventh month in a row, by 17,500, to reach 1.6m, the highest total since the start of 2010...

Now, governments can't control everything, but when their policies make things worse, it's worth considering whether they are fit to govern, especially when they make wilfully foolish or harmful decisions:

...Cuts in the public sector are likely to have driven the fall in employment - however, changes to employment rules governing older workers could be responsible for the record reduction of 74,000 in the number of over-65s in employment.

From October, it became unlawful to retire anyone on the grounds of age, with many employers rushing to retire those aged 65 or over during the summer months before the new rules took effect...

While ideologues wax lyrical on shrinking the state, there is no answer as to what is to be done with ex-public sector workers, any more than there was any real debate about what to do with redundant miners or factory workers.

In any case, that is a great deal of human capital being squandered needlessly, and, given that public sector workers often sustain their local economies (working in effect for the biggest employer in some areas), that means even more harm is done to areas already battered by recession.

Likewise with the badly thought out approach to repealing the current retirement age, which was meant to keep people in work longer, but has in practice meant many more older workers are being laid off sooner. It takes a perverse kind of genius to pull off something as counter-intuitive, though stupidity can often be an easy short-cut.

Nor will this necessarily help the government in its attempt to win over women voters, as many of those voters will now be out of jobs:

...Women have also been badly hit by the financial crisis, with public sector austerity cuts falling disproportionately on women who make up the majority of the workforce. The figures show a 5.4pc increase in the number of women unemployed in the year to August, compared to 4.1pc for men...

Naturally, it's not looking good for their children and grandchildren either, with youth unemployment now standing at 21.3%. That's even more human capital going up in smoke. Or as Tanya de Grunwald, an expert on stating the obvious said:

"...The longer they are unemployed, the harder it is to explain that gap on their CV, if they do get an interview," she said. "Today's youth unemployment figures confirm what many young people already know - that something has gone very wrong for their generation..."

And as any businessman who actually makes or does things will tell you, in order to make money, you've got to invest. In this case, the government needs to invest in people. Instead, it's reducing the investment (and indeed the job opportunities) of people throughout the country. Just how are we meant to get out of this recession?

Fortunately, the government has its priorities straight. It's going to circumscribe online pornography instead.

[SOURCE: The Telegraph]

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Alexander Hay

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