Wednesday 15 August 2012

Unemployment Falls : A Brief Respite Before The Storm?

Work and Pensions minister Ian Duncan Smith could be heard crowing on Radio 5 Live this lunchtime about the fall in the unemployment figures for the fifth consecutive quarter.

Boasting about the drop of 46,000 from the unemployment figures from April to June to 2.56 million on the dole, IDS said ”These are positive and encouraging figures demonstrating the strength of our private sector – notwithstanding the difficult economic times it is still creating jobs, the vast majority of which are full time. Unemployment is falling and the claimant count is down.”

But the minister’s optimism is neither shared by the Bank of England nor leading economists.

A spokesperson for the Bank of England described the contradiction of an economy which has rising employment whilst output is falling  as a “genuine economic puzzle”.

ING economist James Knightly added : “None of this is consistent with data showing the UK has contracted for three consecutive quarters and is growing at the same rates as Spain and Italy – where unemployment is moving sharply higher. Moreover, UK employment is up 656,000 since the beginning of 2010 and is up 407,000 since last summer, when the UK apparently went into recession again.”

Howard Archer, chief economist at IHS Global Insight, said: “The labour market continues to defy gravity and is performing remarkably well given the extended weakness of the economy.

“It is very hard to reconcile employment growth of 201,000 in the three months to June, with GDP contraction of 0.7% quarter on quarter in the second quarter, especially as this was a third successive quarter of decline.

“The implication is that either the economy is doing appreciably better than the national accounts data show, the labour market is doing significantly worse than the hard data show, or productivity has genuinely weakened sharply. The jury is currently very much out as to what the actual answer is but it could very well be a combination of all three.”

IDS’s positive outlook masks a number of significant problems that persist and likely to worsen for those that at the bottom of the pile struggling to make ends meet.

One is the kind of jobs that are available.

Many commentators have attributed the unemployment decrease to the masses of temporary workers taken on during the Olympics.

The figures seem to bear this analysis out.

With a headline fall of 46,000, the number of people out of work fell by 42,000 in London. Benefit claimants across the UK dropped by 5,900 last month, half of these were in London.

More than 200,000 jobs were created in the UK in the last quarter, again nearly half of them , 99,000 were to be found in London.

Even if the number of temporary jobs were not be to be scaled down for the forthcoming Paralympics, the fact that the economic boost promised by Culture Secretary Jeremy Hunt did not materialise, makes it incredibly unlikely that the private sector will be in a position to offer all of those Olympic workers jobs, let alone replace 700,000 lost jobs as also promised by the Government.

Part-time working has leapt to record levels, there are now more than 8 million people working part-time, at least 1.4 million (another record) of which are struggling find full-time work.

There was an increase in those employed on “zero hours” contracts.

For those left on the dole, the future is certainly not as bright as Tory ministers would have us believe.

Youth unemployment rose to 1.5 million, and Unison General Secretary Dave Prentis warned:

“Students waiting for A-level results this week face a bleak jobs future. They are set to join the dole queues in high numbers as the hike in tuition fees has priced many thousands of young people out of their dream of going to university or into further education.”

One in four on the dole have now been out of work for at least a year, a rise of 10%. Worse still, it is the long-term unemployed that are the target for Employment Minister Chris Grayling’s plans to force them into workfare schemes that will not only give them no wages, but will also fail to increase their chances of getting a job.

Two recent articles have exposed the way that the ConDem Government’s pursuit of austerity policies and the high level of unemployment that comes with those policies have destroyed people’s lives.

In the first, the Health Service Journal reported on the research carried out at Durham University that found that a greater risk of premature death was more prevalent in areas with the highest levels of long-term unemployment.

Yesterday the Guardian revealed that suicide rates in the UK were falling for 20 years until 2007-8 when the number of people taking their own lives rose by 8% in men and 9% in women.

The paper published in the British Medical Journal backed up the experience of Claire Wyllie, the head of policy and research for the Samaritans who said:

“This research gives us credible evidence that the suicide rate in England is linked to the current recession. We’ve seen calls to the helpline from people worried about financial difficulties double since the onset of the economic crisis. In 2008, one in 10 calls to the helpline were about financial issues, now that’s one in five.

“There is evidence that government investment in welfare and active labour market policies can mitigate the increase in suicide during recession.”

That David Cameron, IDS and Grayling are accelerating down a road in entirely the opposite direction means that activists and trade unionists need to fight tooth and nail  for every single job and fight against every scheme designed to damage real jobs and drive down incomes.

Ensuring that we all mobilise more than a million protesters marching in the capital on the TUC demonstration on October 20th is becoming increasingly more crucial.





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