Thursday, Jun 10, 2010
500,000 jobs to go by 2012
BBC: UK cuts 'to push unemployment close to 3m'
Chief economic adviser John Philpott said he had now revised up his forecast, saying unemployment would climb to 2.95m in the second half of 2012, and remain close to that level until 2015.
About 500,000 public sector jobs would go in that period, Mr Philpott predicted.
Unemployment is currently 2.51m, according to the latest official figures.
Posted by rumble @ 01:05 AM (1928 views) Add Comment
12 Comments
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1. quiet guy said...
Speculating about the likely political implications of 3m+ unemployed reminds me of one of Walayat's essays:
Gordon Brown Mission Accomplished, Labour General Election Plan a Magnificent Success
High unemployment levels might be the elusive tipping point for HPC but will put the government under pressure to manipulate the economy. Labour would say that the unemployment is a consequence of withdrawing stimulus and the nasty HPC is all the ConLib's fault; that should play well with some voters.
2. hpwatcher said...
will put the government under pressure to manipulate the economy
The economy is very heavily manipulated, but the key issue is the cost. There will be a time, when the cost cannot possibly be met.
3. growler said...
The author of the report - Chartered Institute of Personnel and Development - might of course see rising unemployment (and lack of recruiting) as influencing their business model.
The view of Fillmypot is more focus on "tax" less on reduce widely agreed overspending.
At the risk of talkin about labels, im no through and through Tory, but we clearly have people in jobs that aren't really jobs.
Labour would indeed say that withdrawing stimulus costs jobs. They do have a long history of overmanning whilst running state industries to draw from. Plus of course the ultimate irony of withrdrawing support from Rover in the hour of need. Those sums would almost negligible today. Well done Labour - if the name was not such a paradox it would be funny.
4. Simon said...
@1 quiet guy
I wonder how much the uncosted spending commitments they rammed through in the last 12 months will contrilbute to the jobless total .
@3 growler
The public sector headcount has been expanded by a million jobs in the last 13 years . That is an awful lot of people to find proper work for . I bet half of those fall into the category of "jobs that aren't really jobs" or could be removed without a noticable impact on services .
A lot of those people are immigrant labour as well as anyone who has been in a hospital knows .
What a lot of personal tragedy because Labour decided to create jobs in the public sector rather than stimulate the private .
Terms and conditions have to be revised down to save as many public sector jobs as possible and allocate as much money as possible to the private sector .
5. matt_the_hat said...
500000 public sectors jobs to go will anyone notice the difference
6. flashman said...
As growler has spotted, the CIPDs board of directors is stuffed full of recruitment company owners and civil servants. They are a lobbying group and their purpose is to pressure the government into preserving as much employment as possible. They also have a stated purpose of lobbying for higher real wages, which is a bit outdated in today’s environment
Actually this 500,000 number is the least scary of the CIPDs forecasts. They are basing this on a 60:40 split between public spending cuts and tax hikes. Their most touted forecast is for a public sector job reduction of 750,000. This 750,000 number is based on their prediction of an 80:20 ratio. They base this ratio on Canada's fabled deficit reduction ratio from the 90s
Non-lobbying group forecasts predict far less public sector layoffs. These non-lobbying forecasts use a slightly more sophisticated ratio calculation. The CIPD do not bother including wage freezes or reductions in their ratios, which is somewhat disingenuous. Obviously there will be wage freezes and reductions, which will keep some people employed at a reduced cost while they gradually bleed off into the public sector, over the course of the next five years. Philpott has been openly citicised for stubbornly refusing to incorporate reductions in hours worked and wages into his calculations, despite private sector employment remaining resilient by using this exact same tactic.
The non-lobbying consensus is for a ratio of about 30:70 (the larger number represents deficit savings generated by tax hikes plus public sector wage freezes/reductions). Public sector job losses (according to these more credible forecasts) will therefore be nearer 150,000 than 500,000.
It is also important to note that the CIPD forecast for 500,000 job losses in the public sector is stretched over 5 years.
7. mark said...
i would get rid of the car tax dept and add the tax to petrol tax much fairer system, the more you use the more it costs.
8. andrew said...
The Labour media spin machine is still spinning, the word cuts never gets questioned.
The services that are being cut are being paid for with borrowed money, even if they were needed, why should those services be made available before the money is in place ?
Isn't this just basic financial common sense ?
What is going to happen when the demographics shift and there really are more old people to support, and less people in employment as a ratio, where will that leave us.
As a final point, why don't the same "caring" people screaming about cuts, lobby the government to help those who genuinely need help i.e. pensioners, some of whom may be on £450 a month and are still required to pay council tax ?
9. mark wadsworth said...
Flash, didn't you do some cunning regression between unemployment and house prices, showing an 18 month time lag? Wasn't there a tipping point at about 2.75 million unemployed?
10. quiet guy said...
@Mark Wadsworth
Flashman posted:
http://www.housepricecrash.co.uk/newsblog/2009/07/blog-average-house-prices-will-fall-to-24572.php
Followed by comments, a fornight later to:
http://www.housepricecrash.co.uk/newsblog/2009/08/blog-more-trouble-for-house-prices-24813.php
11. dbc reed said...
@simon
Where is the evidence that Labour created public sector jobs instead of stimulating the private sector as you assert? Interest rates at 0.5%; re-capitalising the private sector banks with public money as in QE? There must be plenty of mortgage holders whose repayments must have decreased by hundreds of pounds a month.Why is n't the private sector profiting from their greater disposable income? Also contracts with public sector organisations keep a lot of firms going.The time for a private sector revival was a year ago,(the orthodox conditions were then in place) but the private sector failed .
12. Skeptical First Time Buyer said...
@11
0.5% interest rates, QE and a timescale of a year, what are you talking about. Growth of new sectors takes time. We have decline in private sector because our labour costs are too high compared with the competition. Also the real tax we pay is way too high (including neo-fuedalist bank taxes), it's a wonder we are not contracting faster. Interest rate reductions just serve to prop up the neo-fuedalist banking system. It's better that people default, and house prices crash. We start again under levels of real taxation that allow enterprise. Instead of giving everything to a few rich individuals who have been rigging the system for years, and that have bled us to near collapse.