the deficit! the deficit! but what about unemployment?

Listening to the debate in the media today you would conclude that there is consensus amongst economists that the key problem of the UK economy is the deficit. And the key question is how to cut it. And the key election issue therefore should be how to cut spending. This is not the case.

Working backwards, perhaps the most ridiculous issue here is the notion that the only way of cutting the deficit is by cutting spending. Fraser Nelson of The Spectator goes so far as to say, “Cameron should ban the word ‘deficit’ and simply say ‘overspend’ instead.” It would seem that some right-wing commentators can’t add. A deficit arises when revenue is less than expenditure. An equally good way of cutting the deficit is by increasing revenue, i.e., by raising taxes. Saying the deficit is an ‘overspend’ is as idiotic as calling the deficit an ‘undertax’.

This is not to say that increased taxes would necessarily benefit UK workers. Contrary to popular belief, the UK does not have a progressive taxation system. It has a regressive taxation system. A progressive tax system is one where the people most able to pay taxes do indeed pay more. A regressive one is where either everyone pays the same or where the less well off pay more than the better off.

According to the ONS (Office of National Statistics), in the UK, the poorest 20% pay 38.7% of their income in tax, while the wealthiest 20% pay only 34.8% of their income in tax. The confusion regarding this arises because people frequently only think of taxes in terms of income tax, which is progressive, but ignore council tax and indirect taxes such as VAT. However, there is abundant evidence that increased taxes matched with increased social spending makes society more equal, i.e., it increases the wealth of the least wealthy and decreases the wealth of the wealthiest.

With that said, it is interesting to consider the current debate regarding Brown’s proposed increases in National Insurance Contributions (NIC). Brown, while he can be criticised for a lot of things, has a rather strong understanding of economics. He explained the increase in NIC on the basis that it was fairer than an increase in VAT. On this he was technically correct, although an increase in the 50% rate of income tax would be even fairer.

The confusion on the NIC proposals arise with claims from the Tories and the employers that it is a ‘tax on jobs’, a tax on employers to discourage them from employing more. It isn’t. NIC can be thought of as two taxes, one paid by the employee, the other by the employer. But, as with every tax, the issue isn’t really who it is levied on, but who actually pays it, and there is pretty strong evidence that payroll taxes that employers pay, such as the NIC, are partially paid by employers but primarily paid by workers, in the form of lower wages. The tax is not really as ‘fair’ or egalitarian as Brown suggests. It’s a tax on workers. The Tories are either being dishonest or too stupid to understand that this is not a tax on employers but rather a tax on employees. And Labour isn’t admitting what the tax really is.

The debate over NIC is interesting because it shows that the Tories are not serious about cutting the deficit. Rather they simply want to cut public spending and adamantly refuse to levy any tax on business or the wealthy. The Tory line is cut spending and pay for what’s left by taxing the least well off workers.

As mentioned above, you can cut a deficit in two ways; by cutting spending and/or increasing taxes. But neither party seems all that interested in increasing taxes and neither is even considering redressing the existing tax injustice where the poorest pay relatively more in tax. However, all this has presumed that the media consensus is correct and that the key problem of the UK economy today is the deficit. This consensus is wrong. The key problem of the UK economy today is not the deficit, it’s unemployment.

The unemployment rate is currently 7.8 per cent, 150% of what it was in January 2008. There are nearly two and a half million people actively looking for work in the UK. Despite a 0.1% decrease in unemployment in the last quarter, the number of people unemployed for more than 12 months is still increasing and is the highest it’s been since 1997. The number of economically inactive people of working age (i.e. people who are neither working nor ‘actively looking for work’) increased by 371,000 over the last year to reach 8.16 million in the three months to January 2010.

The figures are even more shocking when you look at young people, where the unemployment rate is 14.8%. The Institute for Public Policy Research estimates that 20% of young white workers are out of work, 31% of young Asian or Asian-British workers and a shocking 48% of young black workers. That means effectively one in every two young black workers in the UK cannot find work!

This is particularly disturbing given that a growing pool of research shows young people are disproportionately affected by periods of unemployment. It has been found that youth unemployment can have a permanent impact on health status, job satisfaction and wellbeing, and can lead to reduced wages not just in the short term but throughout an individual’s lifetime.

However, despite this, relatively little is being said about unemployment in the UK today. Instead, everything is about the deficit and the need to cut spending regardless of the obvious and significant negative impact that would have on unemployment. Conservative shadow Chancellor George Osborne has argued that “[t]here is no choice between going for growth today and dealing with our debts tomorrow.” As with much recent economic debate, this is idiotic. This statement is essentially that “borrowing is impossible”. Obviously borrowing is possible, Osborne could argue it’s a bad idea but to say that that choice doesn’t exist is idiotic.

Indeed, no less a bastion of socialist radicalism than the International Monetary Fund has argued in a recent study that ‘going for growth today and dealing with our debts tomorrow’ is a good idea. They argue that cutting spending too quickly could damage the economic recovery.

“Unwinding public intervention too early,” the IMF argues, “could jeopardise progress in securing a sustained economic recovery… One of the key lessons from experiences of similar crises is that a premature withdrawal of policy stimulus can be very costly, particularly if the financial system is weak. Thus, in the current context, the potential risks associated with an early withdrawal of policy stimulus seem to outweigh the risks of maintaining it for longer than possibly needed.”

So what is Osborne rambling on about? In his Mais Lecture in February, ‘A New Economic Model’, Osborne laid out his economic theory most clearly, saying that, “[p]erhaps the most significant contribution to our understanding of the origins of the crisis has been made by Professor Ken Rogoff, former Chief Economist at the IMF, and his co-author Carmen Reinhart.

“As Rogoff and Reinhart demonstrate convincingly, all financial crises ultimately have their origins in one thing – rapid and unsustainable increases in debt….. So while private sector debt was the cause of this crisis, public sector debt is likely to be the cause of the next one. As Ken Rogoff himself puts it, “there’s no question that the most significant vulnerability as we emerge from recession is the soaring government debt. It’s very likely that will trigger the next crisis as governments have been stretched so wide.” The latest research suggests that once debt reaches more than about 90% of GDP the risks of a large negative impact on long term growth become highly significant.”

This 90% figure is getting bandied about a lot and also comes from Reinhart and Rogoff’s book. However, in the book this 90% figure plays little to no role. And in a recent Financial Times article Reinhart and Rogoff warn against introducing massive cuts. They write, “[g]iven the likelihood of continued weak consumption growth in the US and Europe, rapid withdrawal of stimulus could easily tilt the economy back into recession.”

Other economists have been even more disparaging of Conservative plans for cuts and their theoretical ‘justification’ for them. Nobel Laureate and former World Bank Chief Economist Joseph Stiglitz referred to Tory plans to cut spending as “incredulous”. He likened their proposals to those of Herbert Hoover, the US President who oversaw the development of the Great Depression, by calling the Tories “Hooverites”.

Stiglitz is even harsher with the notion bandied about by the Tories that Britain is about to turn into Greece and is at risk of default. He says to Osborne, “I say you’re crazy – economically you clearly have the capacity to pay. The debt situation has been worse in other countries at other times. This is all scaremongering, perhaps linked to politics, perhaps rigged to an economic agenda, but it’s out of touch with reality.”

And indeed Stiglitz is right. But not only has the debt situation been worse in other countries, historically it’s been worse in the UK. Indeed, for the entire period of the industrial revolution the UK had public debt above the supposed threshold of 90%. UK public debt went first over 90% in 1746 and did not come down below 90% until 1863. That’s unsustainable debt being sustained for a period of 117 years!

That is not to say that this level of debt can be taken on without costs. Rather it merely shows that the notion that the UK is on the verge of disaster unless the deficit is cut and public debt is taken under control. The UK is not on the verge of disaster. But up and down the length of the country, workers are suffering from unemployment and neither the Tories, Labour nor Lib Dems seem to be all that fussed about it.

Taken from the commune

Jobless recovery fears renewed as forecast shows recruitment slow

Fresh fears of a “jobless recovery” resurfaced today as a labour market survey forecast slim recruitment intentions for the second quarter of the year.

The Manpower Employment Outlook survey, based on 2,100 employers, showed just a 1% rise in hiring confidence for the upcoming quarter, up from 0% in the first three months of 2010. The figure is calculated by subtracting the number of employers who plan to cut staff from the number who plan to take on new employees.

The small rise is in stark contrast to the more positive data recorded by Monster Employment Index, also published today, which revealed that the number of jobs advertised online rose by 12% last month compared to Janaury.

Manpower’s managing director Mark Cahill said: “The UK’s emergence from recession is certainly positive news, but there is still unprecedented confusion in the labour market, with rising levels of people claiming benefits and static unemployment levels, too.”

The utilities sector emerged as the most positive for job creation intentions, at 6%, swiftly followed by those in the finance and business services industry, at 5%.

The transport and telecommunications sector was the hardest-hit sector at -7%.

The public sector follows the national trend, reporting a 1% hiring intention.

Cahill said: “This [public] sector remains the UK’s largest employer, and therefore the importance of having the best workplace solutions is critical.

“Job cuts may be the fastest route to short-term cost-cutting but implementing innovative workforce transformations, such as those seen in the private sector, will allow for recurring savings and flexibility in the long-term.”

He called for the public sector to find new ways of working to improve effiency and deliver frontline services in a more cost-effective way.

In the first quarter of 2009, the hiring intention recorded by all industries in the Manpower survey was -5%.

Taken from Personnel Today

Future still looks grim for jobless

Official figures claiming Britain is out of its record-long recession provide “scant comfort” for the millions still unemployed, trade unions and left economists said on Tuesday.

A moderate 0.1 per cent expansion in the economy between October and December ended six straight quarters of shrinking output, according to first estimates from the Office for National Statistics (ONS).

The growth is weaker than the 0.4 per cent predicted by economists, which sparked fears that Britain is still on track for a “double-dip” recession.

Overall, the economy slumped 4.8 per cent last year – the biggest annual contraction since records began in 1949 – and it has lost 6 per cent since the recession began in 2008.

The government boasted that Tuesday’s figures were a testament that its economic measures to remedy the crisis were working.

A Treasury spokesman said that ministers would continue to “support the economy” – a policy which has seen billions of pounds of public money thrown at the banks, resulting in an estimated £178 billion national deficit.

Unemployment stands at 2.5 million and, according to the Charted Institute of Personnel Development, two-thirds of those who managed to find work after being made redundant were forced to take a 28 per cent pay cut.

Left economists have argued that investment in public services and the manufacturing industry coupled with a crackdown on wealthy tax dodgers and executive bonuses are the most sustainable ways of stabilising the economy.

Left Economics Advisory Panel chairman John McDonnell MP warned on Tuesday: “Harsh public spending cuts and job losses would risk sending the UK into a prolonged recession.”

TUC general secretary Brendan Barber said: “With the threat of a double-dip recession looming large, it would be madness to cut public spending now.

“Unemployment will increase again, with more people continuing to face long spells out of work. No sectors of the economy are fully recovered and areas such as construction are still really struggling.”

Mr Barber’s Scottish counterpart Grahame Smith expressed fears that Scotland may remain in recession for a further quarter as unemployment has soared to 200,000.

He said that the ONS figures provided “scant comfort for the millions struggling to find work. In this context, immediate and severe cuts in public spending will almost certainly plunge the economy straight back into recession.”

Taken from Morning Star

Young people stuck on the dole

Shock figures released last week showed how young people have been hit hard by the recession. Ken Olende and Viv Smith spoke to some of those who have struggled to find work

Nearly half of young black people in Britain are unemployed. This stark figure comes in a new report from the Institute for Public Policy Research (IPPR) think-tank.

Its findings undercut the government’s celebration of the first official fall in unemployment for 18 months and its belief that racism is no longer a central cause of “disadvantage”.

Two weeks ago communities minister John Denham launched a government report, Tackling Race Inequality.

It said, “Socio-economic status and poverty affect people’s chances in life regardless of race or ethnic background.”

Poverty and class do indeed affect quality of life – but race adds a very real extra burden.

The IPPR report looked at 60,000 households, including 7,200 young people aged between 16 and 24. It presents the more complex picture.

Racism

Unemployment for young white people is high, at 20 percent. For Asians the figure rises to 31 percent and for African Caribbeans it reaches a truly staggering 48 percent.

The greatest increase in youth unemployment has been among people from mixed ethnic groups.

Some 35 percent were unemployed in November last year – up from 21 percent in March 2008.

Racism is embedded in every part of society. In schools, black children are more likely to be excluded and marginalised.

Sometimes discrimination is less subtle – as a recent Department for Work and Pensions survey found.

It sent out almost identical job applications to a wide range of companies. Some had names suggesting the applicant was from an ethnic minority, rather than white British.

Those applicants who were perceived to be white received a positive response after nine applications.

Yet ethnic minority candidates had to send 16 applications before receiving a positive response.

All of this makes it hard to believe the government’s claim that racism is now peripheral.

It is also wrong to use the fall in official unemployment figures to claim that the recession is over. There are still 2.46 million out of work and this is likely to rise.

The number of people working part-time jumped by nearly 100,000 in the three months to November, while the number of full-time jobs fell by 113,000 over the same period.

The number of workers who say they have been forced to take a part-time position after failing to find anything full-time was close to 1.3 million, a rise of almost 40 per cent on the same period last year.

Some 46 percent of young women with no qualifications are unemployed.

Some employers have sacked fewer staff because they (and some union leaders) have convinced workers to take pay cuts or work shorter hours.

‘You live in fear all the time’ – Wil Vincent, 21, Birmingham

‘Being unemployed was really bad.

My landlord was only interested in getting the rent, so when I lost my job I found myself on the street.

When I found somewhere to live and was trying to find work, I had to spend my time trying to keep the job centre people happy.

But they kept telling me, “You need to look harder,” even when there was no work available.

I have GCSEs and A-Levels, but even with qualifications nothing was available.

I was looking for full-time work, but the job centre would say, “This is only 12 hours a week, but you should still do it.”

A lot of the jobs on offer are temporary. So it might be 30 hours one week, then nothing for another four weeks.

I was living like that for a year. I didn’t know if I’d have 20 quid the next week – enough money to feed myself and put electricity on the meter.

You live in fear all the time. Will the bank charge you extra for going too far overdrawn?

You’re just stressing out all the time and you can’t stop thinking about it.

I have a British name and passport, so you can’t tell on an application that I’m not white.

Often I’d turn up for a job interview and see them stepping back.

Then it always seemed to be me who didn’t get my calls returned and didn’t get the job.’

‘I won’t accept that black youth are unemployable’- Sean Orefuwa, 26, south London

‘Unemployment is higher for young black men because we are not treated equally.

I refuse to accept that nearly 50 percent of black youth are unemployable, that they are all useless or bums.

I’ve got a degree and I’m finding it really hard to get work.

It’s hard coming out of university into this economic climate. I’ve had to move back in with my parents.

I’ve tried everything from manual labour, unskilled work, call centres and supermarkets – but I still haven’t got anything.

And most people don’t even bother to let you know you didn’t get the job.

I think there is a social stigma, particularly about young black men. The way we are portrayed in the media and society means that you don’t hear the positive stories – you always hear the bad stuff.

When you are judged before you step into the interview room then it’s going to be an uphill struggle.

I think it is easier for society to blame black youth for problems rather than challenge stereotypes and look at the real problems.

We need to be more aware of why we have the problems we do – and of how to challenge them.’

‘They won’t employ you because of skin colour’- Johnny Moaonzele, 22, east London

‘I came to Britain from Congo as a young child. Then I was kicked out of school. They thought I was mental, but I just wasn’t coping.

School was one of the worst experiences of my life. When I first came here people used to abuse me because they knew I couldn’t speak English well.

I didn’t have the words so I could only defend myself by fighting.

There was no support in the school for me – only when I got kicked out did I get help.

Some schools in Hackney put all the naughty kids together in a special class and brand them as bad.

That’s why lots of them quit school – they get into gangs, end up in jail or dead.

Most of the time in schools they don’t care about us, or our talent. It’s all about targets. They invent activities for us – it’s not about teaching but keeping you busy.

I got involved in a gang.

I decided to change my life. I went to university and did a degree in graphic design

But I can’t get a job, nothing is coming through.

Racism is all around us, especially among powerful people.

It’s really hard. People ask, why don’t you just come with us and sell drugs on the street? I’m trying to resist that.

I have a good CV, good references.

But they look at you and think, I’m not going to interview you or give you a job because you are black.’

‘It’s hard to be motivated’ – Ged Colgan, 19, Leeds

‘I lost my job in Leeds so I’ve had to move back to Coventry to live with my parents. It’s really frustrating.

It’s hard to be motivated – it’s like there is nothing to get out of bed for.

I’ve been to so many companies handing in my CV, filling in application forms. But there are hardly any jobs and everything that is available is part time.

It’s demoralising. When they take your form you know the minute you leave it will go in the bin.

I applied for a job that had 150 applicants for only two positions. I keep getting told I don’t have enough experience.

I’ve managed to get a few hours a week working in catering. They are hiring people under 18 to pay them less.

They use the threat of losing your job to make you work harder.

I don’t know what I’m going to do – my life is in Leeds but I’m stuck here in Coventry.’

Taken from Socialist Worker

Million workers pay price of City failure

More than a million workers have lost their jobs since the beginning of the recession, forcing many to take a huge pay cut in order to land a new job, economists have revealed.

A report released by the Charted Institute of Personnel Development (CIPD) paints a devastating picture for working people who are continuing to suffer job losses, pay cuts and huge drops in living standards during the recession.

It revealed that 1.3 million people have been made redundant during the “official” recession – double the fall in employment and equivalent to 4.4 per cent of those in work before the downturn.

And two-thirds of those who succeeded in finding new work were forced to take a 28 per cent pay cut.

Between April 2008 and November 2009 there were 6.2 million fresh claims for jobseeker’s allowance – an astonishing 7.5 times higher than the official unemployment claimant count, according to the CIPD.

Communist Party of Britain general secretary Rob Griffiths said the government had “utterly failed to protect workers,” preferring to allow them to be “thrown to the wolves” of unemployment and poverty.

Mr Griffiths insisted that, if the government wanted to successfully ease the pain of the recession for workers, it must “direct the activities of big business and the movement of capital.

“As in every capitalist recession, many viable enterprises have been shut down in order to maximise profitability,” he said.

“Many employers have taken advantage of the recession to intensify or to force fewer workers to work even harder.”

The CIPD study is released on Monday, the day that Chancellor Alistair Darling’s promise of employment, training or work experience for every young person out of work for six months goes live.

In his pre-Budget report, Mr Darling called for a 1 per cent pay cap for the public sector.

But speaking to the Sunday Times, he threatened to bring a swooping axe down on all public-sector workers, promising pay cuts.

Mr Darling tried to justify the decision, quoting figures that private-sector workers had suffered an average 0.1 per cent pay cut across the board.

Responding to the Chancellor, a public-sector union Unison spokeswoman accused him of using the recession to divide working people.

“What is the point in pitting public-sector workers against private-sector workers in a race to the bottom?” she questioned.

“They are using the public sector as a smokescreen when it is big City bankers who have dragged this country into recession.”

The spokeswoman also said that the union expected the government to honour the three-year pay deal in the NHS and called for a strong focus on getting the country out of recession.

“We need to look how we get this country out of recession and that is not by depressing wages and the economy still further.

“When you cut people’s wages you cut their purchasing power – this has a knock-on effect.”

Taken from Morning Star

Unemployment down, Employment down

A complex picture on unemployment was unveiled in the statistics released today for September to November 2009. Total unemployment on the LFS measure dropped slightly by 7,000.

The claimant count of unemployment (those actually claiming Jobseeker’s Allowance) fell by 15,200 – which suggests the increasingly stringent conditionality and compulsion is taking its toll on jobseekers.

However, the number of people in work fell by 14,000 in the quarter (to 28.9 million), so where have all these people gone? If 14,000 fewer people are in work and 7,000 fewer are out of work then that’s 21,000 missing people . . . surely?

The answer lies in the number of people classed as ‘economically inactive’, which includes people who have taken early retirement or have given up looking for work. This increased by 79,000 in the quarter to reach a record high of 8.05 million, 21% of the working age population.

But behind the unemployment figures, another picture is emerging – those on involuntary short-time working (i.e. those who have cut their hours to stay in work). Today’s figures revealed a fall of 113,000 in the number of people in full-time jobs, to 21.21 million, compared with a 99,000 increase in part-time workers to 7.71 million.

Falling employment and increasing short-time working means less disposable income which is bound to filter through into tighter consumer spending. Likewise, average pay increased by 0.7% in the year to November 2009, while inflation hit 2.9% in December – further hitting the value of wages in people’s pockets.

People falling out of claimant eligibility into the grey or black economy also means tax revenues are hit.

The true picture revealed today is not one of an economy that has ‘turned the corner’ or is ‘on the up’, but of an economy that is incredibly fragile.

Taken from Left Economics Advisory Panel

Work For Benefit: The New Helots

Welfare reform legislation is due to be one of this Government’s enduring legacies. From this autumn there will be two benefits: Jobseeker’s Allowance, and Employment and Support Allowance. Already there is pressure on medical assessors to channel those on Incapacity Benefit into the former, where many lone parents and others will also eventually join them. JSA brings a lower income – down to the standard rate of £64.30 a week, in contrast to £89.80, the starting point of incapacity allowance – and, after six months, puts claimants on the Flexible New Deal. This, being tried out in large parts of the country, will eventually replace all existing welfare-to-work schemes. For a year the jobless will be farmed out to private companies, intensively advised and obliged to carry out a minimum of four weeks of “work related activity” (they may be “advised” to do much more).

This sounds relatively benign. It replaces 13 weeks in “work placements” of dubious value or simply stuck in “training centres” (where the only “training” is sitting in front of computers “job searching” for work that does not exist) of the previous New Deal. However, the Government has learned nothing from its experience of farming out the New Deal to private companies, two of which at least have been accused of malpractice. The faith-led YMCA has also run schemes. Most have scraped through their contracts with low employment outcomes and feeble training standards. The approximately 600,000 claimants who have faced sanctions for not complying with every aspect of the schemes shows how they are used to punish people. If participants were in charge of inspections, the companies would fail in an instant – yet the DWP has been told to contract out its new scheme to the same bodies.

The new regime will closely regulate people’s lives. Partners of JSA claimants will also have to seek work actively. Those dependent on drugs and alcohol will undergo compulsory rehabilitation. There is no clear notion of what will happen if they fail, other than they will have no benefits.

Most worryingly, after two years unemployment people will be forced onto the Work for Benefits programme. This will involve full time activity in “training options, short term work trials, a remuneration subsidy for employers to take them, or voluntary work in the local community,” (DWP October 2009). With unemployment set to rise to 3 million by October next year, when this policy is enforced, they will have plenty of compelled “volunteers”.

Some argue that since JSA is supplemented by housing and council tax benefit, it is “fair” to work for this money. However, those further benefits are paid at varying rates, making the overall pay rates different between individuals – and still leaving them well below the minimum wage.

This all raises fundamental issues. First, why should those who through no fault of their own have no job be forced to do what has up to now been the task of those sentenced to do community service by the courts? Indeed, what will happen to community service orders when the long-term unemployed start to undertake similar “sentences”?

Second, this will corrupt the voluntary sector, parts of which are already gearing up for it. The character of the voluntary sector will change. The nature of forced labour is to give power to the employer while discouraging the worker, making them dependent on the goodwill of the employer. The rights of volunteers are not the same as those on paid contracts. Groups and no doubt individuals will profit financially.

Third, it doesn’t take a genius to realise that cash-strapped local government will see this as an opportunity to plug gaps in their services. A tied labourer is cheaper than a paid employee. In areas as disparate as home helps to environmental projects volunteering could become a new national service, replacing those working for real salaries.

Those opposed to welfare reform have to date had little impact on Brown’s take it or leave it decision that this is the direction welfare will go in. The umbrella initiatives organised by the TUC have petered out in well-meaning but ineffective lobbying by a coalition of “antipoverty” NGOs with some union support. There are now signs of a more militant approach emerging from unions of the unemployed and other groups. There are web sites promoting opposition and plans for a decent benefit system that could really cope with people’s needs. As mass unemployment returns pressure for change will increase.

Labour looks set to leave behind a new class of helots – the work-for-the dole underclass. An incoming Conservative Administration will have plenty of conscripts for its plans for workfare. Both ideas were pioneered by the same person – once adviser to Labour and now the Tories, the exceedingly wealthy Lord Freud.

Andrew Coates

Taken from Ipswhich Unemployed Action

Sunderland’s jobless total dips

Sunderland was the only part of the North East to see the number of jobless claims continue to fall last month.

The number of people claiming Jobseeker’s Allowance across the region rose by 1,226, but the claimant count in the Sunderland City Council area was down 62 from 10,305 to 10,243.

City council leader Coun Paul Watson said: “Since May last year, Sunderland has seen a fall in the number of residents who are claiming Jobseeker’s Allowance. This is encouraging news when compared to the national figures and other parts of our region, but I would not want anyone to think that anybody is complacent.

“Sunderland’s economy is now far more robust and resilient, and we have a diversified business base that is better able to withstand shocks.

“The city council and organisations across the city and North East continue to do all they can to help create employment opportunities, and to help people into work.”

The employment picture is not so rosy across the rest of the region.
Hartlepool, Middlesbrough, Redcar and Cleveland and Stockton have seen the biggest increases in claimant numbers over the past year.

Middlesbrough has the country’s fifth highest proportion of working age people claiming Jobseeker’s Allowance, Hartlepool is joint seventh and South Tyneside is eighth.

The most popular occupations sought by jobseekers in the region are sales and retail assistants, goods handling and storage occupations and labourers in process and plant operations.

Taken from Sunderland Echo

Half of young blacks are unemployed

Almost half of all young black people are unemployed, figures have revealed – twice the number of young white jobless.

The Institute for Public Policy Research (IPPR) claimed that employment levels for this group have plunged since the recession began and accused the government of failing in its commitment to tackle disadvantage in society.

The rate of unemployment among young black people aged between 16 and 24 in Britain now stands at 48 per cent – up 13 per cent from the 35 per cent when the recession began to bite in March 2008.

The rate of unemployed young white people aged is a shocking 20 per cent, while the total level of youth unemployment is 943,000 – a 15-year high.

Unions expressed concern at the figures.

Unison general secretary Dave Prentis said: “Being out of work for lengthy periods early in your working life can be hugely damaging.

“Young black people are more likely to suffer poverty and joblessness and they are also twice as likely to suffer bullying, job insecurity and stress when they do find work.

“Billions have been spent on bailing out the bankers, but getting people back to work should be a priority.”

Social policy think tank Race on the Agenda (ROTA) called for urgent action.

Chief executive Dr Theo Gavriel said: “The data only confirms ROTA’s research on unemployment and the inequality faced by Britain’s black and minority ethnic groups.

“Once again the recession hit minority groups the hardest.

“ROTA is calling for statutory, private and voluntary sector service providers to take proactive steps in bridging the unemployment gap now”

The IPPR analysis cut through claims that the worst of the recession was over.

Half a million more people are now out of work then a year ago, it said, with a total unemployment rate of 7.8 per cent.

The figures also signal that thousands of people have been driven in to casual, short-term and part-time jobs as 113,000 fewer workers were in full-time employment.

Taken from Morning Star

Surprise fall in UK unemployment amid surge in part-time jobs

I do think some of these figures are slightly misleading, as a lot of the rise is due to the retail sector taking on a lot of seasonal employees and also the jobless rate rose again in the north-east, to 9.8%.

A rapid growth in part-time jobs may prevent the jobless total rising above the 3 million mark after unemployment unexpectedly fell for the first time in 18 months in November.

The Office for National Statistics said the broadest measure of unemployment fell by 7,000 to 2.458 million, the first quarterly decline since May 2008, leaving the jobless rate at 7.8%. The narrower measure of people claiming unemployment benefits dropped by more than expected in December, falling by 15,200 to 1.61 million, the biggest drop since early 2007.

But the fall masked an increase in the number of people in the labour force who are neither working nor looking for work, with the inactivity total rising above 8 million for the first time since records began in 1971. The rise was largely driven by an increase of 81,000 in the number of students not looking for work.

Full-time employment fell by 113,000 to 21.2 million, while part-time employment did not rise fast enough to compensate, increasing by 99,000 to 7.7 million. As has been the pattern for months, the figures are being driven by women finding part-time jobs while men, predominantly, are losing full-time ones.

There was better news for the under-24s, who saw a fall in joblessness of 16,000 to 927,000, but that still left a fifth of young people out of work.

Other figures showed the number of people out of work for more than a year jumped 29,000 on the quarter to 631,000, the highest level since late 1997, as companies continue to shed jobs in the teeth of the UK’s worst recession since 1921. Today the power company E.ON announced the closure of a call centre in Essex with the loss of 600 jobs, while last week Bosch said it was closing its car parts factory near Cardiff, losing 900 workers.

Unemployment continues to hit regions of Britain differently. The jobless rate rose again in the north-east, to 9.8%, closely followed by the West Midlands on 9.6%. By contrast, the east and south-east had the lowest rates of any region, at 6.3% and 6.2% respectively.

The ONS also reported that wage growth slowed to the lowest on record at just 1.1% year-on-year, excluding volatile bonus payments in the three months to November. For November alone, private sector pay showed no growth at all from a year earlier.

Colin Ellis, economist at Daiwa Capital Markets, was concerned that wage growth had slackened and that it could affect consumer spending this year. “The rise in unemployment during this recession has undoubtedly been smaller than expected, which should support consumer spending. But the flipside of a smaller-than-expected adjustment in labour market quantities has been greater adjustment in terms of prices, with earnings growth weakening markedly.”

John Wright, chairman of the Federation of Small Businesses, warned that many of the jobs created in the run-up to Christmas might not last long. “Many small firms, especially in the retail sector, will have taken on seasonal staff to help them through the busy Christmas period. However, small businesses need help to make these seasonal jobs into permanent jobs and the government must lend a helping hand if small firms are to really tackle the challenge of rising unemployment,” Wright said.

Separately, minutes of the latest meeting of the Bank of England’s monetary policy committee showed all nine members voted in January to keep interest rates at a record low of 0.5% and to maintain its £200bn quantitative easing scheme.

The MPC said signals were mixed but the economy appeared to be growing again, albeit weakly. It said large policy stimuli and a weaker sterling exchange rate were still the main supports for growth but noted powerful headwinds remained, as Bank governor Mervyn King had said in a speech on Tuesday.

Taken from guardian.co.uk