As Andrew Lilico in the DT says, "Our economy has been a jobs machine, so it's hard to see what Rishi was trying to fix" ...
https://www.telegraph.co.uk/politics/2020/07/09/economy-has-jobs-machine-hard-see-rishi-trying-fix/
It’s tough to see what the government thinks is the problem it is trying to solve. Usually governments announce job creation or job subsidy measures when economies are struggling to create new jobs and unemployment is either rising or stubbornly high and refusing to fall. The idea is that such spare resources not being taken up in new jobs indicates some form of market or regulatory failure, so rather than leaving market forces to determine the optimal level of unemployment, the government steps in to get unemployment down and avoid lives being blighted by enforced idleness.
But how is any of that relevant to the UK? The UK economy has been a veritable jobs machine over the past 25 years. Even at the peak of the Great Recession of 2008/09, with GDP down by its worst drop since the 1920s, UK unemployment never got much above 8 per cent. Despite tepid growth over the following decade, unemployment fell and fell. Remember those three million jobs that were supposed to be dependent on EU membership? Recall how unemployment spiked up after the EU referendum vote and subsequent confirmation we’re leaving? No, me neither. By early 2020, unemployment was at its lowest level for over 40 years at under 4 per cent.
But it's actually worse than that.
Covid has a silver lining in that we have discovered huge savings in the way we operate our businesses and personal lives. I, for example, can't believe I haven't filled up the tank on my car since March 13th and the needle is still only just below three quarters! My personal bank account looks in extraordinary good health after not having lunch from expensive London food stalls and plush corporate canteens, instead a quick trip down to the fridge suffices at a fraction of the cost. The business I'm currently contracting for is never going to have huge smoke and mirrors HQ buildings on the Slough Trading again now they know we can all work at home. A small hot desk and occasional meeting room location with a permanent cleaner is all that's need by way of collective property.
Unemployment is the signal of the reallocation of resources required to meet the new found productivity and efficiency of better working practices and personal behaviours. The market will clear the reallocation of resources if left to function unmolested. Hospitality folks can go work in care homes desperately in need of staff. Ex-car workers can start converting the smoke and mirrors office buildings on the Slough Trading Estate into flats. Rail workers and London Underground train drivers can go to their true station in life and start flipping burgers in MacDonald's and sweep the streets.
The last thing in the world you should do when a slap round the face like Covid opens your eyes to new and better alignments of capital, labour and assets is preserve the old order in aspic by subsidising those old fake jobs and industries. Rather, hold back the cash for unemployment benefit and to help people transition.
The mimicry of the mistakes made between 1945-75 that culminated in Blighty going bust and having to be bailed out by the IMF is more precise than even I predicted.
The only hope is: please - pretty please with a great big cherry on top - please let the mimicry follow through to the great revolution of 1979 ...
SoD
Unemployment is probably low because we employ so many people in the public sector. If we binned all the jobs that aren't worth doing, I'm betting unemployment would be a great deal higher
Posted by: Bucko | Thursday, 09 July 2020 at 14:02
The pay wall problem, but are employment numbers broken out by sector and also, are gains/losses in government employment given as well?
Posted by: Whitewall | Thursday, 09 July 2020 at 15:14
Bull's eye Bucko!
The productivity gap between Blighty and the US, Germany and France was 30%, 20%, 10% if I remember rightly?
Imagine being 10% less productive than France, ffs!
Blighty's black hole of productivity and fake jobs is in the public sector and the large private monopoly and cartel corporations.
The NHS, for example: 1.3/1.5m staff (depending on who you refer to), the fifth largest employer in the world. Only the People's Republic of China's Army, the US DoD, Walmart, and MacDonald's have more employees. And yet they build four new hospitals but don't have enough doctors and nurses to put in them! A productivity epic fail hiding in plain view!
Let's say we lifted our game to France's level of productivity - not exactly an ask - that'd be 10% of the workforce unemployed. The workforce being 30m would yield 3m unemployed before the Covid fallout even kicks in. If Covid puts another 3m on top of that you're in melt-down territory. At 6m unemployed Mrs T II is really going to have her work cut out - 2x the mess the original Iron Lady had to clear up!
The reason so many jobs are vacant - as per Andrew Lilico's observations - is precisely because of the anti-market obstructions already in place even before Rishi Sunak's "push water uphill" feat: people shackled to old fake jobs and prevented from going to the market for reallocation to the vacancies for real jobs - so the real jobs stay vacant.
It's truly so broken.
SoD
Posted by: loz | Thursday, 09 July 2020 at 16:11
And yet they build four new hospitals but don't have enough doctors and nurses to put in them!
Ah, the old empty hospital trick
https://www.youtube.com/watch?v=Eyf97LAjjcY
Posted by: AussieD | Friday, 10 July 2020 at 03:31
Brill, good spot OzD!
SoD
Posted by: Loz | Friday, 10 July 2020 at 07:13