Saturday, 17 September 2011

Unemployment and Osborne: the crisis deepens


On 14 September the horror of this government’s austerity policies was brought into sharper relief with the publication of unemployment statistics showing unemployment has breached 2.5 million again.

But that figure hides more worrying underlying trends: in addition to the 2.5 million unemployed are nearly 1.3 million working part-time who want full-time jobs (up 15% in the past year) and over half a million working temporary contracts who want a permanent job. In effect therefore 4.4 million people are looking for work (aside from anyone in work looking to change job). Youth unemployment is the highest on record, while women’s unemployment is at its highest since 1988.

To compound this misery further the number of vacancies sank to just 453,000 – meaning there are about 10 people chasing every job. In the areas of highest unemployment (the north-east and London) that figure is likely to be considerably higher.

Despite Osborne’s rhetoric about the white knight of the private sector coming to the rescue, Tory cuts and austerity are damaging private sector jobs too. On 15 September retail sales data for August showed a further contraction. With unemployment rising, wages falling in real terms and benefits and tax credits being cut, how could the service sector expand?

The unemployment rise was entirely due to the government’s cuts programme as data showed the public sector had shed 110,000 jobs in the last three months alone. Ironically despite rising unemployment, the government is shedding jobcentre staff and even embarking on another round of jobcentre closures – including in Camberwell, south London.

The attack on welfare is not just on the staff who administer it though, but on people trying to claim and maintain a claim for jobseeker’s allowance (JSA). On 15 September, the National Audit Office showed that the take-up rate for JSA is just 53% - meaning there are over a million people entitled who are not claiming. Many will be too proud or ashamed to claim, given the stigma successive governments have heaped on welfare, or they might have been pushed out of the system by the increased conditionality applied.

Osborne and the Tory-led government are in turmoil. Increasing unemployment means rising welfare bills and falling tax revenues, exacerbating the deficit crisis they pledge to be resolving. Their solution will be to cut more, and the downward spiral will accelerate – sucking in thousands of wasted lives as collateral damage in Osborne’s failing economic experiment.

A version of this article will appear in the October issue of Labour Briefing

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