Err, yes, there’s an answer to this Nick

The worst recession since the 1930s ought to have produced mass unemployment. Yet the numbers in work have risen.

After years of stagnation under the inept management of George Osborne, the British economy is growing, which sounds good news until you learn that living standards are still falling and therefore the boom can’t last.

Straight from Karl Marx too. Once that reserve army of the unemployed is exhausted then wages will rise as the capitalists compete between themselves for access to the profits that can be made by employing labour.

It’s one of the reasons why we like markets, see?

For of course, if we had a monopsony, a single employer, then that competition wouldn’t occur and wages wouldn’t rise.

7 comments on “Err, yes, there’s an answer to this Nick

  1. In theory yes. In practice, once the reserve army of unemployed is exhausted, we’ll add another country to the EU (perhaps Turkey), then import millions more cheap workers. That’s been the pattern for the last decade.

  2. “The worst recession since the 1930s ought to have produced mass unemployment.”
    I wonder what “ought” is doing in that sentence. Some covert wishful thinking?
    “Yet the numbers in work have risen.”
    Yes, so inequality did not rise in the recession as much as it “ought” to have done.
    “living standards are still falling and therefore the boom can’t last.”
    Non sequitur.

  3. Also somewhat odd for an Observer commenter to describe an economic policy that promotes higher employment/lower wages over one of higher unemployment/higher wages for those with a job as “inept”.

    Would Nick Cohen really like to see 8% unemployment but bankers getting 2007 style bonuses (which would boost the national average wage up considerably).

  4. Cohen’s a clown, but the stupidity in the comments is something else. What went ye out into the wilderness to see, I suppose.

  5. Cohen appears to be a imbecile but pressing on…

    I paraphrase but it seems that “there’s no point, I might as well give up” is a justification. Defeatism – it’s a disability now.

    Treating these people for depression would seem to be one possible way forward.

  6. The starting premise is all wrong; this wasn’t the worst recession since the 1930s, it was a short sharp inventory shock following a collapse in the availability of working capital following the Lehman collapse. Subsequent policies, some necessary some not, have produced a deleveraging of corporate and household balance sheets that has had multiple impacts depending on country. Large household debt on floating rates, eg UK have benefited from much lower mortgage ‘tax’ as short rates down – just had a reboot of that. This offset lower wages in terms of liquidity for spending. Not so in France, Germany and Italy as little floating rate debt, no real benefit while there rigid labour markets prevent market clearing for job creation. The biggest threat to living standards is the parasitic tax take including the green rent seekers allowance.

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